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                                                        S. Hrg. 110-710
 
         AGREEMENT FOR PEACEFUL NUCLEAR COOPERATION WITH INDIA

=======================================================================



                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION



                               __________

                           SEPTEMBER 18, 2008

                               __________



       Printed for the use of the Committee on Foreign Relations


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                COMMITTEE ON FOREIGN RELATIONS          

           JOSEPH R. BIDEN, Jr., Delaware, Chairman          
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts         CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin       NORM COLEMAN, Minnesota
BARBARA BOXER, California            BOB CORKER, Tennessee
BILL NELSON, Florida                 GEORGE V. VOINOVICH, Ohio
BARACK OBAMA, Illinois               LISA MURKOWSKI, Alaska
ROBERT MENENDEZ, New Jersey          JIM DeMINT, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, Jr., Pennsylvania   DAVID VITTER, Louisiana
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
              Antony J. Blinken, Staff Director          
       Kenneth A. Myers, Jr., Republican Staff Director          

                               (ii)                              




                            C O N T E N T S

                              ----------                              
                                                                   Page

Burns, Hon. William J., Under Secretary for Political Affairs, 
  Department of State, Washington, DC............................     9

      Prepared statement.........................................    12


Dodd, Hon. Christopher J., U.S. Senator From Connecticut.........     1


Lugar, Hon. Richard G., U.S. Senator From Indiana................     6


Rood, Hon. John G., Acting Under Secretary for Arms Control and 
  International Security; Accompanied by Richard J.K. Stratford, 
  Director, Office of Nuclear Energy, Safety, and Security 
  Affairs, Bureau of International Security and Nonproliferation, 
  Department of State, Washington, DC............................    16

      Prepared statement.........................................    18


              Additional Material Submitted for the Record

Prepared Statement of Hon. George V. Voinovich, U.S. Senator From 
  Ohio...........................................................    48


Responses of Under Secretary William Burns and Acting Under 
  Secretary John Rood to Questions Submitted for the Record by 
  Senator John Kerry.............................................    49


Responses of Under Secretary William Burns and Acting Under 
  Secretary John Rood to Questions Submitted for the Record by 
  Senator Robert P. Casey, Jr....................................    52


Material Submitted for the Record by Senator Barbara Boxer.......    55

                                 (iii)




         AGREEMENT FOR PEACEFUL NUCLEAR COOPERATION WITH INDIA

                              ----------                              


                      THURSDAY, SEPTEMBER 18, 2008

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:35 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Christopher 
J. Dodd presiding.
    Present: Senators Dodd, Kerry, Feingold, Boxer, Webb, 
Lugar, Hagel, Corker, and Barrasso.

        OPENING STATEMENT OF HON. CHRISTOPHER J. DODD, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Dodd. The Committee will come to order.
    And let me welcome Ambassador Burns once again. We could 
have just recessed the hearing yesterday instead of adjourning 
it. For those of you who were not in the room, Ambassador Burns 
was the witness before the committee dealing with the events in 
Georgia over the last month and a half and did an excellent 
job.
    I think I speak for all of us here in the committee in 
appreciating very much your testimony and response to questions 
regarding that situation. And you are welcome back here again 
today to talk about an agreement for the peaceful nuclear 
cooperation with India.
    And again, let me apologize to my dear friend and colleague 
from Delaware, Senator Biden, the chairman of this committee, 
who is, as we all know, otherwise occupied in other places 
around the country, but has been deeply involved in this issue 
and extremely knowledgeable about it and would very much have 
liked to have been here to be a part of this debate and 
discussion.
    And so, it is a poor substitute that I am chairing the 
committee on his behalf. Having spent a good part of the last 
week dealing with financial services, an easy jump is to go 
from that to a United States-India nuclear accord. I am being 
facetious, obviously, in terms of the intricacies of all of 
this.
    But I am very grateful to Ed Levine and Anthony Weir of 
Senator Biden's staff and the committee staff, not to mention 
Fulton Armstrong of my office and others. And Senator Lugar, of 
course, has been deeply involved in these issues. So we will 
proceed.
    I have an opening statement and comment I want to make. 
Senator Biden has one as well. But I will ask consent to 
include them in the record for purposes, and then other members 
may have some comments.
    My good friend Chuck Hagel is here. He may have some 
thoughts on the subject matter, and others who show up may as 
well. Then we will get to you very quickly, Mr. Ambassador and 
Mr. Secretary, for your thoughts on this matter, and then some 
questions.
    And I would tell you in advance, having gone over this last 
evening and today, some of the questions I may very well submit 
in writing. Some of them are very technical in nature and will 
require a written response, I think, probably rather than just 
having some sort of spontaneous response. But timeliness is 
important here, obviously, given the constraints we are under 
and the question of whether or not we are going to deal with 
this issue in a very truncated period of time that remains 
before this session of Congress adjourns.
    So with that, let me begin, if I can.
    Today, the Committee on Foreign Relations holds a very 
important and, I might add, historic hearing. It is important 
because the Congress of the United States, the Senate, is being 
asked to approve an agreement that may have major consequences 
for U.S. foreign policy in Asia and for nuclear 
nonproliferation worldwide. It is historic because approval of 
this agreement should enable the United States and India to get 
around the biggest obstacle to charting a new course in 
relations between our two great democracies.
    I want to underscore the geopolitical significance of this 
agreement, if I may. For nearly two generations now, India cast 
itself as a nation proudly unaligned with the superpowers--not 
just on arms control and proliferation issues, but really in 
its whole political orientation.
    Today, however, India has become a major actor in the 
world, and it increasingly sees itself in concert with other 
global powers, rather than in opposition to them. This is true 
on counterterrorism, on the need for stability in South Asia, 
on the fight against infectious diseases, and even on 
nonproliferation. Its relationship with the United States, 
quite candidly, has never been closer.
    That is why Indian Prime Minister Singh has devoted such 
energy and courage, I might add, to bring his Parliament along 
and to press for this agreement to come into force. He has put 
himself and his party on the line for this. In fact, just that 
debate and discussion could be a lengthy one in terms of what 
has gone on politically in India in terms of bringing us to 
this point.
    This is not about improving India's nuclear weapons or even 
about solving India's energy crisis. At heart, what we are 
talking about is turning a page in India's relationships with 
the world, putting its sense of nuclear grievance behind it so 
that India can work with other great countries from a position 
of reasonable equality.
    The nuclear cooperation agreement that is before this 
committee is not perfect. As today's hearing proceeds, some of 
those imperfections will be noted and discussed by a number of 
our colleagues. But approval of this agreement will still be a 
milestone in United States-Indian relations. And approve it, in 
my view, we must. We would be well advised to approve it this 
month, moreover, rather than waiting until next year.
    Allow me to explain briefly why acting now is important. If 
we want to adjust U.S. law or policy to implement this 
agreement in the best manner, we have an opportunity to make 
those adjustments in the bill that will waive the Atomic Energy 
Act timelines for considering this agreement.
    I hope that opponents of the agreement will let us do that 
and approve the agreement this month, rather than forcing a 
delay that will only breed nervousness while we wait to finish 
the job next year, when we will not need to waive any timelines 
and will not, I might add, even more importantly, have an 
opportunity to adjust U.S. policy.
    This agreement is not a partisan issue. It had strong 
support on both sides of the aisle in 2006, and it has support 
today. And it is important to approve the agreement while we 
have a responsive partner in India to begin implementing it.
    The first step in reaching out to India was taken by 
President Bill Clinton in the year 2000. India and the United 
States pledged to continue their nuclear test moratorium, to 
avoid arms races, to work for a Fissile Material Cut-Off 
Treaty, and to guard against the proliferation of weapons of 
mass destruction.
    President Bush continued that work that President Clinton 
had begun. In July 2005, President Bush and Indian Prime 
Minister Singh agreed that our two nations would negotiate a 
peaceful nuclear cooperation agreement, and the United States 
committed to work to get the Nuclear Suppliers Group to permit 
nuclear commerce with India. India, in turn, would improve its 
export controls and regulations, separate its civilian nuclear 
program from its military one, and signed a safeguards 
agreement and an additional protocol to that agreement with the 
International Atomic Energy Agency.
    In 2006, India published its plan for separating its 
civilian nuclear program from its military one. That plan calls 
for accepting safeguards in a phased manner through 2014, over 
14 existing or planned nuclear reactors and 6 uranium fuel 
production facilities. India added that all future civilian 
nuclear facilities would come under safeguards, but it reserved 
the right to decide which facilities would be civilian.
    At the end of 2006, the United States Congress enacted 
legislation to allow the President to negotiate and submit to 
Congress a peaceful nuclear cooperation agreement with India. 
Legislation was needed because India, although a non-nuclear 
weapon state under the Nuclear Non-Proliferation Treaty and 
under U.S. law, actually has a nuclear weapons program and will 
not accept safeguards over all its nuclear facilities, as 
called for in the Atomic Energy Act.
    I, along with many others, supported the Hyde Act, which 
gave the go-ahead for the agreement that is before us today. 
Indeed, 85 members of the United States Senate supported it as 
well. But that strong vote of approval came about only after 
this committee addressed the nonproliferation concerns that 
nuclear trade with India raises.
    One of these concerns was nuclear testing. India pledged to 
maintain its test moratorium, but it has not signed the 
Comprehensive Test Ban Treaty. Congress made clear in the Hyde 
Act that any Indian nuclear test would end the waivers 
authorized by the act. It also called for an end to nuclear 
commerce with India in the unlikely event that India were to 
engage in nuclear or ballistic missile proliferation.
    Another concern that was raised was whether to engage in 
nuclear trade relating to such sensitive activities as uranium 
enrichment, spent fuel reprocessing, and heavy water 
production. Congress agreed to limit such commerce with India 
and made it U.S. policy to seek agreement in the Nuclear 
Suppliers Group to further restrict transfers of sensitive 
equipment and technology, including to India.
    In order to get India to separate its civilian nuclear 
program from its military one, President Bush promised to help 
ensure an uninterrupted supply of nuclear fuel for India's 
civilian reactors. Few in Congress liked that promise, which 
suggested that the United States might help India to avoid any 
pain if sanctions were imposed on it. So the Hyde Act made it 
U.S. policy that any Indian fuel reserve should be commensurate 
with reasonable operating requirements of its safeguarded 
civilian reactors.
    Finally, the Hyde Act required the President to make 
several certifications before submitting the nuclear 
cooperation agreement that, again, now is before us. The tests 
that India had to meet included the following:
    Providing the United States and the IAEA a credible 
separation plan for India's nuclear programs and filing a 
declaration with the IAEA regarding its civilian facilities and 
materials.
    Negotiating a safeguards agreement with the IAEA, which had 
to provide for safeguards in perpetuity that are in accord with 
normal IAEA practices.
    Third, making significant progress toward concluding the 
additional protocol to its safeguards agreement, which would 
give the IAEA access to additional Indian facilities that 
involved nuclear activities.
    Fourth, working with the United States to get a Fissile 
Material Cut-Off Treaty adopted.
    Fifth, working with the United States to prevent the spread 
of sensitive nuclear technology.
    And six, improving its export control regime and adhering 
to the export guidelines of the Nuclear Suppliers Group and the 
Missile Technology Control Regime.
    I might add, in addition, the Nuclear Suppliers Group had 
to agree by consensus to a waiver of its guidelines to India.
    A week ago, the President determined that each of those 
standards had been met. He submitted the agreement to the 
United States Congress, along with the Nuclear Proliferation 
Assessment Statement required by the Atomic Energy Act.
    An important question before us, as we review the agreement 
and the President's certifications, is whether they comply with 
the Atomic Energy Act and the Hyde Act. For example, the Hyde 
Act requires that ``India has provided the United States and 
the IAEA with a credible plan to separate civil and military 
nuclear facilities and has filed a declaration regarding its 
civil facilities with the IAEA.''
    That requirement was not forced on the administration. In 
fact, this requirement was proposed by the administration.
    India announced its separation plan in 2006, and it 
provided that plan to the IAEA 2 months ago. It has yet to 
provide a declaration, however, and will not do so until the 
Congress approves the United States-India agreement.
    The administration says that the separation plan contains 
the declaration and that we shouldn't insist upon a separate 
declaration. I think we need to discuss that matter today. Mr. 
Ambassador, we certainly will in the questions before you.
    There are also aspects of the agreement itself that should 
be examined closely. I intend to do my part in the questions. 
Among the issues I will raise are some of the following:
    Whether the agreement satisfies the requirement in the 
Atomic Energy Act, and I quote it again, ``a stipulation that 
the United States shall have the right to require the return of 
any nuclear materials and equipment'' if India detonates a 
nuclear explosive device or terminates or abrogates its 
safeguards agreement.
    Whether the agreement satisfies the requirement for ``a 
guaranty'' that no fissile material that India obtains or 
produces pursuant to this agreement ``will be stored in any 
facility that has not been approved in advance by the United 
States.''
    Whether the President's nuclear fuel assurances to India, 
which are repeated in the agreement and paraphrased in India's 
safeguards agreement, would undermine our ability to respond to 
an Indian nuclear test.
    And whether India's safeguards agreement with the IAEA are 
sufficient protection against possible diversions of nuclear 
technology and non-nuclear material from India's civilian 
nuclear program to its military program.
    We enacted the Hyde Act in December 2006, as many will 
recall. It took another 21 months, I might point out, before 
the agreement was submitted to Congress.
    Given the tight congressional calendar that I mentioned at 
the outset of this hearing, we have our work cut out for us if 
we are to address these questions and enact legislation before 
the Congress in this session adjourns for the year. But we are 
working hard to get that done, and today's hearing is a vital 
part of that effort.
    We are especially fortunate to have Under Secretary Bill 
Burns as our chief witness, and we thank you once again. 
Ambassador Burns is very well known to us and very well 
respected on this issue. He led the U.S. delegation at the most 
recent meeting of the Nuclear Suppliers Group, which agreed to 
allow nuclear commerce with India. Secretary Burns, once again 
we welcome you before the committee.
    I would also note that Acting Under Secretary of State for 
Arms Control and International Security John Rood has joined 
Under Secretary Burns, and I understand that he also has 
prepared a statement that he would make. He, too, has been 
active in the negotiations relating to this agreement. We 
welcome you as well to the committee.
    I would also like to call the committee's attention to a 
statement, as I mentioned earlier, by Senator Biden, who is 
unavoidably not with us, for obvious reasons. And his 
statement, without objection, will be made a part of the 
record.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Hon. Joseph R. Biden, Jr., 
                       U.S. Senator From Delaware

    I am very pleased that the peaceful nuclear cooperation agreement 
between the United States and India has been submitted to Congress for 
its review and approval. We should seize this opportunity to build on 
the foundation laid by President Bill Clinton and cement a new, 
cooperative relationship with India, the world's largest democracy.
    Two years ago, Chairman Lugar and I worked with the administration 
to enact legislation that changed 30 years of U.S. nonproliferation 
policy. We agreed to let the administration negotiate and submit to 
Congress a peaceful nuclear cooperation agreement with India, despite 
the fact that India has a nuclear weapons program. That wasn't easy. It 
took soul-searching and compromise on the part of many Members of the 
Senate regarding the standards for such an agreement and for U.S. 
policy.
    I hope that in a similar fashion, we will be able to approve the 
U.S.-India agreement before the 110th Congress adjourns. I believe we 
should do all we can to make that happen. If that requires passing a 
law or joint resolution that waives the 30-day committee consultation 
period mandated by section 123 of the Atomic Energy Act, I think we 
should do that.
    We should also make sure, however, that the agreement and any 
exports made pursuant to it are consistent with U.S law and with our 
national security interests. As I have stated before, both publicly and 
privately, if we are to preserve the consensus of 2006 in favor of this 
agreement, we must make sure that the concerns addressed in the Hyde 
Act are also addressed in the agreement and in U.S. policy.
    I thank Senator Dodd for his willingness to chair this important 
hearing, and I thank both him and Senator Lugar for the efforts that 
will be required of them if we are to secure approval of the U.S.-India 
agreement. Finally, I am gratified that Under Secretary Burns has 
become such a frequent witness before the committee. His wisdom and 
experience are serving us very well in difficult times.

    Senator Dodd. That was a long opening statement. I 
apologize to my colleagues and others. But this is a very 
important and historic, as I said, a considerably important 
agreement that needs to be addressed. So I tried to outline 
some of the history and where things are at this particular 
point.
    As I mentioned earlier, the former chairman of this 
committee is very knowledgeable on this subject matter, and I 
will now turn to Senator Lugar for any opening comments he may 
have. He has been a major supporter of the safeguards 
activities of the IAEA, which will be needed for any peaceful 
nuclear trade with India.
    And so, we thank him for his work over the years on the 
subject matter, and then I will turn to other colleagues.
    Thank you.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR, 
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you very much, Mr. Chairman.
    I join you welcoming our witnesses. I especially want to 
thank our good friend Under Secretary Bill Burns for coming 
back to the committee after such a short spell away from us.
    In December 2006, Congress overwhelmingly approved 
legislation setting out the criteria under which we would 
consider a so-called ``123 Agreement'' between the United 
States and India. In advance of consideration of that important 
legislation, the Committee on Foreign Relations undertook an 
extensive review of the agreement. We held three public 
hearings with testimony from 17 witnesses, including Secretary 
of State Condoleezza Rice.
    We received a classified briefing from then Under Secretary 
of State Nick Burns and Bob Joseph. Numerous briefings were 
held for staff with experts from the Congressional Research 
Service, the State Department, the intelligence community, and 
the National Security Council. I submitted 174 written 
questions for the record to the Department of State on details 
of the agreement and posted the answers on the committee Web 
site.
    The committee constructed a bill that allowed the United 
States to seize an important strategic opportunity while 
reinforcing United States nonproliferation efforts and 
maintaining our obligations under the NPT. The committee 
approved this legislation with a bipartisan vote of 16-2 on 
June 29, 2006.
    Our efforts and those of the House resulted in final 
passage of the Hyde Act on December 9, 2006, and it was signed 
into law by President Bush on December 18, 2006.
    We expected India to move quickly to negotiate a new 
safeguards agreement with the IAEA and then to seek consensus 
from the Nuclear Suppliers Group, the NSG, in accordance with 
the Hyde Act. Unfortunately, domestic political divisions in 
India led to a delay that lasted nearly 2 years. Final action 
on these tasks was not completed until the last several weeks.
    India engaged and obtained the approval of a new safeguards 
agreement with the IAEA on August 1. NSG consensus was achieved 
on September 6. The administration submitted the agreement to 
Congress on September 11. This leaves Congress with the 
difficult task of approving this agreement in the short time 
before we adjourn.
    Under existing law, the committee would normally be in a 
30-day period of consultation on the proposed agreement, after 
which it would have 60 days to consider a resolution approving 
the agreement. Such a resolution would be privileged and 
unamendable.
    However, if we hope to pass the resolution this year, we 
cannot wait until all 30 days of the consultation period have 
transpired. And given the need to waive most of the 30-day 
consultation period, a simple, privileged resolution is 
unavailable to us. Amendments will be in order, and there is no 
guarantee of a vote on final passage.
    The agreement before us is complex and will require the 
concentrated attention of members. The legislation Congress 
passed in 2006 laid out seven determination requirements that 
the President must make in order to waive provisions of the 
Atomic Energy Act and submit the agreement to Congress. And the 
seven determinations are as follows:
    India has provided the U.S. and the IAEA with a separation 
plan for its civilian and military facilities and filed a 
declaration regarding civilian facilities with the IAEA.
    Second, India has concluded all legal steps prior to 
signature for a safeguards agreement in perpetuity with the 
IAEA.
    India and the IAEA are making substantial progress in 
completing an additional protocol, but it is not completed.
    India is working actively with the United States to 
conclude a Fissile Material Cut-Off Treaty.
    India is working with and supporting the United States to 
prevent the spread of enrichment and reprocessing technology.
    And India is taking the necessary steps to secure nuclear 
materials and technology.
    And the NSG has decided by consensus to permit supply to 
India of nuclear items under an exception to their guidelines.
    Now last week, the President determined that each of these 
requirements has been met. Today's hearing will review these 
determinations in preparation for congressional acceptance. In 
addition, there were four main policy and legal questions that 
must be resolved.
    First, Indian leaders claim that the United States has 
agreed that India can test its nuclear weapons and obtain 
stocks of nuclear fuel to guard against sanctions. They also 
claim that the United States has conferred the legal status of 
a nuclear weapons state under the NPT on India.
    The President's message to the Congress transmitting the 
proposed agreement states that any provisions in the agreement 
are political commitments and not legally binding. Which 
explanation, in your judgment, is factual? And how do these 
conflicting statements affect the operation and implementation 
of the agreement?
    Second, is the agreement fully consistent with United 
States laws that would require termination of the proposed 
agreement and cessation of nuclear exports to India if it 
detonates a nuclear explosive device or proliferates nuclear 
technology?
    Third, are the terms of the proposed agreement regarding 
fuel supply from the United States to India, or supply of fuel 
from third countries to India, or the creation of a strategic 
reserve of such fuel in India, consistent with the intent of 
the Hyde Act? How would the agreement work in cases in which 
the United States decides to terminate fuel supply to India or 
demands the return of nuclear material and equipment to the 
United States in response to an Indian violation of the 123 
Agreement or its new safeguards agreement with the IAEA?
    And fourth, to what extent has the United States created a 
new kind of 123 Agreement and model for international nuclear 
cooperation that may benefit additional countries that have not 
accepted the NPT and that do not have a comprehensive 
safeguards agreement with the IAEA?
    These issues, in my judgment, must be addressed during our 
hearing today. Now we need to establish the definitive U.S. 
interpretation of this agreement. We want to avoid any 
ambiguity about the effect of the agreement on United States 
law and policy.
    Again, I thank Senator Dodd and Chairman Biden for 
scheduling and holding this hearing. I am hopeful that Congress 
will complete our important work on this agreement this year. I 
am confident if we have total cooperation from the 
administration and strong bipartisan teamwork here in Congress, 
we can succeed.
    I thank the Chairman.
    Senator Dodd. Thank you very much, Senator Lugar.
    And let me turn to Senator Hagel, Senator Corker. Any 
comments you want to make at all? Bob, any opening comments?
    Well, again, Mr. Ambassador--you are actually called Mr. 
Ambassador and Mr. Secretary. You have kind of dual hats. Is 
there a preference you like?
    Secretary Burns. Either one is fine.
    Senator Dodd. Either one is fine. Well, Mr. Secretary, 
welcome. And again, any supporting materials and documents that 
you think are worthwhile will be submitted for the record, and 
Mr. Rood as well, the same for you would be the case, and our 
colleagues as well, so we get a full body of evidence here for 
the committee.
    The floor is yours.

    STATEMENT OF HON. WILLIAM J. BURNS, UNDER SECRETARY FOR 
     POLITICAL AFFAIRS, DEPARTMENT OF STATE, WASHINGTON, DC

    Secretary Burns. Thank you very much.
    Mr. Chairman, Senator Lugar, Senator Hagel, Senator Corker, 
thank you for the opportunity to testify today. And let me 
express once again the administration's appreciation to you, to 
the committee, and to the Congress for your willingness to 
consider on such short notice the United States-India Agreement 
for Peaceful Nuclear Cooperation, also known as the 123 
Agreement.
    Mr. Chairman, from the very outset, as you emphasized, this 
initiative has depended upon strong bipartisan support. It is 
anchored by a historic transformation of our relations with 
India that began more than a decade ago, when both countries 
were governed by different political parties.
    The United States-India relationship transcends both party 
and partisanship and so, too, has the United States-India Civil 
Nuclear Cooperation Initiative, as reflected in the large 
bipartisan majorities in both houses which passed the Hyde Act 
in 2006.
    Mr. Chairman, I have submitted a written statement for the 
record, and my colleagues and I look forward to answering your 
questions. What I will try to do now very briefly is to focus 
on three issues. Why is this initiative so important to the 
United States? Why is it so important to move forward with such 
urgency? And what is in the package the President has asked 
Congress to consider?
    Mr. Chairman, there are powerful strategic, environmental, 
nonproliferation, and economic reasons to support this 
initiative. Strategically, it reflects the transformation of 
our relations and a broad recognition of India's emergence on 
the global stage.
    By the year 2025, India will likely rank among the world's 
five largest economies. It is already among our fastest growing 
export markets. It will soon be the world's most populous 
nation.
    We share democratic principles, unity, and diversity, 
traditions of family and community, intertwined economies, and 
a commitment to fighting terrorism. Indeed, Mr. Chairman, 
nearly 3 million Indian Americans have made India's cultures 
and traditions a vital part of the American melting pot.
    We are cooperating with India in many ways--on HIV/AIDS, 
defense and security, trade and investment, and also in 
Afghanistan, where India is today the fifth-largest donor to 
civilian reconstruction efforts. So it is an abiding American 
interest to develop a strong and forward-looking partnership 
with the world's largest democracy.
    This civil nuclear initiative is about advancing that 
common strategic vision. Environmentally, this initiative will 
help India's population of more than a billion to meet their 
rapidly rising energy needs. India is growing at rates of 8 to 
9 percent per year. And to sustain those rates of growth, it 
must expand its supply of energy exponentially.
    Between 1980 and 2001, India's demand increased by a 
staggering 208 percent. By contrast, China, so often described 
as the world's next big energy consumer, saw just 130 percent 
increase, about half of India's, over the same period. India 
will soon outstrip Japan and Europe as an oil importer. It 
seeks to double its capacity to generate electricity in the 
next 7 years and relies primarily on domestically produced 
coal, whose ash content is double that of American coal and 
emits far more nitrogen oxide, an element in smog, and carbon 
monoxide, a poisonous gas.
    This means, Mr. Chairman, that India will be one of the 
world's largest producers of greenhouse gas emissions. So its 
decision to rely in part on clean and efficient nuclear energy 
positively affects our own environmental future, not just 
India's.
    This initiative has important nonproliferation benefits, 
and my colleague John Rood will address these in greater 
detail. I would note, however, India's strong nonproliferation 
record and enhanced nonproliferation commitments under this 
initiative, outlined in the 2005 joint statement and reiterated 
by Foreign Minister Mukherjee in his statement of September 5.
    These include continuation of India's moratorium on nuclear 
testing, separation of its civilian and military nuclear 
facilities and programs, and harmonization and adherence to 
MTCR and NSG guidelines. India has made other nonproliferation 
commitments and taken actions summarized in the President's 
package of determinations under the Hyde Act.
    Finally, Mr. Chairman, this initiative has economic 
benefits that will accrue to both India and the United States. 
The civil nuclear initiative enjoys strong support from U.S. 
industry, and India's ambitious nuclear energy plans 
demonstrate why. Indian officials indicate they plan to import 
at least 8 new 1,000-megawatt power reactors by the year 2012 
and additional reactors in the years ahead.
    Preliminary private studies suggest that even just two of 
these reactor contracts for U.S. firms would add 3,000 to 5,000 
new direct jobs and about 10,000 to 15,000 indirect jobs in the 
United States. So I would call your attention to the strong 
commercial letter of intent we negotiated with India, which has 
been strongly endorsed by key U.S. firms.
    These, Mr. Chairman, are the key benefits of the 
initiative, and we believe they are compelling. So let me 
briefly address the question of why now? Because we believe the 
time is now for Congress to move forward on the 123 Agreement.
    First, as you mentioned in your opening statement, Mr. 
Chairman, we need to capitalize on the positive momentum in our 
relations. For 60 years, United States-India relations have 
gone through recurring cycles of euphoria and disappointment, 
ups and downs, highs and lows. Now we are on an upward swing, 
and so we need to capture that momentum, locking in the very 
significant gains that have been achieved in recent years.
    Second, we need to establish a platform on which the next 
administrations in both countries can build. The United States 
goes to the polls in 7 weeks. India must hold an election 
within 6 months of that. So as both countries prepare for 
elections, it is important to remember, as I said at the 
outset, that the transformation of United States-India 
relations began when both countries were governed by different 
political parties.
    The Clinton and Vajpayee administrations established the 
platform on which the Bush and Singh administrations have 
built. Just as our predecessors built the positive legacy on 
which this civil nuclear initiative builds, it is important 
that we leave the next American President and Indian Prime 
Minister a platform on which they, in turn, can build.
    Finally, Mr. Chairman, let me say something about the 
package you have before you. We believe it is a strong package 
based on solid Presidential determinations and consistent with 
the requirements Congress laid out for us in the Hyde Act. 
Indeed, I want to assure you, Mr. Chairman, and also the 
Congress, that the United States sought a Nuclear Suppliers 
Group exception for India consistent with the Hyde Act and at 
the same time capable of commanding a consensus within the 
group.
    The Hyde Act does not require incorporation of its specific 
terms and restrictions in the NSG exception, but we pursued the 
NSG exception with a careful eye to Hyde. And the result is an 
NSG exception that contains no provision inconsistent with the 
Hyde Act and that takes account of its terms and restrictions.
    I know there are many technical questions, both about the 
exception and the President's determinations, and Under 
Secretary Rood is prepared to address these in greater detail. 
But I did want to speak to some of those we have heard most 
often.
    In our consultations with members and staff, these 
questions have arisen repeatedly. First, we have been asked 
what would happen if India conducts a nuclear weapons test? And 
the short answer is that while India maintains a sovereign 
right to test, we most certainly maintain a sovereign right to 
respond.
    We believe the Indian Government intends to uphold the 
continuation of the test moratorium it committed to in 2005 and 
reiterated in its September 5 statement. We also believe India 
will uphold its safeguards agreement with the IAEA.
    But Secretary Rice has noted clearly that we reserve the 
right to take appropriate action should India, nonetheless, 
resume nuclear testing. And as she told Congress on April 5, 
2006, ``We have been very clear with the Indians. Should India 
test, as it has agreed not to do, or should India in any way 
violate the IAEA safeguards agreements to which it would be 
adhering, the deal, from our point of view, would, at that 
point, be off.''
    Second, we have been asked why we did not support an 
automatic termination provision in the NSG. We could not 
support proposals to automatically terminate the exception if 
India tests because the Atomic Energy Act gives the President 
the statutory authority to waive restrictions if terminating 
cooperation would be ``seriously prejudicial to the achievement 
of U.S. nonproliferation objectives or otherwise jeopardize the 
common defense and security.'' To do so would have tied the 
hands of this and every President to exercise their authority 
under the Act.
    Third, we have been asked about enrichment and reprocessing 
technology. The Hyde Act does not allow for U.S. transfer to 
India of such technology, except in very narrowly limited 
circumstances. The administration continues to pursue, within 
the NSG, limitations on such transfers based on appropriate 
nonproliferation criteria.
    I know John Rood will also speak to these issues, and so, 
Mr. Chairman, let me just conclude with this. We look to the 
rise of India as an opportunity not just to share the benefits 
of the international system, but also the burdens and 
responsibilities of maintaining, strengthening, and defending 
it. Two administrations in both countries have sought to 
embrace that opportunity. We believe this initiative helps to 
do so and, thus, that it will shape the 21st century for the 
better.
    Thank you very much.
    [The prepared statement of Ambassador Burns follows:]

 Prepared Statement of Hon. William J. Burns, Under Secretary of State 
       for Political Affairs, Department of State, Washington, DC

    Mr. Chairman, Senator Lugar, distinguished members of the 
committee, thank you for inviting my colleague, Acting Under Secretary 
for Arms Control and International Security John Rood, and me to 
discuss the U.S.-India Civil Nuclear Cooperation Initiative and recent 
submission of the ``Agreement for Cooperation Between the Government of 
the United States of America and the Government of India Concerning 
Peaceful Uses of Nuclear Energy'' (123 Agreement) to the Congress for 
ratification.
    In 2005, President Bush and Indian Prime Minster Manmohan Singh 
sought to fundamentally transform the nature of the U.S.-India 
relationship. Our two countries have had uneven relations over the past 
50 years. We have worked together in selected areas, such as sparking a 
new ``Green Revolution'' in India, but that cooperation never 
translated into a broad-based strategic partnership.
    In hindsight, this estrangement seems curious. Our broad 
similarities as multireligious, multiethnic democracies should have 
made us partners. But in the cold-war era, India was a leader of the 
nonaligned movement while the United States and its Western partners 
focused on building partnerships and international structures to 
address the overarching geopolitical competition.
    President Clinton began the transformation in our relationship with 
India in the 1990s. He told the Indian Parliament in 2000 that we were 
``natural allies, two nations conceived in liberty, each finding 
strength in its diversity, each seeing in the other a reflection of its 
own aspiration for a more humane and just world.'' President Bush and 
Prime Minister Singh have now taken our relationship to the next level. 
In March 2006, they announced joint ventures in 18 different fields, 
including education, science and technology, agriculture, and defense. 
Mr. Chairman, my colleague and I are here today to ask the Senate for 
its support in solidifying our cooperation with India in the civil 
nuclear field--the signature, strategic effort that Congress and the 
administration have undertaken with India since 2005. By addressing, 
and thus surmounting, the principal obstacle that has, for decades, 
stood in the way of better relations, the nuclear agreement is not only 
important on its own terms but has moved our relations farther and 
faster forward than any other step.
    India's emergence on the global scene is both inevitable and 
positive. By 2025, India will most likely rank among the world's five 
largest economies. India will soon be the world's most populous nation, 
and it will soon have the largest and fastest growing middle class in 
the world.
    India's Armed Forces, like ours, are committed to the principle of 
civilian control. India is a democracy--and a very successful one that 
has defied the expectations of so many who believed the country was too 
diverse to succeed. We believe India will support a peaceful balance of 
power in Asia. In short, India is an emerging major power whose society 
is open, transparent, democratic, and stable. Its government counts 
diversity as an abiding strength and values and protects the rule of 
law. India's political transitions, like ours, are marked by popular 
discourse and elections. India is a role model in the international 
community.
    Establishing and strengthening our strategic partnership with India 
has been a key foreign policy priority for the administration, as it 
was for our predecessor and, as I suspect, it will be for our 
successor. No wonder, then, that this relationship and the Civil 
Nuclear Cooperation Initiative have received such broad, bipartisan 
support from the Congress.
    Meanwhile, the American people and the private sector have outpaced 
government interactions and already are pulling our two countries 
closer together. Today there are nearly 3 million Indian-Americans in 
the United States, over 80,000 Indian students enrolled in U.S. 
colleges and universities, while tens of thousands of American citizens 
are living and working in India. India has become one of our fastest 
growing export markets and bilateral trade continues to expand, 
doubling over the past 3 years to top $42 billion in 2007. Indeed, U.S. 
goods and service exports to India were up 75 percent last year alone, 
cutting our trade deficit with India by 42 percent. We also are 
continuing to work closely with India to help further open its markets 
and improve its investment climate. Two-way investment already is 
rapidly rising and in 2007 Indian investment in the United States 
passed $2 billion. India has been a valuable partner in the fight 
against terrorism and disease, drugs and proliferation. These global 
scourges present particular challenges for South Asia and India's 
leadership on these issues has made it a force for stability in a 
volatile region.
    Mr. Chairman, relations between the United States and India are 
strong, but we are on the cusp of something greater. As both the United 
States and India approach elections, we believe this Congress now has 
the opportunity to lay a foundation that will allow successor 
governments in both countries to take U.S.-India relations to the next 
level. Congress can do this by making civil nuclear cooperation between 
our two countries a reality. With the approval of India's safeguards 
agreement by the International Atomic Energy Agency Board of Governors, 
and an exception authorizing nuclear trade with India approved by the 
Nuclear Suppliers Group, congressional ratification of the 123 
Agreement is the final step in bringing this multiyear effort to 
fruition.
    We fully appreciate the extraordinary nature of the timeframe 
within which we are asking the Congress to consider this initiative. 
The questions that this initiative raises are important to our national 
security, to the future of our relationship with an emerging major 
power, and to nonproliferation worldwide. We owe you our thanks as we 
ask for your forbearance. We would not be asking for such exceptional 
consideration if we did not believe it was absolutely necessary to 
complete an initiative on which both the administration and Congress 
have worked so hard since 2005.
    If we act together now, we can be certain that the government in 
New Delhi will support the full realization of the 123 Agreement and 
civil nuclear cooperation with the United States. Just as we will soon 
undergo a political transition, so too, will India next spring. I 
believe it is very important that we seize upon the momentum we have 
now, with partners that are devoted to fulfilling the terms of a 
complex negotiation.
    Mr. Chairman, we believe that moving forward on the U.S.-India 
Civil Nuclear Cooperation Initiative also will help advance other areas 
in the U.S.-India relationship. It will facilitate and expand ongoing 
cooperation in agriculture, science and technology, defense, and joint 
democracy endeavors. The Initiative also offers far-reaching economic, 
environmental, and security benefits.
    India's rapidly expanding economy, coupled with its population 
growth, has created an enormous demand for energy. After averaging just 
3.2 percent growth between 1950-80 under a heavily state-controlled 
economy, reforms in the 1980s and 1990s boosted India's annual growth 
rate to around 6 percent a year over the past 20 years. In the past 4 
years, India has averaged growth of 8.9 percent. Indian companies are 
world leaders in information technology, pharmaceuticals, steel, and 
many other industries. To continue its rapid economic expansion, India 
urgently requires new sources of power generation. India already 
suffers from a significant electricity shortage which shows no sign of 
easing. Between 1980 and 2001, demand in India increased by 208 percent 
making it one of the largest energy consumers in the world. By 
contrast, China, often thought of as the next big energy consumer, saw 
a 130-percent increase over the same period. India is struggling to 
keep up with its energy demands, with many urban areas currently 
subject to unscheduled blackouts and routine daily interruptions of 
power. These shortages are expected to become more severe--thus 
preventing India's growing industries from functioning effectively. 
Such unreliability is detrimental to India's economic growth and a 
deterrent to foreign investment.
    Various studies project that India's demand for electricity will 
continue to increase dramatically over the next 15 years. Expanding 
India's access to nuclear power--a clean, viable alternative to fossil 
fuels--is a partial answer to this important problem. The Indian 
Government has announced plans to expand its nuclear sector in the 
coming years to satisfy up to 20 percent of its demand for energy. 
Nuclear energy currently accounts for only 3 percent of India's power 
generation. To put this in perspective, even the United States, which 
has historically limited nuclear energy use, derives over 20 percent of 
its power from nuclear energy. Japan derives 30 percent, Switzerland 
nearly 40 percent, and France roughly 85 percent.
    For the people of rural India, where only 55 percent of households 
even have access to electricity, the reality of a reliable, 
uninterrupted source of electricity will improve quality of life for 
millions, promote economic development, and help to stabilize spiraling 
food prices.
    Civil nuclear cooperation with India also could have significant 
environmental benefits since nuclear energy does not emit greenhouse 
gases. Between 1990 and 2001 India's carbon emissions increased by 61 
percent; a rate of growth surpassed only by China. Extrapolating from 
these trends, scientists expect that this will only get worse. Between 
2001 and 2025, scientists predict that India's carbon emissions will 
grow by 3 percent annually, twice the United States predicted emissions 
growth. Power plants are the main source of Indian carbon dioxide 
emissions. These high emissions, coupled with emissions from other 
sources, have made all four of India's largest cities--New Delhi, 
Mumbai, Chennai, and Kolkata--among the most polluted in the world. 
Nuclear energy in India would be an important alternative to the 
carbon-based fossil fuels that are currently used to produce the vast 
majority of India's electricity today. This would create cleaner air 
and a healthier environment while making an important contribution to 
halting global warming. Indian officials have projected that civil 
nuclear cooperation could lead to the import of up to 40 gigawatts of 
new power generation capacity by 2020. A program even half that 
ambitious would reduce India's carbon output by 150 million tons 
annually. This is equivalent to half the total carbon dioxide output of 
California.
    For the United States, the Civil Nuclear Cooperation Initiative 
will open up trade and investment opportunities for U.S. firms in the 
multibillion dollar Indian nuclear energy sector for the first time in 
over three decades. Meeting India's demand for civilian nuclear 
technology, fuel, and support services holds the promise of substantial 
new business for the American nuclear industry, which will translate 
into new jobs and export income for the United States. A number of 
private studies of the Initiative's economic impact estimate that the 
award of new contracts to American nuclear firms will result in the 
creation of thousands of new jobs.
    Civil nuclear cooperation also will have an impact far beyond the 
nuclear energy sector. By unlocking trade in civil nuclear technology, 
we will help unlock a broader and deeper relationship, which would 
result in increased trade in many other areas of cutting edge 
technology, such as space, biotechnology, and dual-use high 
technology--all of which are critical to India's economic growth and 
development. This initiative is a key element of our growing 
partnership with India: It helps make possible significant achievements 
in many other areas of cooperation. By including civil nuclear 
cooperation in our broad spectrum of collaborative activities, the 
rewards of a U.S.-India partnership can truly reach every Indian and 
American, from farmer to physicist.
    We expect that the success of the U.S. nuclear industry in the 
Indian market will flow from the high quality of the products and 
services they provide. Without approval and implementation of the 123 
Agreement, however, U.S. nuclear firms will be precluded from competing 
in this important new global market. Reflective of our new relationship 
with India, the Indian Government has publicly stated its intention to 
work with U.S. nuclear firms. But international competition will, 
inevitably, be intense and we want to avoid exposing U.S. firms to any 
unnecessary delays.
    The administration has taken a number of steps to ensure the U.S. 
nuclear industry will not suffer any competitive disadvantages during 
the 123 Agreement review process. The Indian Government has provided 
the United States with a strong Letter of Intent, stating its intention 
to purchase reactors with at least 10,000 megawatts (MW) worth of new 
power generation capacity from U.S. firms. India has committed to 
devote at least two sites to U.S. firms. India also has committed to 
adhere to the Convention on Supplementary Compensation for Nuclear 
Damage. Adherence to this international liability regime by the Indian 
Government is an important step in ensuring U.S. nuclear firms are 
competing on a level playing field with other international 
competitors. The expansion of U.S. nuclear firms into India's growing 
market will provide a boost for our revitalized domestic nuclear 
industry. Cooperation also will provide the United States with an 
important new partner in conducting advanced research and development 
of nuclear technology as we strive to develop new sustainable sources 
of energy.
    Finally, the Civil Nuclear Cooperation Initiative advances U.S. 
nonproliferation goals by bringing India, a state with expertise in the 
full nuclear fuel cycle, closer to the global nonproliferation 
mainstream. My colleague, Acting Under Secretary John Rood, will 
discuss in detail India's specific nonproliferation commitments and the 
actions it has taken consistent with the 2005 Joint Statement and the 
Hyde Act. However, I would like to provide an overview for the 
committee of the real nonproliferation benefits the Initiative provides 
in advancing the fight against the spread of weapons of mass 
destruction and their delivery systems.
    The Initiative has been predicated on the notion that the global 
nonproliferation regime is strengthened by drawing India closer, rather 
than leaving it on the outside. The reality for decades has been that 
India possesses nuclear weapons and has no plans to sign the Nuclear 
Non-Proliferation Treaty in the foreseeable future. The Initiative 
takes a pragmatic approach to dealing with this situation. 
International Atomic Energy Agency (IAEA) Director General Mohamed 
ElBaradei has endorsed this view and welcomed the Initiative noting, 
``Out-of-the-box thinking and active participation by all members of 
the international community are important if we are to advance nuclear 
arms control, nonproliferation, safety and security, and tackle new 
threats such as illicit trafficking in sensitive nuclear technology and 
the risks of nuclear terrorism.''
    Through the Initiative with the United States, India has committed 
itself to follow the same practices as responsible nations with 
advanced nuclear technology. It has agreed to participate in 
cooperative efforts to deal with the challenges posed by the 
proliferation of weapons of mass destruction and their delivery 
systems. In particular, in the July 2005 Joint Statement, India made a 
number of important nonproliferation commitments, including to:

   Identify and separate its civil and military nuclear 
        facilities and programs.
   Place all current and future civil nuclear facilities under 
        IAEA safeguards--in perpetuity. Under India's separation plan, 
        65 percent of India's current nuclear power generation would be 
        placed under safeguards and opened to IAEA inspection by 2014. 
        This proportion could rise to as high as 80 percent in future 
        years as new reactors are built and imported by India. Without 
        the Initiative, India's nuclear infrastructure would remain 
        opaque and operate substantially outside safeguards.
   Negotiate and sign an Additional Protocol with the IAEA. 
        While India already has a solid nuclear nonproliferation 
        record, conclusion of an Additional Protocol would give the 
        IAEA expanded rights to access information about the full range 
        of India's civil nuclear fuel cycle, providing even more 
        transparency.
   Implement a robust national export control system. India's 
        harmonization with and adherence to the Missile Technology 
        Control Regime (MTCR) and the Nuclear Suppliers Group (NSG) 
        Annexes and Guidelines will help ensure unlawful transfers of 
        sensitive nuclear- and missile-related technologies do not take 
        place.
   Work with the United States to conclude a multilateral 
        Fissile Material Cutoff Treaty (FMCT). India has expressed 
        support for moving forward on FMCT negotiations in the 
        Conference on Disarmament.
   Refrain from transfers of enrichment and reprocessing 
        technologies to states that do not already possess them and 
        support efforts to limit their spread. India's commitment will 
        support President Bush's initiative to avoid the spread of the 
        technologies of greatest concern from the standpoint of nuclear 
        weapons development. India also has expressed support for 
        efforts to develop international fuel banks as an incentive for 
        states to not pursue such technologies.
   Committed to continuing its moratorium on nuclear testing. 
        This policy was publicly reaffirmed by Indian Foreign Minister 
        Mukherjee on September 5 and contributes significantly to 
        enhancing stability in a volatile region.

    In addition to these commitments, India has played a constructive 
role in dealing with some of today's most pressing nonproliferation 
challenges, including voting twice with the United States to refer Iran 
to the U.N. Security Council. We believe successful implementation of 
the Initiative will presage further and closer cooperation between 
India, the United States, and its allies on current and future 
nonproliferation challenges.
    India has proven itself a responsible actor with respect to the 
export of sensitive nuclear technologies. Based on its sound record on 
onward proliferation, its enhanced nonproliferation commitments, and 
its clear and expansive energy needs, India presents a unique case for 
civil nuclear cooperation. This reality has been recognized by the 
international nonproliferation community as reflected in the unanimous 
approval of India's safeguards agreement by the IAEA Board of Governors 
in July 2008 and the consensus approval earlier this month by the 
Nuclear Suppliers Group of an exception to authorize members to engage 
in civil nuclear trade with India.
                               conclusion
    President Bush and Prime Minister Singh have demonstrated a 
commitment to transforming the strategic relationship between our two 
nations. Approval of the 123 Agreement with India would surmount a 
longstanding obstacle in our relations and pave the way for the United 
States and India to address as partners the global security, economic, 
and environmental challenges of the 21st century. With your support, we 
hope this Congress will take this critical action to make the historic 
vision of closer U.S.-India cooperation a reality.

    Senator Dodd. Thank you very much, Mr. Secretary.
    I note we have been joined by our colleagues Senator Kerry, 
Senator Boxer, and Senator Webb. We thank all three of them for 
being here.
    Let me turn to you, Mr. Rood, if I can. I want to also note 
the presence of Director Richard Stratford, who is the director 
of the Office of Nuclear Energy, Safety, and Security Affairs 
in the Bureau of International Security and Nonproliferation, 
Department of State. We welcome you as well.
    And John Rood is the Acting Under Secretary for Arms 
Control and International Security, at the Department of State, 
and we welcome your testimony.

STATEMENT OF HON. JOHN G. ROOD, ACTING UNDER SECRETARY FOR ARMS 
CONTROL AND INTERNATIONAL SECURITY; ACCOMPANIED BY RICHARD J.K. 
  STRATFORD, DIRECTOR, OFFICE OF NUCLEAR ENERGY, SAFETY, AND 
    SECURITY AFFAIRS, BUREAU OF INTERNATIONAL SECURITY AND 
     NONPROLIFERATION, DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Rood. Thank you, Mr. Chairman, and thank you for the 
opportunity to testify today in support of the United States-
India Civil Nuclear Cooperation Initiative.
    As you know, the President recently submitted a package of 
documents to the Congress with the determinations required by 
the Hyde Act. The administration believes this package meets 
the criteria established by Congress in the 2006 Hyde Act. We, 
therefore, urge the Congress to act this session to bring into 
force the United States-India Agreement for Peaceful Nuclear 
Cooperation, or so-called 123 Agreement since it is concluded 
pursuant to section 123 of the Atomic Energy Act of 1954.
    The United States-India Civil Nuclear Cooperation 
Initiative provides substantial political, economic, 
nonproliferation, and security benefits. I will focus on the 
nonproliferation and security benefits of this initiative in my 
remarks.
    Since the outset of the initiative, we have sought to build 
a strategic partnership with India and to advance our 
nonproliferation objectives by bringing India into the 
international nonproliferation mainstream. In the July 18, 
2005, joint statement by President Bush and Prime Minister 
Singh, India made a number of important nonproliferation 
commitments. Many of these commitments were incorporated into 
the Hyde Act. They were reiterated as well by India's Minister 
of External Affairs, Mr. Mukherjee, in a statement on September 
5, 2008.
    These important nonproliferation commitments provide a 
foundation upon which we have continued to build over the last 
3 years with the completion of India's separation plan, the 123 
Agreement, the India IAEA safeguards agreement, and most 
recently the Nuclear Suppliers Group decision to allow for 
civilian nuclear trade with India.
    Mr. Chairman, allow me to address some of the issues that 
have been raised during briefings for the committee staff by 
administration officials. Regarding India's May 2006 separation 
plan, we believe its implementation will produce a significant 
nonproliferation gain. Once implemented, the percentage of 
India's total installed nuclear power capacity under IAEA 
safeguards will increase from 19 percent today to 65 percent by 
2014.
    A further increase up to 80 percent, or perhaps even 
higher, is possible if India expands its civil nuclear 
infrastructure through foreign supply and indigenous 
development as it currently plans.
    The nonproliferation implications of placing such 
facilities under IAEA safeguards are clear. Every existing or 
new facility placed under safeguards will be designated as a 
civilian facility and will not be available to potentially 
contribute to India's nuclear weapons program. Furthermore, the 
civil nuclear cooperation initiative creates an incentive for 
India to declare as many facilities as possible as civil in 
order to enjoy the benefits of international cooperation.
    India's safeguards agreement with the International Atomic 
Energy Agency, or IAEA, provides for effective safeguards on 
Indian facilities and material. As IAEA Director General 
Mohamed ElBaradei said in speaking to the IAEA Board of 
Governors, ``The agreement is of indefinite duration. There are 
no conditions for the discontinuation of safeguards other than 
those provided by the safeguards agreement itself.''
    In addition, once concluded, the additional protocol will 
provide additional nonproliferation benefits and greater 
monitoring of materials, equipment, and technology. IAEA 
Director General ElBaradei reports that the IAEA and India are 
making substantial progress on an additional protocol, and we 
continue to urge a speedy and successful conclusion to these 
negotiations.
    Beyond the safeguards agreement and the additional 
protocol, India has made strong progress in the area of export 
controls. India is taking the necessary steps to secure nuclear 
and other sensitive materials and technology, including through 
the enactment and enforcement of comprehensive export control 
legislation and regulations as well as harmonization of its 
export control laws, regulations, policies, and practices with 
the guidelines and practices of the Missile Control Technology 
Regime and the Nuclear Suppliers Group, as it committed to do 
in the July 2005 joint statement.
    Let me also address some aspects of the recently approved 
Nuclear Suppliers Group statement on civil nuclear cooperation 
with India. This statement creates the exception that permits 
international civil nuclear trade with India by NSG members. An 
initial U.S. draft text was first discussed at an NSG meeting 
on August 21 and 22 of this year. NSG participating governments 
met again from September 4 through 6, and after intensive 
discussions, the NSG reached consensus on September 6 to allow 
for civil nuclear cooperation with India.
    Let me be clear, Mr. Chairman, that during these 
negotiations no side deals were made by the United States to 
achieve consensus at the Nuclear Suppliers Group. We achieved 
consensus because there was a strong desire among participating 
governments to find a way to enable civil nuclear cooperation 
trade with India while reinforcing the global nonproliferation 
regime. We were able to do both.
    The text of the statement adopted by the NSG is fully 
consistent with the Hyde Act. The same Indian nonproliferation 
commitments made in the July 2005 joint statement between the 
President and Prime Minister Singh, which were also 
incorporated in the Hyde Act, are included in the NSG 
statement. In fact, the NSG explicitly granted the exception to 
allow for nuclear trade with India based on the commitments and 
actions by India.
    The exception provides for ongoing dialogue and cooperation 
between the NSG and India through outreach by the NSG chairman 
and permits the NSG to periodically consider implementation of 
the exception and hold consultations on any issues or 
circumstances of concern.
    India's voluntary unilateral moratorium on nuclear testing 
is important. We have been very clear on this with the Indian 
Government. Just as India has maintained its sovereign right to 
conduct a nuclear test, so, too, have we maintained our right 
to take action in response.
    As Secretary Rice said before this committee in April 2006, 
and I quote, ``We have been very clear with the Indians. Should 
India test, as it has agreed not to do, or should India in any 
way violate the IAEA safeguards agreements to which it would be 
adhering, the deal, from our point of view, would be, at that 
point, off.''
    In this 123 Agreement, for example, either party has the 
right to terminate the agreement and seek the return of any 
transferred materials and technology if it determines that 
circumstances demand such action. Likewise, the NSG exception 
permits any participating government, including the U.S., to 
request a meeting of the group to consider actions if 
circumstances have arisen which require consultations.
    Mr. Chairman, we believe this initiative will have a 
lasting strategic impact in building a new strategic 
partnership with India, reducing India's dependency on fossil 
fuels and resulting greenhouse gas emissions. It will help lift 
millions of Indian citizens out of poverty while, at the same 
time, strengthening the nuclear nonproliferation regime.
    So, in conclusion, Mr. Chairman, Senator Lugar, and other 
Senators on the committee, I thank you for the opportunity to 
testify before you today.
    [The prepared statement of Mr. Rood follows:]

  Prepared Statement of Hon. John C. Rood, Acting Under Secretary of 
State for Arms Control and International Security, Department of State, 
                             Washington, DC

    Mr. Chairman, thank you for the opportunity to testify in support 
of the U.S.-India Civil Nuclear Cooperation Initiative.
    As you know, the President recently submitted a package of 
documents to the Congress with the determinations required by the Hyde 
Act. The administration believes this package meets the criteria 
established by the Congress in 2006 in the Hyde Act. We therefore urge 
the Congress to act this session to bring into force the U.S.-India 
Agreement for Peaceful Nuclear Cooperation or so-called 123 Agreement, 
pursuant to section 123 of the Atomic Energy Act of 1954, as amended.
    The U.S.-India Civil Nuclear Cooperation Initiative provides 
substantial political, economic, nonproliferation, and security 
benefits. I will focus on the nonproliferation and security aspects of 
the Initiative in my remarks.
    Since the outset of this Initiative, we have sought to build a 
strategic partnership with India, and to advance our nonproliferation 
objectives by bringing India into the international nonproliferation 
mainstream. In the July 18, 2005, Joint Statement by President Bush and 
Prime Minister Singh, India made a number of important nonproliferation 
commitments. Many of these commitments were incorporated into the Hyde 
Act. They were reiterated by India's External Affairs Minister 
Mukherjee in a statement on September 5, 2008.
    These important nonproliferation commitments provide a foundation 
upon which we have continued to build over the past 3 years with the 
completion of India's Separation Plan, the 123 Agreement, the India-
IAEA Safeguards Agreement, and, most recently, the Nuclear Suppliers 
Group decision to allow civilian nuclear trade with India.
    Mr. Chairman, allow me to address some of the issues that have been 
raised during briefings for the committee staff by administration 
officials.
    Regarding India's May 2006 Separation Plan, we believe its 
implementation will produce a significant nonproliferation gain. Once 
implemented, the percentage of India's total installed nuclear power 
capacity under IAEA safeguards will increase from 19 percent today to 
65 percent by 2014. A further increase up to 80 percent is possible if 
India expands its civil nuclear infrastructure through foreign supply 
and indigenous development as it currently plans.
    The nonproliferation implications of placing such facilities under 
IAEA safeguards are clear. Every existing or new facility placed under 
safeguards will be designated as a civilian facility and will not be 
available to potentially contribute to India's nuclear weapons program. 
Furthermore, the Civil Nuclear Cooperation Initiative creates an 
incentive for India to declare as many facilities as possible as 
``civil'' in order to enjoy the benefits of international cooperation.
    India's Safeguards Agreement with the International Atomic Energy 
Agency (IAEA) provides for effective safeguards on Indian facilities 
and material. As IAEA Director General Mohamed ElBaradei told the IAEA 
Board of Governors ``. . . the agreement is of indefinite duration. 
There are no conditions for the discontinuation of safeguards, other 
than those provided by the safeguards agreement itself.'' In addition, 
once concluded, an Additional Protocol, will provide additional 
nonproliferation benefits and greater monitoring of materials, 
equipment, and technologies. IAEA Director General ElBaradei reports 
that the IAEA and India are making substantial progress on an 
Additional Protocol and we continue to urge a speedy and successful 
conclusion to these negotiations.
    Beyond the Safeguards Agreement and the Additional Protocol, India 
has made strong progress in the areas of export controls. India is 
taking the necessary steps to secure nuclear and other sensitive 
materials and technology, including through the enactment and effective 
enforcement of comprehensive export control legislation and 
regulations, as well as harmonization of its export control laws, 
regulations, policies, and practices with the guidelines and practices 
of the Missile Technology Control Regime and the Nuclear Suppliers 
Group, as it committed to do in the July 2005 Joint Statement.
    Let me also address some aspects of the recently approved Nuclear 
Suppliers Group Statement on Civil Nuclear Cooperation with India. This 
statement creates the exception that permits international civil 
nuclear trade with India by NSG members. An initial U.S. draft 
exception text was first discussed at an NSG meeting on August 21-22. 
NSG Participating Governments met again from September 4-6, and after 
intensive discussions, the NSG reached consensus on September 6 to 
allow for civil nuclear cooperation with India.
    Let me be clear that during these negotiations no side deals were 
made by the United States to achieve consensus at the Nuclear Suppliers 
Group. We achieved consensus because there was a strong desire among 
Participating Governments to find a way to enable civil nuclear trade 
with India while reinforcing the global nonproliferation regime. We 
were able to do both.
    The text of the statement adopted by the NSG is fully consistent 
with the Hyde Act. The same Indian nonproliferation commitments made in 
the July 2005 Joint Statement between President Bush and Prime Minister 
Singh, which were also incorporated in the Hyde Act, are included in 
the NSG statement. In fact, the NSG explicitly granted the exception 
based on these commitments and actions by India. The exception provides 
for ongoing dialogue and cooperation between the NSG and India through 
outreach by the NSG chairman and permits the NSG to periodically 
consider implementation of the exception and hold consultations to 
address any circumstances of concern.
    India's voluntary, unilateral moratorium on nuclear testing is 
important. We have been very clear on this subject with the Indian 
Government. Just as India has maintained its sovereign right to conduct 
a test, so too have we maintained our right to take action in response. 
As Secretary Rice said before this committee in April 2006, ``We've 
been very clear with the Indians--should India test, as it has agreed 
not to do, or should India in any way violate the IAEA safeguards 
agreements to which it would be adhering, the deal, from our point of 
view, would at that point be off.'' In the 123 Agreement, for example, 
either party has the right to terminate the agreement and seek the 
return of any transferred materials and technology if it determines 
that circumstances demand such action. Likewise, the NSG exception 
permits any Participating Government, including the United States, to 
request a meeting of the group to consider actions if ``circumstances 
have arisen which require consultations.''
    Mr. Chairman, we believe that this Initiative will have a lasting 
strategic impact in building a new strategic partnership with India, 
reducing India's dependency on fossil fuels and resulting greenhouse 
gas emissions, and will help lift millions of Indian citizens out of 
poverty, while at the same time strengthening the nuclear 
nonproliferation regime.
    Mr. Chairman, thank you again for the opportunity to testify today. 
I look forward to answering your questions.

    Senator Dodd. Thank you very, very much.
    And let me ask the Clerk to put an 8- or 9-minute clock on 
here, and I won't bang down the gavel. There are a lot of very 
important questions I know colleagues have, as Senator Lugar 
has already pointed out, and we will try to adhere to that time 
if we can.
    Let me begin with sort of the practical questions, if I 
can, Secretary Burns. What does the administration want 
Congress to do?
    Secretary Burns. Our hope, Mr. Chairman, is that the 
Congress will be able to move in this session to approve the 
initiative.
    Senator Dodd. Well, in that regard, that requires certain 
waivers. So you are asking the Congress to waive the 30-day 
requirement under the Atomic Energy Act legislation. Is that 
correct?
    Secretary Burns. Yes.
    Senator Dodd. Are you willing to accept the fact that there 
are rumors that the administration may just try and put this 
agreement without any further consideration by the committee as 
part of a continuing resolution, or would you prefer, as we 
hope you will, a product that was worked on by this committee 
and by the bicameral, bipartisan process here to produce 
something that would pass muster here? Which is your 
preference?
    Secretary Burns. Our preference is certainly to work with 
the committee and work with the Congress toward an approval 
that all of us support.
    Senator Dodd. Because I know there are members here and 
there are others in the other body who have expressed some 
reservations about this. And I want to know at the outset, 
while we have a truncated amount of time, whether or not the 
administration is prepared to work with us to try and resolve 
some of those matters, if at all possible, as we move forward.
    Secretary Burns. Yes, sir.
    Senator Dodd. Let me, if I can, move to another line of 
questioning, a series of questions. And after that, I will turn 
to Senator Lugar. I have additional ones beyond this, but these 
may require some time for you to respond to them.
    It has to do with the fuel assurances and the United 
States-India agreement. In the article 5, section 6 of the 
agreement with India repeats President Bush's March 2006 fuel 
assurances. Let me remind my colleagues and others what these 
promises include: To support an Indian effort to develop a 
strategic reserve of nuclear fuel to guard against any 
distribution of supply over the lifetime of India's reactors. 
And if a fuel disruption occurs, to convene a group of friendly 
supplier countries to pursue such measures as would restore 
fuel supply to India.
    Article 2, section 2 of the agreement adds that the scope 
of cooperation under the agreement may include the development 
of that strategic reserve. These promises could give the 
appearance of undercutting U.S. actions under the Atomic Energy 
Act if India were to conduct a nuclear test.
    So let me ask you, and I think Senator Lugar referred to 
some of these already in his opening comments, let me ask 
several of them here and ask you to respond and come back. What 
is the legal effect of including these assurances in the 
agreement? If those assurances have no legal effect, then why 
are they included in the agreement at all?
    What will the United States do to help India create its 
strategic reserve of nuclear fuel? Does the Government of India 
agree that those assurances are not legally binding? And if so, 
has it said so in public? And if the assurances are only a 
political commitment, which is what was raised, again, by 
Senator Lugar, what does that political commitment mean?
    Would you address those issues?
    Secretary Burns. Sure. I will start, and then I am sure 
John Rood will want to add a little bit. First, the commitments 
that the President made that are recorded in the 123 Agreement 
are firm, solemn commitments on the part of the President----
    Senator Dodd. Are they legal commitments, or are they 
political?
    Secretary Burns. As we made clear, the President made clear 
in the transmittal letter, they are political commitments.
    Senator Dodd. Are they binding on additional 
administrations, come January 20?
    Secretary Burns. They are a political commitment, sir, in 
the sense that we are determined to help India to try to ensure 
a reasonable, steady supply of fuel. And should disruptions 
arise, for example, trade disputes, a commercial firm fails to 
meet its requirements, then we are firmly determined to do 
everything we can to help in that instance.
    But we are determined to meet those commitments to the 
fullest extent consistent with U.S. law. And so, any President 
would be bound by U.S. law, just as you have described, and I 
believe that the Indians understand the clarity of our 
position.
    Senator Dodd. Have they taken a public position reflecting 
those assurances that you are aware of?
    Secretary Burns. With regard to their understanding that 
our actions are going to be guided by U.S. law and will be 
consistent with U.S. law, I believe the Indians do understand 
that.
    Senator Dodd. Forgive me if I am maybe asking a naive 
question here, but a political commitment and a legally binding 
commitment, there are those of us here that are having some 
difficulty understanding the distinction. These are political 
commitments. To what extent are they legally binding?
    Mr. Rood. The President has made political commitments, 
Senator, in his statements and in the agreements that we have 
struck with the India Government.
    Senator Dodd. I understand that.
    Mr. Rood. And so, the 123 Agreement provides a legal 
framework. It is an enabling piece of agreement, which allows 
for cooperation to occur. It does not compel American firms, 
for instance, to sell a given product to India.
    And so, in some of the scenarios that were mentioned, some 
of the opening statements, such as a nuclear test, for example, 
the 123 Agreement preserves our right, as required under the 
Atomic Energy Act, for the United States to terminate 
cooperation and to seek the return of materials if we judge 
that to be the appropriate course of action at that time.
    There are separate pieces of U.S. legislation which are 
amendments to the Atomic Energy Act that would contain 
requirements for any future President or administration to 
follow. Section 129 of the Atomic Energy Act does have a--
provides some flexibility for the President and the 
administration to determine the circumstances at that time. And 
should there be a determination by the President that a 
cessation of cooperation would be seriously prejudicial to our 
nonproliferation objectives or undermine or jeopardize our 
common defense and security, then the President would have the 
authority under the present statute to waive that restriction.
    Senator Dodd. Well, let us assume we are able to have this 
agreement come into force this year. Let me ask you the 
following. Would the President, this President be obligated to 
help India acquire a nuclear fuel reserve sufficient to enable 
India to ride out any international sanctions as a result of a 
nuclear test? Would he be required to do that, legally required 
to do that under this agreement?
    Mr. Rood. What we have agreed to do is aid India in the 
creation of a strategic reserve.
    Senator Dodd. Is he legally required to do that under this 
agreement?
    Mr. Rood. The President has made a commitment to do that. 
The agreement, as a legal matter, is, as I say, only an 
enabling piece of legislation. We in the United States 
Government--for instance, it is not a Government activity to 
produce nuclear fuel. It is a commercial activity in the United 
States, and we in the U.S. Government could not legally compel 
American firms to provide fuel to India if they did not wish to 
do so.
    Senator Dodd. Let me take it a step further. If India were 
to buy some U.S. nuclear fuel in October, next month, and then 
let us say they conducted a nuclear test in November. Would 
President Bush feel obligated to help India find alternative 
fuel sources to replace the supply that we would very likely 
cut off pursuant to section 129 of the Atomic Energy Act? And 
if not, why not?
    Mr. Rood. What I would say, Senator, is that we would have 
to evaluate the set of circumstances, of course, that existed 
at that time. India has made a commitment, most recently 
reiterated just on September 5, to maintain a unilateral 
moratorium on nuclear testing. So we do not expect that India 
would conduct a nuclear test.
    In the hypothetical that you raise, we would evaluate the 
circumstances that exist at that time. There are restrictions 
embodied in the Atomic Energy Act that would require the 
President to make certain determinations. If the President 
determined that nuclear cooperation with India should be 
terminated and, for instance, if we in the United States 
Government then moved to terminate the 123 Agreement, it would 
not be consistent with that spirit for us to encourage other 
countries to supply nuclear fuel if the United States did not.
    Senator Dodd. This is not purely hypothetical. There still 
is a residue of bitterness over the Tarapur case going back. 
And the reason I raise this is because I am fearful that we may 
be setting ourselves up for the same reaction.
    One of the arguments I made in favor of going forward, 
albeit with some reservations, is from the geopolitical 
perspective this is an important relationship between our two 
countries. I think most of my colleagues appreciate that there 
is a strategic issue involved in all of this.
    But I don't want to see us setting ourselves up to 
duplicate the very situation that contributed to a generation 
and a half of bitterness as a result of our relationship. And I 
am worried that by not being clear on this very point, raising 
the specter with India of how we would act because it is only a 
political commitment and not a legally binding one, that we run 
the risk of engendering that same kind of bitterness that 
persists today.
    Why shouldn't I be worried about that?
    Secretary Burns. Mr. Chairman, that is a very good 
question, and it is a quite legitimate concern. And certainly 
in the course of negotiations over recent years there has been 
a lot of concern devoted to this issue and a lot of differences 
from time to time as we and our Indian colleagues have tried to 
work through these issues.
    One of the reasons that the distinction between legally 
binding and politically binding has created such attention in 
India and the Indian media today, I think, has to do with the 
concern that somehow the firm Presidential commitment that has 
been made to try to provide that steady supply of fuel is 
undermined by what we think is an artificial distinction when 
we are talking about a firm commitment.
    What is very clear is that we will do everything we can to 
ensure that steady supply, except in extreme circumstances. And 
in those extreme circumstances, which John mentioned, when you 
are talking about the kinds of things under U.S. law, whether 
it is a test or an abrogation of a safeguards agreement, then 
our actions will be bound by U.S. law. And I guess that is the 
clearest way that I can put it.
    Senator Dodd. Well, I appreciate that. Let me turn to 
Senator Lugar.
    Senator Lugar. Mr. Chairman, just continuing to follow on 
this issue for a moment. Just yesterday, an official from 
India's Department of Atomic Energy was quoted in an Indian 
newspaper as saying, ``It is up to the U.S. to resolve its 
internal legal and political obligations, but India should be 
assured of continuous fuel supply.'' The same official also 
said, ``We want the U.S. to make it clear about the continuous 
supply of fuel as the congressional voting is fast 
approaching.''
    Now when the Indians talk about continuous fuel supply--and 
obviously, we have dwelled on this for a while--they feel this 
is the heart of the agreement. First of all, I am a little bit 
confused about the legal aspect, as opposed to a political 
commitment. But let us say, as a practical matter, that for 
some reason we decide to terminate their supply of fuel. Are we 
agreeing in this 123 Agreement then to help them get fuel from 
some other countries? In other words, what is the nature of our 
obligation in this situation?
    Mr. Rood. Senator Lugar, in the construction of the 123 
Agreement, we were conscious of the history of the United 
States-India relations with respect to Tarapur and other 
matters. But what we have agreed to do is because of the Indian 
sensitivities in this area is to help them maintain a steady 
supply of fuel.
    And what we have in mind are things such as, for some 
reason, that there should be a market disruption, some form of 
trade war, or something beyond India's control that would 
interrupt their supply of nuclear fuel, which again will supply 
a much larger percentage of India's overall energy and 
according to the Indian Government's projections. So, based on 
that, we would help in the U.S. Government. We have made a 
commitment to help in that regard.
    Should India take an action such as a nuclear test, we 
would again turn to the Atomic Energy Act to be our guide as to 
what the administration's obligations would be. And if we chose 
to terminate the 123 Agreement, as you mentioned, the U.S. 
would have the right to do so under the terms of the agreement. 
We would have the right to seek the return, to have the return 
of any equipment supplied and fuel supplied to India. And at 
that point, that would be the nature of the U.S. commitments.
    Now, as I mentioned, I think it would be inconsistent with 
a President's decision to terminate United States supply of 
fuel to then seek the supply from other countries of fuel to 
India.
    Senator Lugar. Well, let me pursue another question. This 
is sort of a housekeeping matter in a way. But Title II of the 
Hyde Act was titled ``The U.S. Additional Protocol 
Implementation Act.'' Now despite its passage 2 years ago and 
despite the Senate's ratification of the agreement in March 
2004, just weeks after President Bush asked the Senate to 
provide advice and consent, the administration has not yet 
brought our additional protocol into force.
    I have sent several letters to the Secretary of State and a 
letter to both State and Defense on this matter. And we have 
asked many times why the situation is unchanged, only to be 
told that you continue to have difficulties in achieving this 
for President Bush.
    Now will the U.S. additional protocol enter into force 
before the end of this year or even during the remaining weeks 
of the President's term in office?
    Mr. Rood. Senator, with respect to the additional protocol, 
of course, that is something that we are--we in the 
administration continue to work to bring into force for the 
United States. It is something that we at the State Department 
view ourselves as the engine for within the administration, 
trying to pull that matter across the finish line.
    The implementation of the U.S. additional protocol, of 
course, most of the activities will be accomplished by the 
Departments of Energy and Departments of Defense. And so, we 
continue to work very closely with our colleagues there to try 
to implement that agreement. We would like to do it as soon as 
practical, and it is something that, as I say, we continue to 
work closely with those other departments to try to urge them 
to complete the activities necessary to allow us then to bring 
that agreement into force.
    Senator Lugar. Well, is it a priority for this 
administration? In other words, Title II of the Hyde Act is 
titled ``The U.S. Additional Protocol Implementation Act,'' and 
it provides you with the authority you need to complete the 
ratification process. But as you say, after years, it still 
hasn't been implemented. And you are trying awfully hard in the 
last few days to get it done.
    I am just confused as to where it is and why we have had 
such a problem.
    Mr. Rood. With respect to the additional protocol, of 
course, as the Defense Department and Department of Energy 
begin the preparations to put certain facilities under 
safeguards, there are preparatory activities that they have 
indicated they need to complete.
    Again, we meet regularly with our colleagues. We work 
closely as an administration with the other departments, from 
the State Department, to try to encourage the completion of 
those activities that will, therefore, enable the United States 
to bring the additional protocol into force and apply 
safeguards more widely in the United States.
    But the issues are those of implementation, Senator, with 
respect to the activities of these particular departments.
    Senator Lugar. Well, I will let it rest there. This is a 
pretty tedious problem for the administration. Month after 
month, week after week, striving to get there and haven't quite 
got there, and the question is whether you make it by the 
finish line. One would not be optimistic hearing this report, 
but we will leave it at that.
    Hopefully, a lot of things are going to happen in a few 
days, or nothing is going to happen at all. And I think you 
both recognize that, and that is why you are here today, and 
that is why we are here.
    Well, let me ask one final thing. Article 6 of the proposed 
123 Agreement says the two parties grant each other consent to 
reprocess nuclear material but appears to make that consent 
contingent on India establishing a dedicated facility to carry 
out such reprocessing and on future agreements on arrangements 
and procedures under which the reprocessing in this new 
facility would take place.
    Is it correct that under this provision, reprocessing of 
nuclear material cannot take place unless and until the 
arrangements to which it refers have been concluded? And have 
these arrangements and procedures been concluded? And does the 
executive branch intend to submit these arrangements and 
procedures to the Congress for approval prior to their entry 
into force and the commencement of reprocessing?
    Mr. Rood. Senator, I believe the answers to your question 
in order are yes, no, and yes. The first question, if I have 
got you right, was whether the agreement would, in fact, 
require India to establish a dedicated facility for 
reprocessing under IAEA safeguards, and the answer to that is 
yes.
    On the second question, has the administration already 
completed negotiations on an agreement that would contain those 
practices and procedures with India, the answer is, no, we have 
not.
    And the third question, would those be submitted to 
Congress? And the answer is, yes, that is required under the 
Atomic Energy Act.
    Senator Lugar. Thank you. Thank you, Mr. Chairman.
    Senator Dodd. Thank you very much, Senator Lugar.
    Senator Kerry.
    Senator Kerry. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary and Mr. Rood, for being here 
today.
    I was in India at the time that this agreement was first 
announced, and I have been supportive of the fundamental 
direction of it from that moment to this day, though I still 
have some clarification issues that are of concern. But I want 
to say a few things about the support for it or the fundamental 
direction.
    I voted for the Hyde Act in December 2006 after some 
significant nonproliferation concerns were addressed because, 
as you have said here today and others have said, I viewed this 
as a very important way to strengthen the partnership between 
the world's oldest and largest democracies.
    I am inclined to support the negotiated agreement, but I 
want to look for some of these clarifications despite some 
lingering nonproliferation worries because of the importance of 
this emerging strategic partnership between the United States 
and India. And this deal will also help India meet its growing 
energy needs without relying as much on technologies that are 
unbelievably damaging to our environment, and that issue rises 
in urgency with respect to national security concerns.
    But make no mistake. I have said previously and I still 
believe that this is not the best agreement that should have 
initially been brought out in this negotiating process from a 
nonproliferation perspective. You can't go backward. It is 
where we are, and it is what we are dealing with. But I think 
it is really important for all of our colleagues on this 
committee to recognize the significant importance of bringing 
India into the nuclear mainstream, given its longstanding 
status outside the Nuclear Non-Proliferation Treaty regime.
    The bottom line is that we are better off with that than 
without it. But there are legitimate questions about whether 
this step will make it tougher to strengthen the global 
consensus against Iran's and North Korea's nuclear activities. 
That said, we can't lump India, a responsible democracy that 
plays by international rules and has a strong record of 
responsible stewardship of nuclear technology, in with those 
countries that have either outlaw or uncooperative governments.
    I hope and expect that this nuclear deal is going to open 
the door for greater cooperation with India on nonproliferation 
issues. Despite its own arsenal, India has long supported the 
goal of a world without nuclear weapons, a dream articulated 
now not only by Mahatma Gandhi, but it is shared by both of our 
Presidential candidates in this race.
    The new President should urge the Senate to ratify a treaty 
banning nuclear weapons testing, and then encourage India and 
its neighbors to sign that treaty and agree to a moratorium on 
producing nuclear weapons usable material.
    Ever since India's Smiling Buddha nuclear weapons test 
almost 35 years ago, its nuclear program has been an enduring 
obstacle to stronger United States-India friendship. So I do 
believe the time has come, for a lot of different reasons, to 
start a new chapter in our relations with a crucial new ally.
    We can't lose sight of one thing, deal or no deal. We can't 
allow this agreement to become a referendum on the future of 
United States-India relations. Not when our interests and our 
ties are more closely aligned than ever before. From ensuring 
no single country dominates Asia, to providing a diplomatic 
partner to strengthening stability and fighting extremism in a 
turbulent region, to developing innovative approaches to a 
planet in peril, India today matters as never before.
    Like any allies, India and the United States will continue 
to have differences, from India's ties with Iran to trade. 
Parts of India's older generation might sometimes advocate 
policies at odds with our own to preserve India's strategic 
autonomy, while some younger members of left-leaning parties 
may remain ideologically at odds with us.
    But make no mistake. India and America will increasingly 
see eye-to-eye on the issues of the 21st century. With or 
without the symbolic centerpiece of a nuclear deal, India 
should be among America's closest friends in the decades ahead. 
And the test for American foreign policy will be to bring our 
governments together to reflect the shared values, shared 
threats, and ever-deepening ties between our two economies and 
countries.
    Now, let me turn, if I may, to those points of 
clarification. Mr. Secretary, section 104(b)(1) of the Hyde Act 
requires the President to certify in terms of the waiver 
authority and congressional approval, and you are familiar with 
it. Fairly detailed, the determination referred to is the 
determination by the President the following actions have 
occurred.
    And it is specifically that they have provided the United 
States and the IAEA with a credible plan to separate civil and 
military nuclear facilities, materials, and programs and has 
filed a declaration regarding its civil facilities with the 
IAEA. You are suggesting that the report submitted by the 
President--that the separation plan actually does that.
    I have that plan here. With respect to Paragraph 14 that 
you referred to, I find it hard on its face to see that it 
actually satisfies the credible plan for the separation. And I 
am concerned that it is going to be important for us to be able 
to gather the consensus here that we have an adequate 
satisfaction that the agreement negotiated conforms to the Hyde 
Act in that respect.
    Secretary Burns. Thank you, Senator. Let me start in trying 
to answer your question, and Dick Stratford may want to add to 
it. It is our judgment, as reflected in the President's 
determination, that the separation plan that, as you said, has 
been presented to the IAEA and the United States----
    Senator Kerry. Can you show me where it appears in here, in 
the document?
    Secretary Burns. Dick, why don't you----
    Senator Kerry. In the communication dated July 25?
    Mr. Stratford. Senator, the separation plan is included in 
the package that was submitted by the President. And if you 
turn to page 97 in the full package, you will be looking at 
paragraph 14 of the separation plan.
    Now I should say that the phase ``declaration'' was not 
used by India until it was written into the safeguards 
agreement that was just approved, but in IAEA parlance, there 
is no such thing as a declaration in the context of a 
safeguards agreement. It is something else.
    When we took a look at the separation plan, what we find is 
that it talks about how it is going to separate its civilian 
and military sides of the program. Now what you want from a 
declaration is what facilities specifically are you going to 
put under safeguards and when. And if you go to 14, you find a 
specific list of the reactors that will go under safeguards and 
when, but it is an outdated list. But they are going to 
maintain the end date.
    In other words, they said all the reactors that would go 
under safeguards would be under safeguards by 2014, and they 
stand by that. If you then continue on through page 98, et 
cetera, what you see is----
    Senator Kerry. Well, let me interrupt you for a minute 
here.
    Mr. Stratford. Sure.
    Senator Kerry. I am following you. But I am not sure many 
people are, and it seems to me that it would be a lot simpler 
just for the President to comply and certify and give us a 
single certification with an up-to-date list that answers the 
question of the credible plan, that we are satisfied that the 
plan is credible. That is what it has to say to us.
    We shouldn't have to look at this and draw it out of you 
through a series of questions. The President, under the Hyde 
Act, is supposed to certify to us that, in fact, this is a 
credible plan and that it is on file with the IAEA. And that is 
the requirement. Why doesn't it do that?
    Mr. Stratford. Because, Senator--because I think, Senator, 
actually what Hyde says is that the President needs to certify 
that India has filed a separation plan and a declaration with 
the IAEA.
    Senator Kerry. Correct.
    Mr. Stratford. What India did in, I think it was July, was 
to take the separation plan, hand it to the director general 
and say what we are going to put under safeguards precisely and 
when is in paragraph 14 of this document, which we already 
submitted to parliament. So this, in effect, would you please 
circulate this?
    So, in our judgment, that portion of the separation plan, 
which they did give to the agency and ask to be circulated, 
serves as the mechanism for----
    Senator Kerry. That may well be, but why then, again, not 
simply have the President certify India has done it, rather 
than using a reference document as the certification? It is 
sort of simplistic. It seems like we are going around in a 
circle here.
    Mr. Stratford. I think we may be using different words for 
the same thing. I think we----
    Senator Kerry. Well, I am not sure because it may be that 
there is an accountability there that comes with one thing, 
which is what the Hyde Act envisions. And if you are leaving it 
to someone else and some other document, you are not taking 
accountability. We put it there for a purpose. We want to know 
that you are certifying it, that it is a credible plan.
    Mr. Stratford. Senator, I----
    Senator Kerry. So I just--let me leave that with you----
    Mr. Stratford. Fine. Fine.
    Senator Kerry [continuing]. For consideration, and let us 
see if we can work that through.
    Let me ask you also, because time is about up, Prime 
Minister Singh has said that India would take on ``the same 
responsibilities and practices as other leading countries with 
advanced nuclear technologies such as the United States.''
    Specifically, India has agreed to identify and separate 
civilian and military nuclear facilities, declare its civilian 
programs to the IAEA, sign an additional protocol for civilian 
facilities, continue its unilateral nuclear test moratorium, 
work with the U.S. to sign the Fissile Material Control 
Technology, refrain from transferring enrichment and reprocess 
technologies, support comprehensive export control legislation, 
and adherence to the Missile Technology Control Regime and NSG 
guidelines.
    Now that is all very comprehensive. It is one of the 
reasons why I think this is stronger than some people may 
think. But I want to make certain that you have sufficient 
confidence that these nonproliferation safeguards are adequate 
and enforceable and accountable.
    Secretary Burns. Yes, sir; we do. And we have worked 
through each of those issues very carefully with the Indians, 
working closely with the IAEA, with the Nuclear Suppliers 
Group. It has taken a long time. It has been a painstaking 
effort, but we agree with you. This is a significant step. It 
doesn't make for a perfect agreement, but it is a significant 
step. And we are confident----
    Senator Kerry. How do you guarantee that it is not just a 
transfer of the saved fuel that now goes off into weapons and, 
therefore, becomes a weapons enhancer?
    Secretary Burns. Well, sir, certainly India, with or 
without this initiative, has the capability to sustain its 
nuclear weapons arsenal. India has made very clear to us 
privately and publicly that it subscribes to the concept of a 
doctrine of a credible minimum deterrent. It has made very 
clear to us that it has no intention or plan of significantly 
increasing its nuclear arsenal.
    What it clearly does have the intention of doing is 
significantly increasing its civilian nuclear capabilities. And 
so, it is our judgment, as John has described before, that by 
taking this step and significantly increasing the proportion of 
reactors and facilities and materials that will be covered by 
IAEA safeguards, that is a fairly important stride. And that it 
will also increase the incentive, in our judgment, for the 
Indians to focus on increasing that civilian nuclear program.
    Senator Kerry. Thank you.
    Mr. Chairman, I want to thank you for the extra time, and 
my colleagues. I appreciate it.
    I will just close by saying that the next President, 
whoever it is, is going to have an enormous opportunity here, I 
think, to build on this relationship in order to take advantage 
of that predisposition not to engage in--and of their past 
history of not expanding.
    But I think there needs to be, and Senator Lugar has worked 
hard on this through the years, a massive new commitment to 
the, you know, the counter proliferation/testing ban/efforts. I 
mean, the nuclear issue has to be much more front and center in 
the next administration.
    Senator Dodd. Thank you, Senator.
    Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    I appreciate your testimony and the work that you all have 
done on this. I do continue along the same lines to be a little 
bit confused about some of the structures that are set up to 
ensure that safeguards are properly in place and there is no 
intermixing.
    Let me ask, what is the advantage, again, and why would we 
go about a phased safeguard approach? I mean, I realize at the 
end of the day, that there's a lot of things that are driving 
this besides non-nuclear proliferation, and sort of, the tail 
is wagging the dog, and we've sort of gotten what we could get, 
here, I understand that.
    But, what is it--why is it to their benefit to do it over a 
phased amount of time?
    Mr. Rood. Senator, the--during the negotiations on the 
separation plan, the Indian Government wanted time to phase out 
the implementation of IAEA safeguards at additional facilities 
in our schedule, to allow them time to prepare, to spread out 
the expense of bringing those additional facilities under 
safeguards over a longer period of time. And it was just a 
means by which they argued to us that they should be permitted 
to implement this in a gradual manner, as opposed to a date 
certain for all facilities, when those would be put.
    Senator Corker. But, big expense in that? I mean, the 
benefits of having these materials seems pretty large. There is 
a large expense in bringing these under proper safeguards?
    Mr. Rood. There's some expense required, only in that you 
need to provide declarations, you need to have people trained 
and have a system in place by which material is accounted for 
in very small quantities and other matters are done.
    We obviously favor this. I don't mean to come across as 
saying this isn't a reasonable thing to ask countries to do, we 
encourage them to do it, and the Indians have safeguards on 
some facilities today, but this was substantially, as I 
mentioned, increase the facilities placed under safeguard. So, 
it's just a phased implementation toward that.
    But there is an incentive, which is, until facilities are 
under safeguards, international cooperation, such as the sale 
of fuel to be used in a reactor, would not be possible. So, 
there is a--the system encourages India to place facilities 
under safeguards, earlier rather than later.
    Senator Corker. Let me read a question, in 2007, the 
Chairman of the Indian Atomic Energy Commission answered the 
question--how will the separation of civilian and nuclear 
facilities from their military counterparts affect the 
organizational structure of the Department of the Atomic 
Energy, by stating, ``The structure remains the same. We are 
identifying specific plants as civilian, and they will be put 
under safeguards. There is no need for any change in the 
organizational structure. This is true in all countries--only 
one government Department looks after the entire atomic energy 
activity.''
    In response to a question posed on April 6, on the same 
subject, Secretary Rice stated, ``While the specific issue of 
the Department of the Atomic Energy personnel has not been 
discussed in detail, we would consider routine, frequent 
rotation of personnel between civil and military programs as 
being inconsistent with Indian commitments on the separation of 
civilian and military facilities. In our view, such a rotation 
would be inconsistent with India's commitment to identify and 
separate civilian and military nuclear facilities and 
programs.''
    We have made this position clear to the Indian Government. 
Since India is likely to continue a permit routine frequent 
rotation of personnel between civilian and military program, is 
India's separation plan credible in this area, and how can we 
work with India to achieve proper separation in that regard?
    Mr. Rood. With regard to India's separation plan, they've--
as I mentioned--identified the facilities and the activities 
associated with those facilities that will, therefore, be under 
IAEA safeguards.
    We do have confidence that the facilities placed under IAEA 
safeguards, that that will be an effective means to prevent 
diversion to a noncivilian purpose.
    With respect to how the Indian Government organizes itself 
in order to implement that, I would note that personnel 
associated with running a particular reactor program or 
particular set of activities, generally are specialists in a 
particular activity. And so, if they work at a safeguarded 
facility that's devoted to a particular purpose, we would 
expect they would continue in that regard. There will be some 
obvious movement of personnel.
    But IAEA safeguards on a particular facility, and those 
that will be applied in India, are the type applied elsewhere 
in the world, we do think are effective as a means to prevent 
diversion.
    In addition to the IAEA safeguards, of course, the 
additional protocol, which is under negotiation, will provide 
additional authorities to the IAEA, and greater ability to 
monitor against diversion.
    Senator Corker. It seems like a pretty difficult thing to 
me, to ensure, and I appreciate your explanation.
    I've got to be two places at once, like we all do, most of 
the time. I want to ask one last question, I have a few minutes 
left, and I might not hear the complete answer, but--you know, 
I'm here constantly looking for consistency in what we do, and 
I am consistently disappointed.
    So, I guess as we look beyond this agreement--and I know 
that all of you have worked very, very hard on this--to 
Pakistan, to Israel, to other folks that we have relationships 
with in this regard, and then folks that we wish not to pursue 
these kinds of activities. How does this, when you step back 
away from the deal at hand, if you will, how does this affect 
us, going forward?
    Secretary Burns. Well, let me take a stab at that, Senator, 
because it's a very good question.
    I think, you know, what has compelled our interest in India 
and driven this effort of the Civil Nuclear Initiative have 
been a number of factors--first, the strategic importance of 
India, but also, the fact that here you have a country whose 
economy is growing very fast, whose energy needs are growing 
very fast, and whose impact on the global environment can be 
enormous, for better or worse. And that creates a kind of 
unique challenge that the expansion of clean, civil nuclear 
energy can help address.
    Finally, I think you have, in the case of India, an 
instance where a country that, for decades has been outside the 
mainstream of the nuclear proliferation regime, has nonetheless 
maintained an admirable record of ensuring that sophisticated 
technology was not seeping away in the direction of other 
countries or other groups.
    And so it's, I think, all three of those factors that we've 
tried to address in this painstaking effort to produce this 
initiative, and also to produce the exception and the nuclear 
suppliers group. And that was an exception that we focused on 
India, not looking to set a precedent for anyone else.
    Senator Corker. I yield the rest of my time. And thank you 
for your testimony.
    Senator Dodd. Thank you, Senator Corker.
    Senator Feingold.
    Senator Feingold. Thank you, Mr. Chairman, this is 
obviously a very important hearing, so thank you for holding 
it.
    And Secretary Burns, I also appreciate your willingness to 
come back to the Senate, after seeing you yesterday on Russia 
and Georgia.
    Good to see you, Secretary Rood and Mr. Stratford.
    When we debated the United States-India Civil Nuclear 
Cooperation Agreement 2 years ago, I noted my concerns that it 
would dramatically shift 30 years of nonproliferation policy. 
Without question, our relationship with India is one of the 
most important in the region, and in the world, and is 
absolutely critical to building a secure, stable, and 
prosperous global system.
    But, I still am concerned that this agreement does not have 
adequate protections to guard against the spread of nuclear 
weapons, and nuclear technology.
    After reviewing this unprecedented deal--including, once 
again, the supporting classified documents, which I recommend 
all of my colleagues take a look at, and after discussing this 
agreement with senior Indian Government officials on a recent 
trip to India--I am still concerned that this deal seriously 
undermines nonproliferation efforts, and could contribute to an 
arms race that would have global implications.
    I think we could have crafted a deal that would have 
benefited our national interests, as well as India's, but if 
Congress approves this deal in its current form, I believe we 
will not have done that.
    In late August, the members of the Nuclear Suppliers Group 
attempted--attempted--to reduce the negative impact of this 
agreement on their ability to prevent the spread of sensitive 
nuclear materials, but the administration succeeded in 
overcoming those efforts.
    Congress now has a choice--approve this deal in its 
current, flawed form, or require the administration to seek 
nonproliferation measures to try to ensure we don't undermine 
the coalitions that we all know we've meticulously put together 
over the last 30 years.
    The proliferation of nuclear technology, know-how and 
material is one of the top national security threats we face. 
While India may share a desire to control the spread of nuclear 
weapons, by undermining international standards this agreement 
may actually contribute to that threat.
    Now, I remain concerned that this agreement could 
indirectly benefit India's nuclear weapons program, and 
potentially contribute to an arms race in the region. Isn't it 
true that, by opening the door to providing nuclear supplies to 
India, we are freeing up local fuel supplies for India's 
weapons program?
    Secretary Burns.
    Secretary Burns. Senator Feingold, as I said before, I 
think we're guided by a couple of different facts.
    First, the Indians have made clear that they intend to 
continue to subscribe to the doctrine of credible minimal 
deterrent. They have made clear that they don't have any 
intention of significantly increasing their nuclear arsenal, 
where they clearly do have an intention is to increase their 
civilian nuclear program. With or without the initiative that 
we've put before you today, that you've so carefully 
considered, the Indians clearly have the ability to sustain 
their nuclear arsenal, and even expand it over time.
    Our judgment is, that by taking this step, we're creating 
an even greater incentive to focus on civil nuclear energy. 
We're vastly increasing the range of facilities and materials 
in India that are covered by IAEA safeguards, and in that 
sense, we're making with the Indians, a positive contribution 
to nonproliferation.
    But there's no perfect answer to your question, because 
there--there does remain an Indian nuclear weapons program, 
there does remain the capacity not only to sustain it, but to 
expand it over time.
    Senator Feingold. I understand your point, and what you 
said about India's intent and India's pledge that any U.S. 
assistance to its civil nuclear energy program will not benefit 
its nuclear weapons program, and it's committed itself, as you 
noted in your testimony, to follow the same practices as 
responsible nations, to follow those practices. But how can we 
be fully assured of any commitment? I mean, India had 
previously claimed it was using nuclear technology for civilian 
purposes, right up until the time it tested in 1974. What kind 
of assurance do we have?
    Secretary Burns. Well, sir, there's no perfect guarantee, 
as you know, but our conviction is that by moving in this 
direction, we're deepening the incentive for India to focus on 
civilian nuclear energy, and deepening its incentive to 
continue to move into the mainstream of the nonproliferation 
regime.
    But, to be honest, and to answer your question, there's not 
perfect guarantee.
    Senator Feingold. Well, I appreciate your candor.
    Secretary Rood, you testified that India has submitted a 
document with the IAEA that satisfies the requirement of the 
Hyde Act that India submit a declaration of its facilities in 
order to ensure that international--international assistance--
does not benefit India's weapons programs.
    Isn't it true, however, that India has negotiated an 
agreement with the IAEA which provides that the final 
declaration will not be submitted until the safeguards 
agreement has entered into force, and this has not yet 
occurred?
    Mr. Rood. The Indian Government, in 2006, published a 
separation plan, that is, a plan to separate its civilian 
facilities from those related to its strategic program. Since 
that time, the Indian Government has negotiated an IAEA 
safeguards agreement, and they have transmitted their 
separation plan to the IAEA Director General, which has then 
been transmitted to the IAEA membership.
    The Indian Government stands behind their separation plan, 
and that plan for the phased application of safeguards is--
constitutes India's indication of how it plans to declare 
facilities as civilian.
    Senator Feingold. But the final declaration has not been 
submitted, is that right?
    Mr. Rood. The separation plan, because it was concluded in 
2006, will need some updating, but the list of facilities, as 
Mr. Stratford mentioned earlier, that will be subjected to 
safeguards, and the phasing remain operative.
    Senator Feingold. Is it your intent to authorize licenses 
pursuant to the United States-India Cooperation Agreement 
before India files the legally required declaration?
    Mr. Rood. IAEA safeguards would need to be in place at a 
facility before we would allow for the export of material from 
the United States to that facility. Therefore, for IAEA 
safeguards to be enforced, the agreement that you reference 
would need to take effect.
    Senator Feingold. So you would not authorize licenses prior 
to that?
    Mr. Rood. Because there would need to be IAEA safeguards in 
effect.
    Senator Feingold. Secretary Rood, does India have a legally 
binding commitment to include all of the facilities it 
announced as civilian in 2006 in the declaration?
    Mr. Rood. Your question was, does India require----
    Senator Feingold. Does India have a legally binding 
commitment to include all of the facilities it announced as 
civilian in March 2006 in the declaration we just discussed?
    Mr. Rood. Do you want to take that?
    Mr. Stratford. Senator, the answer to that would be no.
    The declaration will be made after the safeguards agreement 
comes into force, our understanding is, is that the declaration 
will be the same facilities, in the same timeframe, as was 
included in the separation plan. But, that's not a legally 
binding commitment, and when the safeguards agreement enters 
into force, ultimately, it will be up to India, what it submits 
to safeguards, and when.
    Senator Feingold. And is there a document that you can 
provide to the committee with--in this regard, at this time?
    Mr. Stratford. The document that we would provide would be 
the separation plan, and specifically point you to paragraph 
14, that's included in the President's submission package, but 
we can certainly get you a clean, more readable copy.
    Senator Feingold. All right.
    The provision of enrichment or reprocessing technologies by 
any member of the Nuclear Supplier Group could also directly 
benefit India's nuclear program, as safeguards do not prevent 
the transfer of people and knowledge.
    A recent Washington Post article suggested that the State 
Department gained assurances that none of the members intend to 
do so, however, that wasn't a binding commitment either, was 
it?
    Mr. Rood. Senator, at the Nuclear Supplier's Group meeting 
which concluded on September 6, during those discussions there 
was a substantial amount of discussion with respect to 
enrichment and reprocessing sales. None of the countries that 
were present at that meeting indicated a desire to, or plan to, 
supply those technologies to India.
    Senator Feingold. But it's not a binding commitment, right?
    Mr. Rood. That was a statement of their intentions.
    Senator Feingold. So, it's not a binding commitment?
    Mr. Rood. Yes; that's right.
    Senator Feingold. France has indicated it would consider a 
request to provide reprocessing technologies to India. The only 
way to prevent this is to get an agreement from all the NSG 
members not to provide such technologies.
    Secretary Burns, and Secretary Rood, do any members of the 
NSG oppose banning transfers of enrichment and reprocessing 
technologies to nations like India, that are not members of the 
Nuclear Nonproliferation Treaty?
    Mr. Rood. Yes, would be the answer to your question.
    Senator Feingold. They all--?
    Mr. Rood. You asked, did any members of the nuclear 
suppliers group indicate----
    Senator Feingold. Any oppose----
    Mr. Rood [continuing]. Opposition to the supply of 
enrichment reprocessing technologies to countries that were not 
members of the NPT?
    Senator Feingold. Some do oppose it? The banning?
    Mr. Rood. Yes.
    Senator Feingold. And who are they?
    Mr. Rood. I would prefer to provide that answer to you in 
closed session. The NSG membership rules indicates the 
discussion is supposed to be confidential.
    Senator Feingold. I appreciate that. Thank you, gentlemen, 
thank you, Mr. Chairman.
    Senator Dodd. Thank you very much, Senator.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    In this morning's Washington Post, there was an article, 
``06 Blueprint Leak Intensifies Concerns over U.S./India 
Deal,'' I don't know if you've had a chance to see the article 
yet, but it says, ``In January 2006, an Indian Government 
agency purchased newspaper ads seeking help in building an 
obscure piece of metal machinery. The details of the project 
available to bidders were laid out in a series of drawings that 
jolted nuclear weapons experts who discovered them that spring. 
The blueprints depicted the inner workings of a centrifuge, a 
machine used to enrich uranium for nuclear bombs. In most 
Western countries, such drawings would have been considered 
secret, but the Indian diagrams were available for a nominal 
bidding fee. . . .'' And the person who was able to buy the 
diagrams paid about $10.
    Are we concerned about leakage of nuclear secrets if an 
agreement like this goes through, and what do we do to prevent 
it from happening?
    Mr. Rood. Senator, we've seen the press article that you 
reference, and of course the underlying report from an 
institute called ISIS.
    We obviously take very seriously the subject matter, and 
the examples that were cited. We were aware of these at the 
State Department prior to the publication of that article. I 
would say, the Indian Government has taken significant steps to 
strengthen their export controls since 2005.
    In 2005, you had the enactment of a landmark piece of 
legislation in India, which is a weapons of mass destruction 
law, and the subsequent implementing regulations, and the 
harmonization with the nuclear suppliers group and missile 
technology control regime guidelines are very significant. So, 
we've seen a significant improvement in Indian export controls 
and practices.
    We obviously take very seriously this whole range of 
concerns, and indeed, no export control system is perfect. 
Under my area of the State Department, for instance, the 
political-military bureau enforces compliance with U.S. export 
laws, in part, and there are other agencies of the government 
that do, as well.
    Regrettably, there are American firms which are fined by 
the State Department every year for violations of our export 
control laws. So, while we certainly want to encourage the 
Indian Government, and we believe they are taking greater steps 
to control their export controls, and we take this very 
seriously, there are no perfect systems, including our own.
    Senator Barrasso. In looking at this agreement, I see what 
we're trying to do is increase international nuclear 
cooperation between the United States and India and then deal 
with certain nations that do not want to cooperate on 
nonproliferation objectives. How do you view this whole 
relationship as helping develop increased international 
cooperation?
    Secretary Burns. Well, sir, I think the various steps that 
India has committed itself to, and that it's moving ahead on, I 
think, help on the nonproliferation regime, and in other areas, 
as well. For example, we've talked about the danger of the 
spread of enrichment and reprocessing technology of countries 
who decide that they need to master the fuel cycle, which is a 
huge challenge--not just in Iran in North Korea--but 
potentially other parts of the world.
    Indian's willingness to commit itself to work actively with 
Mohamed ElBaradei and that IAEA on the concept of international 
fuel banks, which Senator Nunn, and others, have worked on over 
the years, I think, is an important step forward and shows an 
Indian willingness to work with us, and work with the IAEA to 
help stop, or fill, one of the major gaps that exists in 
nonproliferation regime today. So, that's just one example.
    Senator Barrasso. Do you also see economic benefits that 
could come as a result of this, and talk about that a little 
bit?
    Secretary Burns. Yes, sir; as I mentioned in my opening 
statement, I mean, there are economic benefits, I think, for 
both India and the United States. For the United States, where 
American firms, I think, are going to be able to compete on a 
level playing field in the civilian nuclear industry, where 
they have a lot to bring to bear, and I think you can see a 
creation if, for example, even two of the new reactor projects 
go to American firms, you'll see the creation of a minimum of 3 
to 5,000 direct jobs in the United States, and 10 to 15,000 
indirect jobs.
    So, I think there's a clear economic benefit there, there's 
an economic benefit for India, there's a huge environmental 
benefit, I think, for all of us. As India's growing energy 
needs get addressed--not by coal and other forms of energy 
which can be deeply dangerous to the environment--but by 
cleaner methods like nuclear energy.
    Senator Barrasso. Well, coming from a coal State, I'll 
agree with you on most of those, but you know we can do coal in 
a cleaner way, as well.
    So, thank you very much.
    Thank you, Mr. Chairman.
    Senator Dodd. Thank you very much, Senator.
    Senator Boxer.
    Senator Boxer. Thank you, Mr. Chairman, I really appreciate 
your holding this hearing. I do miss Joe Biden, but I think 
you're just doing great.
    Senator Dodd. I won't tell Joe.
    Senator Boxer. Well, you can tell him.
    Ambassador Burns, let me see, or Secretary Burns--I like 
this conversation about jobs and the environment. You know, the 
most jobs are through solar--putting solar panels on rooftops. 
And, we're doing it in California--it's safer than nuclear, but 
that's another subject.
    I would ask unanimous consent to place in the record three 
documents.
    Senator Dodd. Without objection.
    Senator Boxer. One is an editorial from the New York Times 
that says, ``A Bad Deal, the nuclear agreement was a bad idea 
from the start. Mr. Bush and his team were so eager for a 
foreign policy success, they gave away the store. They 
extracted no promise from India to stop producing bomb-making 
materials, no promise not to expand the arsenal, and no promise 
not to resume nuclear testing.''
    Now, that's pretty much covers the core issues, but if I 
were writing the editorial, I would have said, ``And no promise 
from India to stop military-to-military exercises with Iran.''
    The second two documents relate to the story that Senator 
Barrasso raised, the article that was in the paper regarding 
the blueprint leak, which is intensifying concerns over the 
United States-India deal--not on your part--but on some of our 
parts.
    And also, the third is the full report by the ISIS, and the 
gentleman who got that document for $10 was David Albright, 
who's a former American U.N. weapons inspector.
    So, I'm going to put those documents in the record, and I 
want to ask some questions, because Mr. Rood, you said, in 
answer to Senator Barrasso's good question that--and I wrote it 
down--that India has tightened up its security since 2005. Are 
you aware that this happened in 2006?
    Mr. Rood. There's been a process since the 2005 passage of 
the WMD export control legislation in India, in which India has 
continued to take steps to improve its export controls over 
that period.
    Senator Boxer. OK, I just want to make sure you knew that.
    Mr. Rood. Yes, ma'am.
    Senator Boxer. That this happened after 2005.
    And then, also, you said, ``Well, we are looking into 
this,'' and so on and so forth. Why is it that Mr. Albright 
said that he shared findings with State Department officials 
but was turned away? ``It didn't fit with their talking points; 
at the highest level, they were dismissive of our concerns,'' 
Albright said.
    Mr. Rood. It's my understanding, Senator, that Mr. Albright 
and some of his colleagues did meet with officials at the State 
Department, it wasn't myself, personally, but there were other 
officials. Their characterization is that they took this 
information seriously that was provided, although as I 
understand it, there was a description of the information, 
there weren't any particular documents at that time provided by 
Mr. Albright and his colleagues.
    Senator Boxer. Well, we do have the documents, and we're 
putting them in the record--the blueprints that were sold for 
$10, and the response from Mr. Albright to the way he was 
treated at the State Department, which I think, is not a good 
thing. And I would say that my colleagues may differ at the end 
of the day on this agreement, but I think all of us have 
expressed some concern in one way or another, about this 
agreement.
    And so, you know, I'm not at all satisfied that you're 
taking this seriously. I know when you're trying to rush 
something through, it's a little annoying to have to listen to 
critics, but I think you're not dealing with any old thing 
here. You're dealing with the capability of a country to build 
more of an arsenal, and it's troubling.
    Mr. Chairman, I don't feel any better about this deal then 
I did when the Senate passed the Hyde Act in 2006, because the 
two amendments that I wanted to see passed, here, of course 
didn't pass. Russ Feingold and I lost, and that's just the way 
it goes. It's, you know, we just couldn't get the votes.
    One of those amendments was to make sure that this extra 
material couldn't be used to build more weapons. We wanted to 
make sure that we had that protection. Without that 
protection--and I think Senator Kerry pointed out that 
everybody is trying to get to this point--we can't be sure.
    India says this and that, and listen, I have the best 
Indian-American community in the country--probably the 
largest--and I adore them, and I hear from them, and they want 
so much for me to be on the side of this agreement. I want our 
relations with India to thrive and prosper. But I also feel 
it's in everybody's interests to make sure we have protections 
in place--including India's, including the people who live 
there, and people all over the world. When you see this 
blueprint, which would be secret in any other Western country 
being printed, and it has to do with building centrifuges, sold 
for ten bucks. It's a little alarming, and nothing that was 
said today gives me a sense that you take it very seriously.
    And then, further, Mr. Rood, your comment like, ``Oh, well, 
companies do this all the time and we don't like it.'' This 
isn't a company--this particular printing was done by the IRE, 
a subentity of India's Department of Atomic Energy. So, it's 
part of the government.
    So, these two issues, Mr. Chairman, are very important. And 
you and I have talked about this. I've been very open--I would 
love to support this agreement with the addition of two 
amendments. The second of these amendments deals with the 
Iranian issue, to which India has responded, ``Oh, how could 
anyone think we would ever have any military cooperation with 
Iran?'' Well, if that's the way they feel, why don't they 
support an amendment that simply says they have to stop the 
military to military contacts? But they won't do it.
    And I don't have to go into the threat of Iran. You know, 
I--it's disconcerting, giving some of the things Ahmadinejad 
has said, some of the things they're doing in Iraq, what 
they're doing in the Middle East, who they're supporting, and 
all the rest.
    So, why not be able to have an amendment to this agreement 
that simply says, ``Stop your military-to-military contacts 
with Iran?''
    Why, Mr. Burns, couldn't we do that?
    Secretary Burns. Well, the first thing I'd say is, I 
absolutely share your sense of alarm about what the Iranians 
are doing in their nuclear program, and Iraq, and other areas--
you're absolutely right, it's a serious threat to all of us.
    Second, the Indian's record on this--and it's something on 
which we've differed from time to time, and that's what 
partners do, because there's an Indian interest in Iranian 
energy supplies, it's the core of their economic relationship, 
they've got a long and complicated history. There are contacts 
from time to time, low-level ones, between their navies, as you 
mentioned.
    On balance, though, I think what you've seen from the 
Indians is a genuine concern about the dangers that are posed 
by the Iranians developing a nuclear weapons program. They 
voted twice in the IAEA Board of Governors, not only to 
criticize the Iranians, but to report their noncompliance with 
the IAEA to the U.N. Security Council, they have scrupulously 
complied with three chapter 7, U.N. Security Council sanctions 
resolutions against Iran.
    So, no, Senator, it's not a perfect record, we don't see 
eye to eye on everything with regard to Iran, but I do think 
you've seen the Indians take steps that demonstrate their 
concern, and their opposition, to the development of a nuclear 
weapons program, a nuclear weapons capability in Iran.
    Senator Boxer. Well, I would ask unanimous consent to place 
into the record, an article from Defense News, March 19th, 
2007, ``India-Iran Form Joint Group to Deepen Defense Ties.''
    Senator Boxer. If you're telling me you believe, and you 
trust, then we should verify. Ronald Reagan used to say, 
''Trust but verify.`` All right? We trust them, yeah. So, 
what's the problem with putting some of these things in 
writing?
    I just hope that since you're trying to rush this through, 
and waive the time requirement that Members of the Senate on 
both sides of the aisle would perhaps put a couple of more 
principles into this agreement, which would make many of us 
feel a lot better. Trust, but verify, and I think we'd all feel 
a lot better.
    Thank you, Mr. Chairman.


    [The articles submitted for the record by Senator Boxer are 
located on page 55 of this hearing print.]


    Senator Dodd. Thank you, Senator, very much.
    Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    First, I would like to say, gentlemen, I have a number of 
concerns, I think you heard--particularly from Senator Corker, 
actually--about trying to find some consistency in foreign 
policy, and neither Senator Corker nor I were here in the 
Senate when these earlier pieces of legislation were voted on.
    I certainly would agree that it's important for us to 
deepen our relationships with India. I wrote a piece in the New 
York Times more than 10 years ago, talking about the best way 
for us to have some counterbalancing to the emergence of China 
in the region, and India, obviously, is one of the two or three 
most important countries.
    And with respect to nuclear power, I would like to see more 
nuclear power plants built in the United States as part of a 
comprehensive energy plan that includes a lot of these other 
issues, I certainly wouldn't have any hesitations about that.
    But looking at this, and trying to sort out, the concerns 
that we've been hearing, for me, it seems to be the 
implications of India not having been a signatory to the 
nuclear nonproliferation agreements. And in effect, I think, 
this agreement potentially affects the way that we communicate 
with other countries around the world about the importance of 
the issue.
    And so my first question would be, why? Why--what is it 
that has led India to refuse to sign this agreement?
    Mr. Rood. Well, the Nuclear Non-proliferation Treaty is, of 
course, a very important treaty, and one that we strongly 
support. But when we talk about the nuclear nonproliferation 
regime, we talk about a number of other elements being used to 
implement that regime, such as IAEA safeguards, and additional 
protocol. We are seeking things like a limitation on enrichment 
and reprocessing technologies that can be used to make the 
material for weapons, the Fissile Material Cutoff Treaty, for 
instance, is another instrument--not strictly speaking the NPT 
would be a separate treaty.
    If you talk about all of those things, while India has 
not--and is, right now their position is they would not sign 
the NPT treaty itself--they have moved forward with an IAEA 
safeguards agreement. They have committed to conclude an 
additional protocol, they have supported various----
    Senator Webb. Yeah; but they have not signed the agreement.
    Mr. Rood. Not the NPT itself, but----
    Senator Webb. What is the justification that they use for 
not signing the agreement.
    Mr. Rood. The NPT, if India were to join, is what is 
defined as a non-nuclear weapons state. Of course, they would 
need to forego their nuclear weapons. India--while it doesn't 
meet the definition on the NPT as a nuclear weapons state, they 
obviously do possess nuclear weapons. So, it's their desire to 
retain the nuclear weapons capability that, of course, would be 
in conflict with the NPT treaty, itself.
    Senator Webb. Do we attach significance to this agreement 
when we are talking to other countries about nonproliferation?
    Mr. Rood. Yes, sir; we do. And we think on the whole is a 
net gain for nonproliferation, that India move greater----
    Senator Webb. No, but when we're talking to other nations. 
We do attach policy significance to the fact that there is this 
agreement, and that it's important for----
    Mr. Rood. The NPT?
    Senator Webb. Right.
    Mr. Rood. Yes, sir; we do attach importance to that.
    Senator Webb. How would you characterize our relationship 
with India. Are they an ally? Mr. Secretary, I've heard you use 
the word ``partner.''
    Secretary Burns. Yeah, I mean, I think like any 
partnership, we don't see eye to eye on every issue, we have 
differences over some issues, but I think there's a growing 
number of issues on which we work together and seek common 
ground, and I guess that's what I'd define ``partner.''
    Senator Webb. If I were to look at their foreign policy 
objectives it--from my understanding--their position is that 
they want to be a centrist nation, and be directly allied with 
no major power. Was that fairly correct?
    Secretary Burns. I think that's right. I mean, India--
what's obvious, I think, just as you mentioned, India's 
emerging as a more and more important player, not just in it's 
own region, but in the world, and as it emerges, I think, the 
areas of potential common ground and potential shared 
responsibility are increasing, too, and that's what we're 
trying to keep our focus on. And that, I think, is the basis 
for an emerging partnership.
    Now, that--again, as you said--is not the same thing as the 
kind of neat alliance in which we agree on every issue.
    Senator Webb. Right.
    Secretary Burns. But I think it suits our interests, I 
think it suits Indian interests, and more broadly, it suits 
global interests.
    Senator Webb. Well, just listening to some of the questions 
and the responses, it would seem to me that there are a lot of 
sovereignty issues that India bring to the table as to why 
they're not doing certain things, because they want to maintain 
independence and international relations. For instance, there's 
a question from Senator Boxer about military-to-military 
relations with Iran--that's a sovereignty issue, and I would 
assume that's one of the reasons that they have taken a 
position on that, or that they have.
    Secretary Burns. I think that's certainly true, Senator.
    Senator Webb. Would you explain the hurry on this? What is 
the urgency here in terms of wanting an agreement in this 
shortened timeframe?
    Secretary Burns. Well, Senator, I'd say two factors, and I 
know it's an extraordinary thing to be asking of the Congress, 
because this is a very important agreement with some serious 
implications, many of which have been discussed today.
    The two factors, I would say, would be first--there's a 
considerable momentum that's been built up, you know, over the 
course of the years and in negotiating this agreement. It's a 
momentum that's been built up with a particular Indian 
leadership which has shown quite remarkable political courage, 
and helping to get both of us to this point.
    And it just seems to us that now is the time to try to take 
advantage of that momentum, lock in this progress, and as both 
of us--as both of our countries face elections and 
transitions--try to lock in that progress and create an even 
stronger foundation for the next administration's in both 
countries to build on.
    The second factor that I'd cite is, really, has more to do 
with commerce. And that is that, even though the Indian 
Government has provided, I think, some very important 
assurances that it wants to create a level playing field for 
American firms, that it does not intend to enter into, or 
conclude, bilateral nuclear cooperation agreements with other 
countries, until the 123 Agreement is finalized--there's still 
a risk in, with the passage of time, that after the NSG 
exception, other countries are going to be able to take 
advantage of this process and do more business in India at the 
expense of our firms.
    So, I'm not citing that as the first reason, but it's an 
important consideration, I think.
    Senator Webb. Thank you. Thank you for your testimony.
    Thank you, Mr. Chairman.
    Senator Dodd. I was going to add, picking up on Senator 
Webb's last question, and correct me if I'm wrong on this, call 
it an ironic twist. But in moving more rapidly on this, putting 
aside the legitimate issues raised about why do we need to move 
rapidly, for those who would seek to modify this agreement, 
ironically, the speed with which we do this allows for 
modifications to occur. That if we would wait until the 
provisions of law prohibit any modifications, in a sense, the 
ability to make some changes that some of us may want to do 
would be prohibited under the law from doing so. It's 
unamendable at that point. Am I understanding that correctly?
    Mr. Rood. Yes, Senator; that is correct.
    Senator Dodd. So, the irony is that actually moving more 
rapidly gives us more of a chance to correct what's sort of 
counterintuitive to what we'd normally associate with time 
being an ally for those who are seeking whatever modifications 
we may seek on this.
    Let me raise a couple of questions, again, if I can. Some 
of this has been touched on, but I want to go back to the U.S. 
approval of storage facilities.
    I know in response to a question--maybe Senator Lugar 
raised the storage issue, and I think, Mr. Rood, your response 
was that none of this can happen without there being IAEA 
approval, or IAEA standards, rather, in storage facilities.
    The Atomic Energy Act requires that the, ``Nuclear 
cooperation agreements contain a guarantee that no fissile 
material the other party obtains or produced, pursuant to this 
agreement, will be stored in any facility that has not been 
approved in advance by the United States.''
    The nuclear nonproliferation assessment Statement submitted 
with the agreement, states that ``Article 7-1 of the agreement 
satisfies this requirement.'' Article 7, subparagraph 1, at 
least it would appear, to me, requires ``only that the storage 
facilities meet the physical protection standards set by the 
IAEA,'' which I believe was your response to the question, at 
least as it was posed, I believe, by Senator Lugar at the time, 
``An Indian storage site will be changed only if India decides 
that the IAEA standards cannot be met at that site.''
    So, the obvious questions are, how do you read section 
123(a)(8) of the Atomic Energy Act, which I've quoted? Does it 
require a guarantee in the agreement that the United States 
would have to give advanced approval of the storage site? How 
does this agreement provide that guarantee? We all agree that 
the IAEA standard is a good one. I'm not arguing with that, in 
any way.
    But it seems to me that what the Atomic Energy Act requires 
a higher standard than just IAEA standards, at least as I read 
them. I'm not drawing the conclusion, but does the agreement 
even provide an inspection mechanism, to ensure that the IAEA 
physical protection standards are met at each storage site, or 
would the United States have to rely upon the information 
provided by India in that regard?
    The Department of Energy, I might add, has an International 
Nuclear Security Program to conduct bilateral assessments of 
civilian nuclear sites to verify that the U.S. nuclear material 
is adequately protected. I wonder if India has agreed to 
conduct such bilateral assessments under this program?
    It's a series of questions there.
    Mr. Stratford. Thank you, Senator.
    What 123(A)(8) requires is that plutonium, and high-
enriched uranium must be stored in a facility that has been 
approved in advance by the United States--that's the concept.
    The reason that is there, is to be sure that weapons-usable 
nuclear materials don't wind up in a facility where they could 
be stolen or taken away by a terrorist. That's the whole 
purpose of that provision.
    So, what we did was to draft a provision that says, ``All 
right, plutonium, uranium-233, and high-enriched uranium may be 
stored in facilities that meet IAEA physical protection 
levels.'' And the way that works is, you write them down on a 
list and you give it to us.
    Now, suppose we don't like something that's on the list, 
and we have some reason to worry about physical protection. 
Then, the article calls for immediate consultations, and 
remedial measures to be taken immediately. So, translated, if I 
think I don't like Facility X for some reason, I can say, ``I 
want to talk to you about it, and oh, by the way, I want more 
guards.'' Under that article, the guards should be provided, 
and then we proceed to work out the details.
    Now, if we don't like the way the details are worked out, 
then the material has to be moved to a different location. Now, 
does this look nonstandard? Yes, it does. But as I recall, a 
very similar mechanism was used by us in the Euratom Agreement, 
but I'd want to check that for the record. In other words, this 
is not something that appeared out of whole cloth.
    Senator Dodd. And so in effect, what you're saying to me as 
I hear you explain this, that would satisfy the language of the 
Atomic Energy Act guarantee.
    Mr. Stratford. I would say that, and so would our lawyers.
    Senator Dodd. Let me go to the second question and this is 
a little more complicated. I'm actually going to read part of 
this, because I want to suggest at the outset, and truth in 
advertising, I'm not sure I could explain this if I didn't read 
it because it gets into the realm of heavy water. And while my 
State has a lot of commercial power plants, I'm not going to 
suggest to you I have a degree in nuclear physics, here.
    The issue I want to raise with you is, are we sure that the 
U.S. agreement with India will not assist India's nuclear 
weapons program? And it goes to the heavy water issue. So, let 
me go through this, and I apologize I'm reading this to you 
rather than extemporaneously trying to explain it, but I think 
it will be clear if I do it this way, and perhaps more brief.
    ``The United States has an obligation under article 1 of 
the Nuclear Non-proliferation Treaty to, `'not, in any way, 
assist any non-nuclear weapons state to manufacture nuclear 
weapons.' '' That's article 1 of that treaty, so I'll use that 
as a backdrop.
    ``Heavy water, water in which hydrogen is replaced by 
deuterium, is used as a moderator in many Indian reactors, 
which are based on the Canadian Candu reactor--India's civilian 
reactors of this type would be devoted to power generation. But 
other Indian reactors of the same type will be designated as 
military, because they can be--and sometimes are--used not just 
for power generation, but also for plutonium production.''
    India allegedly used heavy water from the United States 
when it produced the plutonium for its first nuclear test. Why 
isn't heavy water included in the peaceful use pledge of 
article 9 of the agreement? Would a diversion of heavy water 
violate the agreement? That is one question.
    India listed three heavy water production plants as 
civilian in its separation plant. It added, though, and I quote 
from them, ``We do not consider these plants as relevant for 
safeguards purposes.'' And, indeed, the IAEA does not routinely 
safeguard heavy water production plants.
    What is to keep India from using, for military purposes, 
the heavy water production plants that it says will be 
designated for civilian use in the coming years? That's the 
second question. Given that heavy water from those plants could 
be used in India's military reactors, why did we--as a member 
of the IAEA Board of Governors--not insist on a safeguards 
regime for the heavy water plants, is the third question.
    Now, here's where it gets here into this discussion here of 
physics. I'm told here, now, when heavy water is used as a 
moderator in a nuclear reactor, it absorbs neutrons, and some 
of the deuterium changes to tritium. That gives you tritiated 
water. If you remove the tritium from tritiated water, you can 
use it to boost the yield of a nuclear weapon, or to make a 
more reliable thermonuclear weapon.
    The IAEA doesn't normally worry about that, I'm told, 
because non-nuclear weapon states don't normally have advanced 
nuclear weapon programs that could make good use of tritium.
    India, however, did conduct a test that it said was of a 
thermonuclear weapon. So, the diversion of tritium to military 
uses might warrant prevention through safeguards.
    The last question is why didn't we raise that concern when 
India's safeguards agreement was considered by the IAEA Board 
of Governors?
    I apologize for the complexity of that question.
    Mr. Stratford. It's a complex question. I'm not sure I got 
all of it, but I think I know all of the issues that I can 
respond to it.
    Senator Dodd. I'm not sure I did either, when I read it, 
but----
    [Laughter.]
    Mr. Stratford. A heavy-water moderated reactor could be 
either purely civilian, to produce electricity for the grid----
    Senator Dodd. Right.
    Mr. Stratford [continuing]. And India has a number of 
those----
    Senator Dodd. Right.
    Mr. Stratford. Or, you could use it as a production 
reactor, to produce nuclear material for weapons. If it was not 
a civilian facility that was not under safeguards, you could do 
that.
    Senator Dodd. It would be hard, if not impossible, to do 
the latter if you didn't have the heavy water, is that correct?
    Mr. Stratford. You have to have the heavy water.
    Now, the IAEA will safeguard heavy water if a supplier asks 
it to. So, if we were to send heavy water to India, for use in 
one of those 300-megawatt electrical, heavy water reactors, 
number one, we could do that legitimately, and number two, we 
would ask the IAEA to actually safeguard that heavy water, OK?
    But we don't export large quantities of heavy water, we 
don't have the production capacity anymore, and I don't think 
we use any heavy water except for small amounts for research, 
OK?
    One of the issues is, take a civilian reactor, with heavy 
water in it, that was on the military side, even if it didn't 
produce military material. Then you move it over to the 
civilian side, and the IAEA is safeguarding it. But it is still 
loaded with Indian heavy water on which there are no bilateral 
obligations.
    The safeguards agreement allows India to swap out the heavy 
water, and bring in fresh heavy water. Why would they want to 
do that? Because as heavy water sits in a heavy water reactor, 
the water becomes tritiated, tritium builds up in the heavy 
water. And you eventually have to take it away and detritiate 
it.
    Now, the question is, What happens to the tritium? And can 
it go into military uses. The IAEA does not safeguard tritium, 
at all. So, there is an issue with respect to an Indian 
reactor, which has been placed under safeguards, but is still 
being totally fueled with both fuel and heavy water by India.
    But, what happens if that heavy water--I'm sorry--if that 
reactor goes under safeguards, and we fuel it. If we fuel it, 
then, what our agreement says, is, number one, heavy water is a 
by-product material--I'm sorry, tritium. Tritium is a by-
product material, No. 1. No. 2, by-product material is 
specifically subject to peaceful use guarantees, in article 9, 
and No. 3, if you go to the agreed minute, India has to give us 
an annual accounting of all tritium produced in a reactor where 
our nuclear fuel is in it. So----
    Senator Dodd. Let me interrupt, for one second.
    Mr. Stratford. Sure.
    Senator Dodd. What if Russia provided heavy water?
    Mr. Stratford. That's the next issue. If Russia provided 
heavy water, No. 1, Russia would ask for the heavy water to be 
under safeguards, and then, I'm not sure what would happen 
after that, because I have not seen a Russian agreement for 
cooperation.
    But, as I said, if we supplied to the reactor, the tritium 
issue goes away, because of safeguards and accounting--they owe 
us an accounting.
    What I want to do is go back into the NSG this fall, or 
before that, and say, ``Russia, France, you know what? If we 
fuel a reactor, all of a sudden, that tritium comes under U.S. 
controls.'' Now, I'd like to be sure that you have the same 
controls that I do, in order to take away the tritium issue in 
India. Once, I think, we get to the major suppliers, the ones 
who would supply either reactors or uranium, I think we can fix 
that problem across the board.
    Senator Dodd. Thank you, that is a legitimate concern. Is 
that correct? That's a question.
    Mr. Stratford. Yes; that is a legitimate concern, because 
the IAEA does not safeguard tritium. Therefore, it's up to us 
to figure out how to get controls over tritium. For our 
agreement, we've done it. I'd like to be sure others wind up in 
the same place.
    Senator Dodd. On that last point, I guess I understand what 
you're saying. It was within our ability to ask the IAEA to 
consider this as part of their standards. Have we made such a 
request of the IAEA?
    Mr. Stratford. No, but I have talked to their lawyers about 
it. Their view is, is that if we supply them heavy water, the 
IAEA will put the heavy water under safeguards, and just as if 
we supply them fuel, everything that is derived in that reactor 
is subject to our controls.
    But the IAEA has never been empowered to treat tritium the 
same way it treats fissionable material. So, they simply don't 
apply safeguards to tritium.
    Part of it is because they've never been empowered to do 
it, and part of it, because as a practical matter, it's 
difficult to do. I mean, all of tritium you might get out of an 
entire reactor load of heavy water might fit in a container 
that big. And tritium--this is not the right word--evaporates. 
Twelve years later you have half as much as was in there 
before. So, it's actually difficult to maintain safeguards over 
something that ephemeral.
    Senator Dodd. I thank you for that answer, and I think I've 
understood your answer. It's complicated, and I appreciate it. 
And I apologize again, talking about tritiated water is not in 
my common vocabulary, so I appreciate your response to it.
    I raised the issue a moment ago about storage facilities, 
and let me ask one last question regarding this. Where does it 
say, in these agreements that material must be moved if, in 
fact, we draw the conclusion that a facility is unsafe? It's 
Article 7, Storage and Re-Transfers. And it says, well, I'll 
let you answer the question.
    Mr. Stratford. Thank you, Mr. Chairman.
    Mr. Chairman, what it says is that--starting in the middle 
of that paragraph--if there are grounds to believe that the 
provisions of this sub-article are not being fully complied 
with, that means that I think that the physical protection is 
not good. Immediate consultations may be called for.
    Following upon such consultations, each party shall 
ensure--by means of such consultations, that necessary remedial 
measures are taken immediately. Translated, ``I want more 
guards. Give me more guards.''
    Such measures shall be sufficient to restore the levels of 
physical protection referred to above, at the facility in 
question. OK, I got what I want.
    However, if the party on whose territory the nuclear 
material in question is stored determines that such measures 
are not feasible--translated, ``I can't afford it, no more 
guards''--then it will shift the nuclear material to another 
appropriate, listed facility it identifies.
    Remember, I have already cleared a list where things may 
go. So, if I say, ``I want more guards,'' and they say, ``No, 
you can't have it, it's too expensive,'' then what they have to 
do is go find another facility on the list that I have already 
cleared, and shift it to that facility. That's how it works.
    Senator Dodd. Again, let me apologize--these are very 
artful documents put together, but let me ask the obvious 
question that a layman would have. Is there an end-game at any 
point here? When, despite this, sort of moving things around, 
we're, at some point, not satisfied that the safeguards are 
sufficient enough? Is there anything in here that would allow 
us, then, to insist upon that material being moved, beyond just 
to another site?
    Mr. Stratford. The answer is, yes, because of what I just 
read. It is conceivable, there might be a site where we might 
not be happy about physical protection. But I think it's 
important to remember that India has been using separated 
plutonium for a military program, to some extent, a civilian 
program, for over 30 years. And to the best of my knowledge, 
none of it has ever gone astray, been stolen, et cetera, so 
they know what they're doing when it comes to physical 
protection, and I have every reason to believe that there are 
facilities that we would legitimately let plutonium be stored 
in.
    Senator Dodd. Well, I thank you, and there may be some 
additional questions, and I really do appreciate it very much. 
This is a very complicated, by very important, obviously, as 
witnessed by the member participation.
    And let me end where we began. Thank you, Secretary Burns 
for your willingness to work with us. And I can't speak for the 
other body, I have great respect for Howard Berman, who chairs 
the counterpart committee to this committee in the House of 
Representatives who, I know, has issues with this agreement. 
And I know members here do, as well, as you heard reflected in 
the questions today. And it would be very wise, in my view, to 
leave that door open, here, to determine whether or not some of 
these concerns can be addressed, in the coming--literally--
hours as we're trying to deal with this.
    I know it is certainly Senator Biden's hope, and I hesitate 
to speak for him--but I'm fairly confident here that it's his 
opinion, and mine, as well, that it's in our common interests 
to try to get this done. And that's not to suggest that 
questions have been raised, including ones raised by myself, 
that need some further clarification and modifications. But my 
hope is that we can get this done and move forward quickly.
    And again, the only opportunity to receive any 
modifications is, in fact, this window. Once that window 
closes, for those of us who have some concerns, that option 
becomes foreclosed.
    So, I'm hopeful that we can get that done, I'm very 
grateful to Senator Lugar and other members of the committee 
for their work, and we intend to work very closely with you and 
to try and achieve this goal. It's very important, for all of 
the reasons that I've identified earlier today.
    And again, on behalf of Senator Biden, we clearly 
appreciate the work that's been done.
    I want to thank our staffs, by the way. This is a very 
complicated area, and they've done an excellent job on the 
briefing materials for all of this, as well. We're very 
grateful to you, Secretary Burns.
    The committee will stand adjourned.
    [Whereupon, at 4:50 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


 Prepared Statement of Hon. George V. Voinovich, U.S. Senator From Ohio

    Mr. Chairman, today's hearing on the Agreement Concerning Peaceful 
Uses of Nuclear Energy between the United States and India is an 
important milestone for the U.S.-India strategic partnership and our 
joint commitment toward energy security and energy independence.
    The United States and India have established a strategic 
partnership based upon shared democratic values. We also share vital 
national interests, including victory in the war against violent 
Islamic extremism, halting the proliferation of weapons of mass 
destruction, and a commitment toward regional stability in South and 
Central Asia.
    I have long been an advocate of nuclear power as an environmentally 
friendly means toward achieving energy independence. This agreement 
will help meet India's energy needs, lessen its dependence on imported 
oil--including that from Iran--and strengthen energy security for both 
India and the United States. Nuclear power will bring clean, efficient 
energy to India and reduce air pollution locally, regionally, and 
globally.
    This Agreement will also open up bilateral trade and American 
investment in India's nuclear energy sector for the first time in over 
30 years. The opportunity for U.S. companies is tremendous. According 
to the U.S.-India Business Council (USIBC), nuclear trade with India 
can potentially yield a total commercial opportunity of $126-$158 
billion for American industry. The USIBC estimates commercial nuclear 
trade with India could create up to 277,000 high-tech American jobs.
    Mr. Chairman, I am committed to our continued strategic partnership 
with India. This Agreement will offer major energy, economic, 
environmental, and national security benefits to both our countries. As 
such, I urge the Senate Foreign Relations Committee to report 
favorably--and for the Senate to expeditiously approve--the Agreement 
Concerning Peaceful Uses of Nuclear Energy between the United States 
and India.
    Thank you.
                                 ______
                                 

 Responses of Under Secretary William Burns and Acting Under Secretary 
 John Rood to Questions Submitted for the Record by Senator John Kerry

    Question. Indian Prime Minister Manmohan Singh has said that India 
``would take on the same responsibilities and practices . . . as other 
leading countries with advanced nuclear technology, such as the United 
States.'' Specifically, India has agreed to identify and separate its 
civilian and military nuclear facilities; declare its civilian programs 
to the IAEA; sign an Additional Protocol for its civilian nuclear 
facilities; continue its voluntary nuclear test moratorium; work with 
the United States to sign a Fissile Material Cutoff Treaty; refrain 
from transferring enrichment and reprocess technologies; and support 
comprehensive export control legislation and adherence to the Missile 
Technology Control Regime and the Nuclear Suppliers Group guidelines.

   Do you have sufficient confidence that these 
        nonproliferation safeguards are adequate?

    Answer. Under this Initiative, India remains outside the Nuclear 
Non-Proliferation Treaty (NPT) but assumes important nonproliferation 
responsibilities and obligations, including separating its civil and 
military nuclear facilities and programs, accepting IAEA safeguards at 
its civil nuclear facilities, and signing and implementing an 
Additional Protocol. India has created a robust national export control 
system, including through harmonization with and adherence to the 
Nuclear Suppliers Group (NSG) and the Missile Technology Control Regime 
(MTCR) guidelines and annexes. Additionally, India has pledged to 
continue its unilateral moratorium on nuclear testing and is working 
with the United States to conclude a multilateral Fissile Material 
Cutoff Treaty--a longstanding objective of the international community.
    In joining the Initiative with the United States, India has 
committed itself to uphold the practices of responsible nations with 
advanced nuclear technology. And it has agreed to participate in 
cooperative efforts to deal with the challenge posed by the 
proliferation of weapons of mass destruction and their delivery 
systems.
    Individually, each of these activities helps strengthen the global 
nonproliferation regime. Together, they move India into closer 
conformity with international nonproliferation standards and practices, 
and this development advances U.S. nonproliferation policy and nuclear 
security goals in a way that will make the United States and the world 
safer.
    While these important nonproliferation steps by India establish a 
firm foundation for additional nonproliferation and 
counterproliferation cooperation, civil nuclear supply must still be 
subject to IAEA safeguards, end-use assurances, and scrutiny by all 
suppliers. Accordingly, the U.S. and other potential suppliers to India 
have international, and in many cases domestic, legal and policy 
requirements to ensure that items supplied under their agreements for 
peaceful nuclear cooperation exclusively serve the civil sector.
    The U.S. and other NSG members rely on IAEA inspection and 
monitoring at facilities where IAEA safeguards are being applied, which 
will be the only facilities to which U.S. or internationally supplied 
nuclear technology, equipment, and material will be transferred. The 
IAEA Board of Governors approved a safeguards agreement with India that 
meets standard IAEA safeguards practices and procedures. Once a 
facility is placed on the Annex to the safeguards agreement, that 
facility will continue under safeguards unless India and the IAEA 
``jointly determine'' that the facility is no longer usable for any 
nuclear activity relevant from the point of view of safeguards. 
Moreover, an Additional Protocol will provide for broadened IAEA access 
to facilities and information regarding civil nuclear-related 
activities.
    In addition, there are several ways the U.S. is assured that dual-
use nuclear exports administered by the Department of Commerce are 
going to reliable recipients of U.S. origin items and are not diverted 
to unauthorized end-users or end-uses. As part of the license 
application process we require certification that the nuclear dual-use 
item(s) will not be used in any of the prohibited activities described 
in Sec. 744.2(a) of the Export Administration Regulations (EAR). 
Through the licensing process, the intelligence and enforcement 
communities provide information on the bona fides of prospective end-
users. Commerce determines the bona fides of the transaction and 
suitability of the end-user through the use of prelicense checks. This 
information is then used to make licensing decisions. As part of the 
approval process, export licenses normally have conditions attached 
that prohibit reexport, retransfer, or use in sensitive nuclear, 
chemical, biological, or missile end-uses. We require applicants to 
inform end-users of the licensing conditions. Also, through post-
shipment verifications, the U.S. visits recipients of U.S.-origin items 
to ensure that the items have actually been delivered to the authorized 
ultimate consignee or end-user and that those items are being used as 
stated on the export license application. Licensing decisions are, or 
course, guided by the United States being able to successfully complete 
both prelicense and post-shipment checks.
    As another example, the transfer of nuclear technology requires 
authorization by the Secretary of Energy under section 57(b) of the 
Atomic Energy Act of 1954. The regulations that implement section 
57(b), found in 10 CFR Part 810, contain the conditions for such 
technology transfers, and the Hyde Act elaborates measures that are to 
be taken for such technology transfers to India. In addition, prior to 
approval of an authorization the U.S. Government obtains government-to-
government assurances that transferred technology will not be used for 
any military or nuclear explosive purpose and will not be retransferred 
to another country without the prior consent of the U.S. Government.
    In addition, in January 2004, the Government of India provided the 
United States a letter of assurances in which it affirmed its 
commitment that U.S.-origin equipment, material, software, and 
technology would be used only for peaceful uses, and that such items 
would not be transferred from or through India for use in prohibited 
unsafeguarded nuclear, WMD, or WMD delivery programs.

    Question. Are you satisfied that there is no lingering ambiguity 
about what happens in the event of a nuclear test by India? Are the 
related public commitments made by the Indian Government nonbinding 
political commitments or binding legal commitments?

    Answer. In the event of a nuclear test by India, the Presidential 
determination and waivers under the Hyde Act would cease to be 
effective, and peaceful nuclear cooperation with India would be subject 
to the prohibition in section 129 of the Atomic Energy Act. The 
consequence would be that exports to India pursuant to the 123 
Agreement would be terminated, absent a waiver by the President of 
sections 128 and 129 of the Atomic Energy Act. The waiver standard 
under these provisions is that the failure to approve an export 
(section 128) or the cessation of exports (section 129) ``would be 
seriously prejudicial to the achievement of United States 
nonproliferation objectives or otherwise jeopardize the common defense 
and security.'' A waiver by the President would be subject to 
congressional review for 60 days of continuous session. Under the 123 
Agreement, the United States would also have the right under article 14 
to terminate the agreement, as well as the right to cease cooperation 
immediately if it determined that India had taken actions that 
constituted grounds for such cessation and that a resolution of the 
problem created by India's actions could not be achieved through 
consultations. In short, there is no ambiguity about the operation of 
U.S. law and the rights of the parties under the relevant provisions of 
the treaty in the circumstances described.
    In addition, the United States has made clear, at senior levels as 
well as in the negotiations, that ``the deal would be off'' if India 
did not maintain the moratorium on nuclear testing that it committed to 
continue in the Bush-Singh Joint Statement of July 18, 2005. There has 
been no ambiguity in the U.S. position on this issue, and the 
Government of India has indicated that it understands that these would 
be the consequences. There has been some confusion in the Government of 
India (and in the press) regarding the legal status of the U.S. fuel 
supply assurances. There is a broad misperception in India that our 
reaffirming clearly the political nature of our fuel assurances in the 
President's Transmittal Letter was in fact an attempt to diminish their 
reliability. We continue to discuss the distinction with the Government 
of India, but as Under Secretary Burns made clear in his testimony ``we 
are determined to meet (our fuel assurance) commitments to the fullest 
extent consistent with U.S. law.'' We are also confident in the U.S. 
legal position and in the provisions of the 123 Agreement as a basis 
for implementing U.S. law in the event of a test by India.
    This question also raises the issue whether ``related public 
commitments made by the Indian Government'' are political commitments 
or legally binding commitments. As noted above, in the Bush-Singh Joint 
Statement of July 18, 2005, India undertook to continue its moratorium 
on nuclear testing. As with the other commitments in the Joint 
Statement, this undertaking was a political commitment. India retains 
the sovereign right to conduct a nuclear test. Likewise, the U.S. 
retains the right to react to such a test in accordance with U.S. law 
and policy and the Government of India has indicated that it 
understands these would be the consequences.

    Question. Section 104(b)(1) of the Hyde Act requires the President 
to certify that ``India has provided the United States and the IAEA 
with a credible plan to separate civil and military nuclear facilities, 
materials, and programs, and has filed a declaration regarding its 
civil facilities . . . with the IAEA.'' The report submitted by the 
President pursuant to the Hyde Act says that paragraph 14 in the 
separation plan actually constitutes the declaration. Do you think that 
is consistent with the letter and the intent of the Hyde Act?

    Answer. We think it is consistent with the letter and intent of the 
Hyde Act. As noted in our report pursuant to the section 104(c) of the 
Hyde Act, paragraph 14 of India's Separation Plan describes the 
``civil'' elements of India's nuclear program, specifically naming the 
14 reactors that will be declared ``civil'' and establishing a 
timetable for placing them under safeguards, as well as describing the 
treatment of other types of facilities (breeder reactors, research 
reactors, upstream facilities, downstream facilities, and research 
facilities). The Separation Plan was transmitted on July 25, 2008, by 
the Government of India to the Director General of the IAEA to be 
distributed ``to all Member-States of the Agency'' (and the IAEA 
circulated the Separation Plan to Members as IAEA document INFCIRC/
731). In a speech to the Indian Parliament on August 17, 2006, the 
Prime Minister confirmed that the ``civil'' facilities designated in 
the Separation Plan would be submitted to safeguards in a phased 
manner. He made similar statements to the Indian Parliament on August 
13, 2007, after negotiations were completed on the 123 Agreement. 
Introducing the India-IAEA Safeguards Agreement, the Director General 
of the IAEA specifically referred to the significance of the recently 
circulated Separation Plan, noting that it described the facilities 
expected to come under safeguards by 2014. In short, the information 
contained in paragraph 14 of the Separation Plan provided the U.S. and 
the IAEA with the necessary information regarding the intended scope of 
India's civil facilities, and it was treated as authoritative by the 
Government of India. For this reason, the President made the 
determination required by section 104(b)(1) of the Hyde Act.

    Question. Do you believe the agreement the administration 
negotiated otherwise conforms to the Hyde Act?

    Answer. Yes. The proposed agreement for nuclear cooperation between 
the United States and India is fully consistent both with the Hyde Act 
and the Atomic Energy Act of 1954. The President has made the seven-
part determination required by the Hyde Act (Presidential Determination 
2008-26).

    Question. How do you respond to concerns that this agreement will 
allow India to divert uranium that would otherwise be required for 
power generation to its nuclear weapons program, contributing to a 
regional arms race?

    Answer. The Agreement is not about India's nuclear weapons 
production. Its purpose is to ensure that nuclear items, equipment, and 
technology transferred to India are used exclusively for peaceful 
purposes. With or without this Initiative, India is capable of 
maintaining its existing nuclear arsenal. It has a functioning fuel 
cycle and demonstrated competence with nuclear technologies.
    India has stated consistently that it seeks to maintain what it 
calls a ``credible minimum deterrent.'' Relative to its current 
capabilities, India seeks a much larger civil nuclear energy program to 
meet its real and growing energy needs. Moreover, a successfully 
implemented Civil Nuclear Cooperation Initiative adds considerable 
incentives to grow its civil nuclear energy sector, since international 
cooperation will be allowed only with safeguarded facilities.
    We do not believe that enhanced cooperation with India in the civil 
nuclear area or greater use of nuclear reactors to produce energy for 
the Indian people will contribute to or accelerate a regional arms 
race. Any potential for an Indo-Pakistani or Sino-Indian arms 
competition will be determined mainly by their respective bilateral 
relations, rather than by civil nuclear cooperation with India. Indeed, 
by bringing 64 percent of India's existing and planned thermal power 
reactors (14 out of 22) as well as associated upstream and downstream 
facilities and nine additional research facilities under safeguards in 
perpetuity and increasing transparency, the Initiative in effect 
restricts certain Indian facilities to only producing civil energy--
facilities that could otherwise be used for nuclear weapons-related 
purposes.
    It is U.S. policy to discourage the spread of nuclear weapons 
technology, and we continue to press for strategic restraint in South 
Asia. We continue our diplomatic efforts with both India and Pakistan 
in that regard.

    Question. Some experts contend that a selective approach to 
nonproliferation creates a double-standard that makes it more difficult 
to rally the international community against the likes of Iran and 
North Korea. Is there not some merit to this view?

    Answer. There is no reason to believe, and we have seen no 
indication, that this Initiative with India will encourage the 
international community to view Iran's or North Korea's noncompliance 
more leniently. Iran's pursuit of a nuclear weapons capability is a 
national security concern to the United States and to many of its 
international partners. Our partners understand the important 
differences between India and Iran or North Korea and the reasons for 
treating these countries differently. This is why IAEA Director General 
ElBaradei, as well as states including France, the United Kingdom, 
Russia, and other partners in the effort to prevent Iran from acquiring 
nuclear weapons or to roll back North Korea's nuclear program have 
welcomed the Initiative with India.
                                 ______
                                 

 Responses of Under Secretary William Burns and Acting Under Secretary 
 John Rood to Questions Submitted for the Record by Senator Robert P. 
                               Casey, Jr

         initial u.s./india proposal for a ``clean'' nsg waiver
    The Nuclear Suppliers Group (NSG) met in an extraordinary plenary 
session on August 21-22, 2008, to consider a country-specific exemption 
to permit its members to engage in civilian nuclear trade with India. 
However, any future U.S. civilian nuclear trade with India will be 
strictly governed by the criteria established in the Hyde Act. The Hyde 
Act establishes various restrictions on the type of trade the United 
States can conduct with India, including the provision of fuel supplies 
in a manner commensurate with ordinary reactor operating requirements. 
It also lays out the consequences for future civilian nuclear trade 
with New Delhi were India to conduct a nuclear weapons test.

    Question 1a. Please explain why the United States, in coordination 
with India, submitted an initial proposal at the August NSG plenary 
session requesting that the exemption be as ``clean'' as possible and 
contain minimal conditions and restrictions on civilian nuclear trade 
with India.

    Answer. The U.S. approach was always to seek an NSG exception that 
was fully consistent with the Hyde Act and did not add conditions that 
the Indian Government could not accept. The U.S.-drafted exception 
text, circulated by the German NSG Chair on August 7, 2008, in advance 
of the August Extraordinary Plenary, was consistent with this approach.
    Similarly, the revised U.S.-drafted text for the September 4-6 
Extraordinary Plenary strove to accommodate as many of the amendments 
proposed during the August Plenary as possible in a way that was 
consistent with the Hyde Act and with bringing the Initiative to 
fruition. After intensive discussions, the NSG reached consensus on 
September 6 to allow for civil nuclear cooperation with India.
    Like the Hyde Act, the NSG statement incorporates the Indian 
nonproliferation commitments made in the July 2005 Joint Statement 
between President Bush and Prime Minister Singh. In fact, the NSG 
explicitly granted the exception based on these commitments and actions 
by India.

    Question 1b. Why did the United States not seek to incorporate the 
specific restrictions and conditions detailed in the Hyde Act into the 
NSG exemption permitting civilian nuclear trade with India, so that all 
other NSG members would be explicitly bound by the same restrictions 
that U.S. suppliers face?

    Answer. The U.S. sought an NSG exception for India that was 
consistent with the Hyde Act and, at the same time, capable of 
commanding a consensus within the Group. While the Hyde Act does not 
require incorporation of its specific terms and restrictions in the NSG 
exception, we pursued the NSG exception with an eye to the Hyde Act 
both as a matter of nonproliferation policy and so as to protect U.S. 
industry from any competitive disadvantage. The result is an NSG 
exception that is consistent with the Hyde Act, taking into account of 
the terms and restrictions of the Hyde Act.

    Question 1c. Will U.S. companies be disadvantaged when competing 
for business with India's civilian nuclear industry because it will be 
operating under specific conditions and restrictions governing nuclear 
trade that do not apply to the other NSG suppliers?

    Answer. We have not seen the peaceful nuclear cooperation 
agreements being negotiated by other nuclear suppliers with India and 
thus do not know whether these agreements contain provisions similar to 
those in the U.S.-India 123 Agreement. Nevertheless, we do not believe 
that U.S. companies will be disadvantaged compared to other suppliers.
    As mentioned in the answer to Question 1b above, while the Hyde Act 
does not require incorporation of its specific terms and restrictions 
in the NSG exception, we pursued the NSG exception with an eye to the 
Hyde Act both as a matter of nonproliferation policy and so as to 
protect U.S. industry from any competitive disadvantage.
     progress towards completion of india-iaea additional protocol
    Question 2. A Presidential Determination issued on September 10, 
2008, was included in the package formally submitted to the Congress, 
consistent with the requirements outlined under the Hyde Act for 
expedited approval of the U.S.-India Article 123 agreement on civil 
nuclear cooperation. This determination included the following 
statement, addressing a specific requirement of the Hyde Act with 
respect to final approval of a U.S.-India Article 123 civilian nuclear 
cooperation agreement:

        India and the IAEA are making substantial progress toward 
        concluding an Additional Protocol consistent with IAEA 
        principles, practices, and policies that would apply to India's 
        civil nuclear program;

    Please provide the basis for this statement, including specific 
evidence that the Indian Government and the IAEA Secretariat have 
exchanged the type of texts and proposals that would signify 
``substantial progress'' toward concluding an Additional Protocol.

    Answer. Indian External Affairs Minister Pranab Mukherjee noted in 
his statement on September 5, 2008, that India was ``working closely 
with the IAEA to ensure early conclusion of an Additional Protocol to 
the Safeguards Agreement.''
    Indian officials have conveyed a letter to IAEA counterparts 
outlining the contours of a proposed Protocol. At the time of the 
President's determination, the IAEA was reviewing India's proposal and 
substantive discussions between India and the IAEA had been held. The 
details included in this letter as well as substantive discussions 
between Indian officials and the IAEA prompted IAEA Director General 
Mohamed ElBaradei to inform us on September 10, 2008, of his conclusion 
that the IAEA and India are making substantial progress toward 
concluding an Additional Protocol consistent with IAEA principles, 
practices, and policies that would apply to India's civil nuclear 
program. As we are not a party to this negotiation, we have not seen 
the text of the Indian paper. We were assured however by Director 
General ElBaradei's assessment of the state of progress, as well as by 
the continued commitment of both parties to this effort.
    Since the President's determination, Indian and IAEA officials have 
held another round of talks on the Indian paper (September 17, 2008). 
We look forward to conclusion of this Additional Protocol at an early 
date.
          bringing india into the nonproliferation mainstream?
    Ever since the initial Joint Statement between the United States 
and India was signed in July 2005 by President Bush and Prime Minister 
Singh, administration officials have contended that the agreement to 
resume civilian nuclear trade brings significant nonproliferation 
benefits. In his prepared statement for today's hearing, Acting Under 
Secretary of State Rood asserts,

          Regarding India's May 2006 Separation Plan, we believe its 
        implementation will produce a significant nonproliferation 
        gain. Once implemented, the percentage of India's total 
        installed nuclear power capacity under IAEA safeguards will 
        increase from 19 percent today to 65 percent by 2014. A further 
        increase up to 80 percent is possible if India expands its 
        civil nuclear infrastructure through foreign supply and 
        indigenous development as it currently plans.
          The nonproliferation implications of placing such facilities 
        under IAEA safeguards are clear. Every existing or new facility 
        placed under safeguards will be designated as a civilian 
        facility and will not be available to potentially contribute to 
        India's nuclear weapons program. Furthermore, the Civil Nuclear 
        Cooperation Initiative creates an incentive for India to 
        declare as many facilities as possible as ``civil'' in order to 
        enjoy the benefits of international cooperation.

    Question 3a. The primary purpose of IAEA safeguards is to ensure 
that a state does not use civilian nuclear facilities to produce 
fissile materials for the purposes of a nuclear weapons program. India 
is a de facto nuclear weapons state today, and will remain so once the 
U.S.-India civil nuclear cooperation agreement enters into force.
    What nonproliferation purpose is served by placing under IAEA 
safeguards those nuclear facilities designated for civilian energy 
production when nonsafeguarded plants will continue to produce fissile 
material for India's nuclear weapons program?

    Answer. Under this Initiative, India submitted to the IAEA its plan 
to separate its civil and military facilities, in which 14 reactors, 
including the 4 presently safeguarded reactors, and other facilities 
would be offered for safeguards. By bringing 64 percent of India's 
existing and planned thermal power reactors (14 out of 22) as well as 
associated upstream and downstream facilities and nine additional 
research facilities under safeguards in perpetuity and increasing 
transparency, the Initiative in effect restricts certain Indian 
facilities to only producing civil energy--facilities that could 
otherwise be used for nuclear-weapons-related purposes. Without this 
Initiative, India could use all of its current and planned 
unsafeguarded reactors for military purposes. With this Initiative, 8 
of the 22 thermal power reactors are left on the military side of the 
separation plan.
    India has stated consistently that it seeks to maintain what it 
calls a ``credible minimum deterrent.'' Relative to its current 
capabilities, India does, however, seek a much larger civil nuclear 
energy program to meet its real and growing energy needs. Moreover, a 
successfully implemented Civil Nuclear Cooperation Initiative adds 
considerable incentives to restrict growth to its civil nuclear energy 
sector, since international cooperation will be allowed only with 
safeguarded facilities.

    Question 3b. Has the IAEA produced a budgetary estimate on the 
impact of additional inspections on its already constrained operating 
expenses? How does the IAEA expect to pay for these additional 
expenses? Will the annual contribution of the United States to the IAEA 
rise accordingly?

    Answer. The IAEA estimated a cost for India safeguards of about 
euro 1.2 million in its 2009 budget; however it indicated that this 
would be offset by savings in other parts of the budget. The IAEA 
expects to pay for safeguards for India out of its regular budget, of 
which the U.S. share is approximately 25 percent. While we expect there 
will be some impact of India safeguards on the IAEA's budget, the 
overall budget is determined by Member States, and not easily 
predictable. In the recent past, some increases in safeguards 
activities have been offset by efficiencies in the application of 
safeguards, for example.
            indian civilian nuclear trade with nsg members 
                      other than the united states
    Press reports indicate that the Indian Government has provided an 
oral assurance to senior U.S. officials that, regardless of the 
exemption authorized by the NSG, India will not commence civilian 
nuclear trade with any NSG member until the Congress approves the 
Article 123 agreement, thereby authorizing U.S. civilian nuclear trade 
with India in a manner consistent with the NSG exemption and the terms 
of the Hyde Act.

    Question 4a. Please describe the nature of this assurance in 
greater detail. Did the Indian Government place an expiration date on 
this assurance, e.g., the Indian Government pledged to not enter into 
contracts with other NSG members until the Congress provided approval, 
but only for a certain period of time?

    Answer. Indian Foreign Minister Mukherjee commented publicly on 
September 8, 2008, that the Indian Government intends to wait until the 
U.S. Congress acts before India enters into bilateral cooperation 
agreements with other countries. This assurance reflected the Foreign 
Minister's understanding that the United States, having worked to 
secure an NSG exception for India, was concerned that U.S. companies 
not be at a competitive disadvantage compared to their international 
counterparts.
    Further to this issue, the spokesperson of the Indian Ministry of 
External Affairs, which Mr. Mukherjee oversees, issued a formal 
statement on September 11, 2008, stating that the Indian Government is 
``taking steps to realize commercial cooperation with foreign partners 
in this field. We have informed the USA about our intent to source 
state of the art nuclear technologies and facilities based on the 
provisions of the 123 Agreement from the U.S. [The Indian] Government 
is also moving toward finalizing bilateral agreements with other 
friendly partner countries such as France and Russia. While actual 
cooperation will commence after bilateral agreements like the 123 
Agreement come into force, the Nuclear Power Corporation of India has 
already commenced a preliminary dialogue with U.S. companies in this 
regard.''
    The assurances of Foreign Minister Mukherjee are helpful, but with 
aggressive competition and bilateral agreements already in train 
between India and other countries, U.S. companies are eager to enter 
the market and compete without delay. Swift approval of the U.S.-India 
Peaceful Nuclear Cooperation Agreement will give U.S. companies access 
to this lucrative and growing civil nuclear energy market, estimated to 
be worth billions of dollars.

    Question 4b. An Indian Foreign Ministry spokesman was quoted last 
week as saying, ``Following the NSG statement which enables civil 
nuclear cooperation by NSG members with India, the government is taking 
steps to realize commercial cooperation with foreign partners.'' 
(Agence France-Press) This week, an Indian official was quoted 
anonymously as asserting, ``Though India has put its agreements with 
other countries on nuclear cooperation on hold, it cannot be seen as an 
open-ended wait, the onus is now squarely on the U.S. to ensure the 123 
Agreement runs through the U.S. Congress and is ready for signature at 
the earliest.'' (Indo-Asian News Service)
    How does the Indian pledge to refrain from civilian nuclear trade 
until the Congress acts accord with these reports that India has 
already moved to initiate contract discussions with NSG members in the 
wake of the group's approval of an exemption and may not wait 
indefinitely for the approval of the Congress?

    Answer. As stated in response to Question 4a above, the 
spokesperson of the Indian Ministry of External Affairs issued a formal 
statement on September 11, 2008, stating that the Indian Government is 
``taking steps to realize commercial cooperation with foreign partners 
in this field. We have informed the USA about our intent to source 
state-of-the-art nuclear technologies and facilities based on the 
provisions of the 123 Agreement from the U.S. [The Indian] Government 
is also moving toward finalizing bilateral agreements with other 
friendly partner countries such as France and Russia. While actual 
cooperation will commence after bilateral agreements like the 123 
Agreement come into force, the Nuclear Power Corporation of India has 
already commenced a preliminary dialogue with U.S. companies in this 
regard.''
    We have worked closely with India on all aspects of the Civil 
Nuclear Cooperation Initiative, including upcoming U.S. participation 
in the Indian civil nuclear market and securing a strong Letter of 
Intent stating India's intention to set aside at least two reactor 
sites with a minimum of 10,000 MWe generating capacity for U.S. firms.
    The Indian Government's commitment to wait until the U.S. Congress 
acts before India signs cooperation agreements with other countries was 
made by Indian Foreign Minister Pranab Mukherjee on September 8. We 
welcome this senior-level assurance, but also recognize that with the 
Nuclear Suppliers Group decision to permit civil nuclear trade with 
India, our competitors are eager to enter the Indian energy market. 
Also, given India's enormous demand for energy, which helped prompt 
this Initiative, the Indian Government is understandably anxious to 
begin trade.
    We have an unprecedented and historic opportunity before us. 
Together we can ensure that the United States and India complete the 
journey that we began together 3 years ago, and ensure that U.S. 
industry--just like its international counterparts--is able to engage 
with India on civil nuclear trade.

    Question 4c. The September 10, 2008, letter from Indian Foreign 
Minister S. Menon to Under Secretary of State William Burns states, 
``it is the intention of the Indian Government to take all steps to 
adhere to the Convention on Supplementary Compensation for Nuclear 
Damage prior to the commencement of international civil nuclear 
cooperation under the Agreement.''
    Does that mean that India has pledged to hold off on all civil 
nuclear trade with all NSG members, as authorized by the NSG exemption, 
until this Convention enters into force for India?

    Answer. India has pledged to take the steps necessary to adhere to 
the Convention on Supplementary Compensation for Nuclear Damage (CSC), 
and we expect it to do so soon. This senior-level Indian commitment to 
become a party to this international liability regime as soon as 
possible is an important step in ensuring that U.S. nuclear firms can 
compete on a level playing field with other international competitors 
who have other liability protections afforded to them by their 
governments. Because of these differing circumstances, Indian 
ratification of the CSC has not been a determining issue for nuclear 
industries in a number of other countries. It is also worth noting that 
the CSC still has not entered into force and, even with India's 
ratification, will not do so until the 90th day following the date on 
which at least five States with a minimum of 400,000 units of 
``installed nuclear capacity'' have ratified the Convention.
                                 ______
                                 

       Material Submitted for the Record by Senator Barbara Boxer

                [From the New York Times, Sept. 9, 2008]

                               A Bad Deal

    President Bush has failed to achieve so many of his foreign policy 
goals, but last weekend he proved that he can still get what he really 
wants. The administration bullied and wheedled international approval 
of the President's ill-conceived nuclear deal with India.
    The decision by the 45-nation Nuclear Suppliers Group (which sets 
rules for nuclear trade) means that for the first time in more than 30 
years--since New Delhi used its civilian nuclear program to produce a 
bomb--the world can sell nuclear fuel and technology to India.
    Mr. Bush and his aides argued that India is an important democracy 
and dismissed warnings that breaking the rules would make it even 
harder to pressure Iran and others to abandon their nuclear ambitions.
    The White House will now try to wheedle and bully Congress to 
quickly sign off on the deal. Congress should resist that pressure.
    The nuclear agreement was a bad idea from the start. Mr. Bush and 
his team were so eager for a foreign policy success that they gave away 
the store. They extracted no promise from India to stop producing bomb-
making material. No promise not to expand its arsenal. And no promise 
not to resume nuclear testing.
    The administration--and India's high-priced lobbyists--managed to 
persuade Congress in 2006 to give its preliminary approval. But 
Congress insisted on a few important conditions, including a halt to 
all nuclear trade if India tests another weapon.
    That didn't stop the White House from insisting on more generous 
terms from the suppliers' group. When New Zealand and a group of other 
sensible countries tried to impose similar restrictions, the 
administration pulled out all of the diplomatic stops. (Officials 
proudly reported that Secretary of State Condoleezza Rice made
at least two dozen calls to governments around the world to press for 
the India waiver.)
    The suppliers' group gave its approval after India said it would 
abide by a voluntary moratorium on testing--but it does not require any 
member to cut off trade if India breaks that pledge.
    That means that if India tests a nuclear weapon, it could still 
bypass American suppliers and keep buying fuel and technology from 
other less exacting sellers. Let us be clear about this. It is the 
administration that disadvantaged American companies when it argued for 
more lenient rules from the suppliers group than those written into 
American law.
    And let us also be clear that Congress's restrictions were a 
sensible effort to limit the damage from this damaging deal and 
maintain a few shreds of American credibility when it comes to 
restraining the spread of nuclear weapons.
    Lawmakers should hold off considering the deal at least until the 
new Congress takes office in January. And they must insist that at a 
minimum, the restrictions already written into American law are 
strictly adhered to.
    The next President will have to do a far better job containing the 
world's growing nuclear appetites. And for that, he will need all of 
the moral authority and leverage he can muster.
                                 ______
                                 

               [From the Washington Post, Sept. 18, 2008]

      '06 Blueprint Leak Intensifies Concerns Over U.S.-India Deal

                           (By Joby Warrick)

    In January 2006, an Indian government agency purchased newspaper 
ads seeking help in building an obscure piece of metal machinery. The 
details of the project, available to bidders, were laid out in a series 
of drawings that jolted nuclear weapons experts who discovered them 
that spring.
    The blueprints depicted the inner workings of a centrifuge, a 
machine used to enrich uranium for nuclear bombs. In most Western 
countries, such drawings would be considered secret, but the Indian 
diagrams were available for a nominal bidding fee, said David Albright, 
a former U.N. weapons inspector. He said he acquired the drawings to 
prove a point.
    ``We got them for about $10,'' said Albright, who called the 
incident a ``serious leak of sensitive nuclear information.''
    India has since tightened its bidding procedures, but the incident 
has fueled concerns among opponents of a U.S.-Indian civilian nuclear 
deal that Congress is expected to consider in the coming weeks.
    The accord, first announced in 2005 by the Bush administration, 
would lift a decades-old moratorium on nuclear trade with India, 
allowing U.S. companies to share sensitive technology despite that 
country's refusal to ban nuclear testing or sign the nuclear Non-
Proliferation Treaty. Backers of the deal say it will cement U.S. ties 
with India and reward a country that has been a responsible steward of 
nuclear technology since it first joined the nuclear weapons club in 
1974.
    But opponents say India's record on nonproliferation is not as 
unblemished as is claimed by the White House, which regards the nuclear 
pact as one of the foreign-policy highlights of the Bush 
administration's second term. Critics, including former U.S. diplomats, 
military officers and arms-control officials, accuse the White House of 
rushing the agreement through Congress without considering the long-
term implications.
    ``This deal significantly weakens U.S. and international 
security,'' said retired Army Lt. Gen. Robert G. Gard, Jr., chairman of 
the Washington-based Center for Arms Control and Non-Proliferation. 
Yesterday, a group of 34 arms-control advocates and former government 
officials urged Congress to reject the deal in its current form.
    Administration officials have repeatedly lauded India's efforts to 
prevent the spread of nuclear technology, contrasting its behavior with 
that of Pakistan, the home base of Abdul Qadeer Khan, the acknowledged 
nuclear smuggler who delivered weapons secrets to Libya, Iran and North 
Korea.
    R. Nicholas Burns, the former Under Secretary of State for 
Political Affairs and a chief supporter of the landmark accord, said in 
a recent forum that India was ``playing by the rules of the [nuclear] 
club but not allowed to join the club.'' Burns said the agreement 
``strengthened the international nonproliferation regime because it 
resolves an inherent contradiction in the regime.''
    Likewise, India's government says it deserves the trust of the 
world's nuclear gatekeepers. ``India has an impeccable nonproliferation 
record,'' External Affairs Minister Pranab Mukherjee said last week. 
``We have in place an effective and comprehensive system of national 
export controls.''
    Opponents point to what they call decades of deceptive practices 
India has used to acquire nuclear materials from foreign governments. A 
draft report by Albright and his Institute for Science and 
International Security, a Washington-based nonprofit that monitors the 
spread of weapons technology, cites recent incidents in which it says 
India engaged in ``illicit nuclear trade.''
    In an instance alleged by ISIS, India used an array of trading 
companies to secretly acquire tons of tributyl phosphate, a chemical 
used to separate plutonium from spent nuclear fuel. China, a longtime 
supplier of TBP to India, halted shipments of the chemical in 2003 
after U.S. criticism. India turned to independent trading firms that 
acquired TBP from German and Russian companies without revealing the 
true destination, the report said.
    The ISIS report, due for release today, included photocopies of 
some of the centrifuge drawings obtained by Albright, although the 
group removed key specifications. Albright said he shared his findings 
with State Department officials but was turned away.
    ``It didn't fit with their talking points,'' Albright said. ``At 
the highest level, they were dismissive of our concerns.''
    A State Department spokesman declined to comment on Albright's 
report, saying it had not been reviewed, and said the agreement was in 
the U.S. interest.
    Other opponents have cited transfers of sensitive weapons 
technology by individual Indian scientists. In 2004, the State 
Department slapped sanctions on two Indian nuclear scientists alleged 
to have passed heavy-water technology to Iran. At least four Indian 
companies have been sanctioned over sales of missile technology to 
Tehran.
    Such incidents underscore concerns about the possible transfer of 
India's expanded nuclear know-how by rogue scientists and businessmen, 
said Henry Sokolski, the Defense Department's top nonproliferation 
official in the George H.W. Bush administration.
    As trade grows between India and Iran, so does the risk of 
``transfers of technology that could be useful for Iran's purported 
weapons of mass destruction,'' Sokolski said.
                                 ______
                                 

  Indian Nuclear Export Controls and Information Security: Important 
           Questions Remain--ISIS Report, September 18, 2008

are indian export controls and information security congruent with the 
                       promises and cheerleading?

                  (By David Albright and Paul Brannan)

    The Nuclear Suppliers Group (NSG) released a statement on September 
6, 2008, outlining its conditions for allowing the transfer of nuclear 
technology to India for use in IAEA safeguarded facilities. According 
to the statement, the NSG ``note(d) steps that India has voluntarily 
taken'' to institute ``a national export control system capable of 
effectively controlling transfers of multilaterally controlled . . . 
nuclear-related material, equipment and technology."
    ISIS believes that important questions remain about the adequacy 
and implementation of India's export control and nuclear classification 
procedures. In addition, India's illicit procurement of dual-use 
nuclear-related items for its unsafeguarded nuclear program belies its 
commitment to the NSG.
    In assessing India's nuclear procurement practices, ISIS found 
several incidents where India conducted illicit nuclear trade and 
leaked sensitive nuclear information.\1\ Questions about past and 
current practices must be clarified as the U.S. Congress considers 
final approval of U.S.-India nuclear cooperation. The two following 
examples provide a basis to explore if India still leaks sensitive 
centrifuge information, engages in illicit nuclear trade and whether it 
will act in accordance with its promises to the NSG.
---------------------------------------------------------------------------
    \1\ http://isis-online.org/publications/southasia/
indianprocurement.pdf; http://isis-online.org/publications/southasia/
indiacritique.pdf; http://www.isis-online.org/publications/southasia/
indiagrowingcapacity.pdf.
---------------------------------------------------------------------------
leaks of sensitive centrifuge component design drawings and inadequate 
                          information security
    India Rare Earths (IRE), a sub-entity of India's Department of 
Atomic Energy, procures sensitive materials and technology for a secret 
gas centrifuge uranium enrichment plant codenamed ``Rare Materials 
Project'' (RMP) outside Mysore, India. IRE uses popular technology 
procurement Web sites and newspapers to solicit interested firms to 
purchase bid documents. These documents can be purchased for 
approximately $10 and some of them contained detailed drawings and 
manufacturing instructions for direct-use centrifuge components and 
other sensitive centrifuge-related items. In 2007, ISIS was easily able 
to attain component design drawings for the manufacture of sensitive 
centrifuge components. Figures 1, 2 and 3 show drawings for the 
manufacture of bellows in a supercritical centrifuge rotor made from 
maraging steel. The thin-walled rotor and bellows is considered one of 
the most sensitive centrifuge parts. ISIS removed specific dimensions 
and tolerances from the drawings, but otherwise did not change them. 
These drawings were in documents that also provide more details on the 
part's manufacture. Aside from loosely worded propriety language 
stamped on some of the designs, there isn't any notation prohibiting 
their export, nor any notation indicating that they are sensitive.
    The level of detail in the documents is sufficient that they would 
be considered classified in supplier countries and not distributed 
without careful controls over their use and requirements for their 
protection. India may be releasing sensitive know-how to firms that may 
not intend to bid, may have forged their identity, or may be seeking 
centrifuge design information for secret nuclear programs. Another 
concern is that a winning bidder may be willing to manufacture and sell 
the same items to other, unknown clients. Other than the loosely worded 
propriety stamp on some of the drawings, any actual controls in place 
to stop such additional sales could not be discerned.
           illicit procurement of tributyl phosphate in india
    Before April 2003, India procured from China large quantities of 
tributyl phosphate (TBP), a dual-use chemical that is used in nuclear 
programs to separate plutonium. China enacted new end-user requirements 
after a 2002 sale of TBP to North Korea was criticized by the U.S. 
government. India's subsequent attempts to procure TBP from China were 
unsuccessful, according to an Indian knowledgeable about India's 
procurement of TBP. India was forced to look elsewhere for a reliable 
supply of TBP and utilized an array of Indian trading companies to 
procure TBP secretly from suppliers in Germany and Russia according to 
information provided by this Indian source. The Nuclear Fuel Complex 
(NFC) in Hyderabad, India put forward tenders for buying TBP. Indian 
trading companies, some of which were liaison offices for European 
companies, successfully bid on these tenders and ordered the TBP from 
German and Russian suppliers (see figure 4). One order for 160 metric 
tonnes of TBP passed through multiple trading companies in India and 
Europe. In each case, the TBP was then shipped to India with the Indian 
trading companies, and not the NFC, listed as the recipient. The 
trading companies then turned over the TBP to the NFC. In each 
instance, the Nuclear Fuel Complex hid behind trading companies and 
procured TBP without the suppliers knowing that the materials were for 
the unsafeguarded nuclear program.








                                 ______
                                 

  [From the Defense News and Army Times Publishing Co., Mar. 27, 2006]

Indian Navy Trains Iranian Sailors; U.S., India Straddle Foreign Policy 
                                  Line

   (By Vivek Raghuvanshi, New Delhi and Gopal Ratnam, Washington, DC)

     While U.S. President George W. Bush was in New Delhi earlier this 
month to sign a historic deal to supply nuclear fuel and technologies 
to India, two Iranian warships were in Kochi, the headquarters of 
Indian Navy's Southern Command, for a training program under a three-
year-old military-cooperation agreement with Tehran.
     The confluence of events illustrates the fine foreign-policy lines 
that U.S. and Indian officials are straddling.
     The Bush administration is trying to slow Iran's nuclear-weapon 
program but also seeking Tehran's help in stabilizing Iraq. New Delhi 
appears to be striking a similar balance between closer strategic ties 
with Washington while seeking an independent relationship with oil-
producing Iran.
     The March 3-8 visit to Kochi by the IRIS Bandar Abbas, a fleet-
supply-turned-training ship, and IRIS Lavan, an amphibious ship, was 
the first Iranian naval visit to India in many years, Indian Navy 
officials told local newspapers.
     Indian naval instructors briefed nearly 220 Iranian sailors on the 
Indian Navy's training approach and course details, said Capt. M. 
Nambiar, spokesman for the Indian Navy's Southern Command.
     The visit could be part of a larger Indo-Iranian naval training 
program, local press reports said. In 2003, India and Iran signed a 
strategic agreement to cooperate in defense and other matters. The deal 
was cemented by the visit of then-Iranian President Mohammed Khatami to 
the Republic Day parade in New Delhi, an honor usually reserved for key 
allies.
     But Indian officials tried to downplay the significance of the 
ships' visit, saying that it was a routine call by foreign training 
vessels at India's main naval training port.
     ``There is no particular significance to the timing of the call. 
This was a matter decided upon through normal diplomatic channels 
several months back and such visits are part of usual courtesies 
extended by navies of the world to their counterparts,'' one Indian 
diplomat said. ``India's cooperation with Iran in the defense field is 
extremely limited.''
     Pentagon spokesman Lt. Col. Barry Venable declined to comment on 
India's training of Iranian sailors.
     State Department officials also declined to comment by press time, 
saying they were seeking more details about the Iranian ship visit.
                         concern in washington
     But the India-Iran relationship is of serious concern to 
policymakers in Washington.
     ``India's relationship with Iran is a sensitive area that will 
shape how far we can go in our relationship with India, that's for 
sure,'' said Michael Green, who until recently directed Asia affairs at 
the White House National Security Council. Now an Asia specialist at 
the Center for Strategic and International Studies, Washington, Green 
he said he didn't know details of the Iranian ship visit.
     The Bush administration, citing India's democracy and fast-growing 
economy, has highlighted the relationship as the cornerstone of a 
strategic push to build strong ties in Asia. A recent agreement settled 
by Bush and Indian Prime Minister Manmohan Singh would allow India to 
import nuclear fuel and technologies to meet India's energy needs.
     The Pentagon and the American defense industry also are hoping to 
sell several billion dollars worth of high-tech weapons to India, 
including fighter planes, transport and surveillance aircraft, radar 
and naval vessels.
     But key Members of Congress--including Senator Richard Lugar, R-
Ind., chairman of the Senate Foreign Relations Committee, and 
Representative Henry Hyde, R-Ill., chairman of the House International 
Relations Committee--have yet to throw their support behind the 
proposed nuclear agreement, which would require changes to U.S. law.
     Both are staunch advocates of nonproliferation measures, and are 
concerned that the proposed deal could hurt international efforts to 
prevent the spread of nuclear weapons.
     Former U.S. Sen. Sam Nunn, another such advocate, has said the 
U.S.-India nuclear cooperation could harm ``United States vital 
interests'' and urged Congress not to support the deal without 
substantial modifications.
                            seeking balance
     India and Pakistan have been discussing proposals for a $4.5 
billion pipeline to import Iranian natural gas. U.S. Secretary of State 
Condoleezza Rice opposed the deal at a press conference in New Delhi in 
March 2005, saying it would encourage Tehran to defy the international 
community.
     But Indian officials refused to abandon the project, and the White 
House has apparently changed its mind.
     ``Our beef with Iran is not the pipeline,'' Bush said in Islamabad 
March 4. ``Our beef with Iran is, in fact, they want to develop a 
nuclear weapon, and I believe a nuclear weapon in the hands of the 
Iranians will be very dangerous for all of us.''
     India reversed a long-standing position of its own in recent 
months by supporting Washington's effort to send the issue of Iran's 
nuclear-weapon program to the U.N. Security Council.
     A top national-security official in India's previous government 
urged New Delhi to balance its ties to Washington and its neighborhood.
     ``India, by forging nuclear cooperation ties with the United 
States, should not adopt an American line on dealing with Iran,'' said 
Brijesh Mishra, who was national security adviser in the National 
Democratic Alliance government led by Prime Minister Atal Behari 
Vajpayee.
     Mishra said ties to Iran could secure oil for energy-thirsty India 
as well as be ``an important gateway'' to improving relations with 
central Asian states.
     India's vote against Iran ``got the government into trouble with 
its own communist party allies'' who saw it as a betrayal of the 
county's policies, said Salman Haidar, a senior fellow at the U.S. 
Institute of Peace, Washington, and a former foreign secretary of 
India.
     The current government, led by Prime Minister Manmohan Singh, is 
supported by communist parties known for their anti-American views.
     Countries seeking closer relationship with the United States 
always face the problem of balancing their regional interests with 
those of Washington, Haidar said.
     ``India's strategic interest drives us toward Iran, but a 
different strategic calculation makes us wary of Iran. But we are 
certainly not going to treat Iran as a hostile power. If there is 
military action against Iran, I would not be surprised if India stays 
away from it. Not being looked upon as an American auxiliary is 
important for India. That's the way we are going.''
                                 ______
                                 

                   [From Defense News, Mar. 19, 2007]

          India, Iran Form Joint Group To Deepen Defense Ties

                   (By Vivek Raghuvanshi, New Delhi)

    Iran and India agreed earlier this month to form a joint defense 
working group, which will meet later this year in Tehran to prepare a 
road map for defense cooperation, officials from both countries said.
    The working group will mostly evaluate Tehran's request that India 
train some military personnel, Indian Defence Ministry sources said.
    The agreement, which follows the broader strategic partnership 
accord the two countries signed in 2003, emerged from high-level talks 
held here during the March 4-9 visit of Rear Adm. Sajjad Kouchaki 
Badelani, commander of Iran's Navy.
    Iranian diplomats here said Badelani's visit will spur defense 
cooperation, which had been low-key despite the strategic agreement. 
Under the 2003 accord, India agreed to provide Iran's military with 
hardware, training, maintenance and modernization.
    ``Badelani was in India last week at the invitation of Adm. Sureesh 
Mehta, chief of staff of the Indian Navy,'' an Indian Navy official 
said. ``Iran and India are neighbors with deep civilization, cultural 
and people-to-people links.''
    Badelani's visit was the first top-level contact between the two 
navies since former Indian Navy Chief Madhvendra Singh visited Iran in 
2003. The Iranian admiral met with Defence Minister A.K. Antony, 
Defence Secretary Shekhar Dutt, Air Force Chief Air Marshal S.P. Tyagi 
and Army Vice Chief Lt. Gen. Deepak Kapoor, Indian Defence Ministry 
sources said.
    Badelani visited the Indian Navy's diving and submarine training 
schools at Visakhapatnam, and its navigation, signal and maritime 
warfare training schools at the Kochi base. Two Iranian naval ships on 
a training sortie visited Kochi in March 2006.
    The Iranian delegation suggested exchanging warship engineers but 
no decision was reached, Defence Ministry sources said.
    Navy officials said Badelani's visit will stregthen the traditional 
relations between India and Iran and help the Indian Navy build 
alliances to secure regional sea lanes and cooperate on other maritime 
matters.
    ``We have tremendous interest in the Persian Gulf because of energy 
resources, and India would like to have stability in the Persian 
Gulf,'' said defense analyst Gurpreet Khurana of the Institute of 
Defence Studies and Analysis, based here.
    Sources in the Indian Ministry of Petroleum said construction of an 
1,100-kilometer gas pipeline from Iran through Pakistan to India is in 
the final stages.
    Badelani's visit followed New Delhi's ban on the export to Iran of 
all items, materials, equipment, goods and technology that could 
contribute to its nuclear enrichment program. India imposed the ban in 
February in compliance with a December's U.N. Security Council 
Resolution.