1. India is being brought under a wider non-proliferation net, with the US draft tying it to compliance with the entire set of NSG rules. Apart from being allowed to retain some nuclear facilities in the military realm, India will be treated, for all intents and purposes, as a non-nuclear weapons state by the NSG and thus subject to the non-proliferation conditionalities applicable to such states. India, in other words, is to be drafted into the NPT as a de facto party.
Except for exempting India from one key NSG provision, the draft permits exports to "safeguarded" Indian facilities "provided the transfer satisfies all other provisions" of Part 1 & 2 of the NSG Guidelines -- that is, all the rules pertinent to non-nuclear-weapons state.
The exemption relates to the "full-scope" (comprehensive) safeguards rule listed in paragraphs 4(a), 4(b), 4(c) of Part 1 and 4(b) of Part 2 of the NSG Guidelines, which have been published by the International Atomic Energy Agency as document INFCIRC/254. India had to be exempted from the application of safeguards on each and every nuclear facility, given the fact that it has some nuclear military facilities.
2. India is acquiescing to its unilateral test moratorium being turned into a multilateral legality. The draft US proposal, in Section 2, first lists India's commitments, including to "continuing its unilateral moratorium to nuclear tests". Then, in Section 3, it recommends permitting exports to India for peaceful purposes for use in safeguarded civilian nuclear facilities, "provided that the transfer satisfies all other provisions" of Part 1 & 2 of the NSG Guidelines.
Bearing in mind that the NSG Guidelines relate to transfers to non-nuclear weapons states, India will have to live up to all the stipulated non-proliferation commitments and abjure activities proscribed for non-nuclear-weapons states. What was a unilateral test moratorium is to become, in effect, a requirement for civil nuclear cooperation with other states. The implication of treating India as a non-nuclear-weapons state and of implicitly "multilateralizing" its voluntary test moratorium is that India will face a fuel supply cut-off if it ever dared to test, leaving its imported power reactors high and dry.
This has to be seen against the backdrop of the Hyde Act and the so-called 123 Agreement. The 123 Agreement incorporates an implicit test ban by: (i) granting the US the right to seek the return of supplied items and materials on account of a US-determined Indian non-compliance with non-proliferation conditions; and (ii) arming the US with an open-ended right to suspend supplies forthwith simply by issuing a one-year termination notice on any ground, however extraneous.
The Hyde Act's Section 106 explicitly bans Indian testing forever. That section is the mother of all prohibitions.
In effect, India is being dragged through the backdoor into the Comprehensive Test Ban Treaty.
3. Instead of the "full" civil nuclear cooperation that the original July 18, 2005, deal promised, India access to civil enrichment and reprocessing technologies will be restricted through the proposed NSG waiver. The US draft to the NSG, in Section 3b, states that transfers may take place to safeguarded facilities in India, "provided that the transfer satisfies all other provisions of Part 2". But Part 2 of the NSG Guidelines incorporates a presumption of denial of reprocessing and enrichment equipment and technology even under safeguards.
The presumption of denial in Part 2 of the Guidelines is contained in the following words in its Section 4: A supplier-state "should exercise prudence in order to carry out the basic principle and should take relevant factors into account, including � Whether the equipment, materials, software, or related technology to be transferred is to be used in research on or development, design, manufacture, construction, operation, or maintenance of any reprocessing or enrichment facility".
That India will face a continued embargo on importing equipment and components related to reprocessing and enrichment, even when such activities are under IAEA inspections and for peaceful purposes, has been underscored both by the 123 Agreement and the Hyde Act.
Not only does the Hyde Act debar transfer to India of any "sensitive" civil nuclear equipment or technology, but also its Section 105(a)(5) directs Washington to "work with members of the NSG, individually and collectively, to further restrict the transfers" of reprocessing, enrichment and heavy-water technologies to India. And to underscore the primacy of the Hyde Act, the 123 Agreement's Article 5(2) states, "Transfers of dual-use items that could be used in enrichment, reprocessing or heavy water production facilities will be subject to the Parties' respective applicable laws, regulations and license policies."
Contrast such restriction with what the prime minister had pledged in Parliament on August 17, 2006 -- that India will only settle for the "removal of restrictions on all aspects of cooperation and technology transfers pertaining to civil nuclear energy, ranging from nuclear fuel, nuclear reactors, to reprocessing spent fuel".
4. The various good-faith declarations made by India in the July 18, 2005, joint statement with the US are all being turned into binding, enforceable commitments multilaterally through the NSG, after having been incorporated into the Hyde Act. In other words, the NSG is being asked to allow exports to "safeguarded" Indian facilities as long as India continues to fully meet the non-proliferation and safeguards commitments it voluntarily made on July 18, 2005. Those commitments have been listed in Section 2 of the US draft.
Furthermore, by additionally linking transfers to India to compliance with Part 1 and Part 2 of the NSG Guidelines, the US draft enlarges the non-proliferation net. For example, paragraph 4(e) of Part 2 of the NSG Guidelines demands that a supplier-state first consider, before making any transfer, "Whether governmental actions, statements, and policies of the recipient state are supportive of nuclear non-proliferation and whether the recipient state is in compliance with its international obligations in the field of non-proliferation".
5. The good-faith commitments being multilateralized include the following: India adhere to the NSG rules unilaterally, although the NSG will not admit India as a member. The implication for India of entering into cooperation on the basis of unilateral adherence to the NSG guidelines is that this cartel could change its guidelines in the future to impose new conditions on India -- and India would have no recourse to being at the receiving end, after having invested billions of dollars in imported reactors.
The Hyde Act actually holds out the threat of termination of cooperation if NSG amends its rules by saying, "No item subject to the transfer guidelines of the NSG may be transferred to India if such transfer would be inconsistent with the guidelines in effect on the date of the transfer".
The US draft to the NSG merely suggests consultations with India on future amendments to the NSG guidelines, but gives India no say in the final decisions. As stated in Section 4 of the draft proposal, the NSG will "solicit such comments" from a non-member like India on proposed new amendments as to "facilitate their implementation by India". The objective of soliciting "comments" would be to ensure India's acceptance and compliance with a future amendment.