U.S., India reach agreement on nuclear fuel reprocessing

By Rama Lakshmi and Steven Mufson
Washington Post Staff Writers
Tuesday, March 30, 2010

NEW DELHI -- India and the United States announced Monday the successful conclusion of negotiations granting rights to India to reprocess spent nuclear fuel, a new step toward opening nuclear commerce between the two countries, potentially worth billions of dollars.

The accord is part of the historic civilian nuclear-energy agreement that ended more than three decades of nuclear isolation for India by facilitating its access to nuclear fuel and technology, even though it has not signed the Non-Proliferation Treaty. The agreement, negotiated for more than nine months, lays out conditions to safeguard against the diversion of American nuclear fuel into India's weapons program, but critics warned that the accord would create new dangers of spreading nuclear materials.

The U.S. State Department and India's Department of Atomic Energy released a short statement announcing the deal. Timothy J. Roemer, U.S. ambassador to India, said it was "part of the great, win-win narrative of the U.S.-India global partnership."

Last year's agreement raised hopes of new business deals for U.S. companies, but so far those have not been fulfilled. Although the nuclear deal was signed in 2008, and two sites have been identified by India for U.S. reactors, no American company has signed contracts. India has yet to pass a controversial nuclear-liability law and give a letter of assurance on nonproliferation, a licensing requirement that governs all commercial nuclear exports. Meanwhile, India has signed deals with state-owned French and Russian nuclear companies.

Monday's announcement comes just two weeks before the Obama administration is scheduled to host an international summit on nuclear security.

Sources in the Indian and American nuclear power industries said India has secured significant concessions in the reprocessing accord. The sources spoke on the condition of anonymity because the details have not been made public.

One element is that the reprocessing will not be monitored by the United States directly, but by the watchdog International Atomic Energy Agency (IAEA) in Vienna, according to a source in the U.S. nuclear industry. "Indians did not want direct American oversight with an American flag on them. It is a symbolic, sovereignty issue for Indians," said the source, who is familiar with the negotiations.

The United States follows this model only with Europe and Japan. "India is now in a special circle. This is a big deal," said Ted Jones, director of policy advocacy at the U.S.-India Business Council.

Another thorny issue that slowed negotiations was that India insisted on having more than one reprocessing plant, saying it was risky to transport fuel from one place to another through densely populated regions. American negotiators initially resisted, but the Indian argument prevailed, said an official in India's state-run nuclear power company.

Many nonproliferation advocates have expressed concern about how India would handle the plutonium that would be extracted from imported spent fuel, which can be used to make nuclear bombs.

"At a time when nuclear terrorism and proliferation concerns are only increasing, the United States should be doing everything it can to stop existing reprocessing, not facilitate more," said Edwin Lyman, an expert on nuclear proliferation at the Union of Concerned Scientists.

He said it remains unclear what would be done with the plutonium produced by an Indian reprocessing plant. Although India has a breeder reactor capable of using plutonium as fuel, India has refused to put that reactor under the supervision of the IAEA. India has pledged not to use the plutonium for its weapons program, although it diverted civilian nuclear fuel to build its first nuclear weapons three decades ago.

The pact will go into effect unless Congress passes a resolution of disapproval. "We've debated and voted on this twice," said Rep. Gary L. Ackerman (D-N.Y.), chairman of the House Foreign Affairs subcommittee on the Middle East and South Asia. He said Congress would not do so again. But, he added, he was disappointed that India has not adopted measures to limit U.S. nuclear companies' liability. "We were hoping the Indians would be doing a lot better on that score," he said.

Staff writer Steven Mufson in Washington contributed to this report.

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