[Senate Report 109-288]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 527

109th Congress                                                   Report
                                 SENATE
 2d Session                                                     109-288

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


    UNITED STATES-INDIA PEACEFUL ATOMIC ENERGY COOPERATION AND U.S. 
                 ADDITIONAL PROTOCOL IMPLEMENTATION ACT

                               __________

                              R E P O R T



                                 of the

                     COMMITTEE ON FOREIGN RELATIONS

                         [to accompany s. 3709]




  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

                  July 20, 2006, Ordered to be printed

                                 _____

                     U.S. GOVERNMENT PRINTING OFFICE
                             WASHINGTON: 2006        
28-789





       UNITED STATES-INDIA PEACEFUL ATOMIC ENERGY COOPERATION AND
              U.S. ADDITIONAL PROTOCOL IMPLEMENTATION ACT


                                                       Calendar No. 527
109th Congress                                                   Report
                                 SENATE
 2d Session                                                     109-288

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




               UNITED STATES-INDIA PEACEFUL ATOMIC ENERGY
                COOPERATION AND U.S. ADDITIONAL PROTOCOL
                           IMPLEMENTATION ACT

                                _______
                                

                 July 20, 2006.--Ordered to be printed

                                _______
                                

          Mr. Lugar, from the Committee on Foreign Relations,
                        submitted the following

                                 REPORT

                         [To accompany S. 3709]

    The Committee on Foreign Relations, having had under 
consideration an original bill (S. 3709) to exempt from certain 
requirements of the Atomic Energy Act of 1954, United States 
exports of nuclear materials, equipment, and technology to 
India, and to implement the United States Additional Protocol, 
reports favorably thereon and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Committee Action................................................12
III. Summary of Legislation..........................................14
 IV. Cost Estimate...................................................44
  V. Evaluation of Regulatory Impact.................................44
 VI. Changes in Existing Law.........................................47
VII. Annex: Additional Documents and Information.....................51

                         I. Purpose and Summary

    The United States-India Peaceful Atomic Energy Cooperation 
Act would exempt from certain requirements of the Atomic Energy 
Act of 1954 (42 USC 2011 et seq.), exports of nuclear material, 
equipment and technology from the United States, and reexports 
of such U.S.-origin items, to India. Such items have not been 
transferred to India by the United States since India's 
detonation of a nuclear explosive device in the 1970s and the 
subsequent decision by the United States to cease nuclear 
cooperation with India.
    On July 18, 2005, President Bush and Prime Minister 
Manmohan Singh of India issued a Joint Statement. The Joint 
Statement covered a range of issues and common interests 
between the two leaders and their nations, and in it both 
leaders also committed to re-establishing civil nuclear 
commerce between the United States and India, and between other 
nations of the world and India, if India completed a set of 
steps that would result in greater adherence to the global 
nonproliferation regime of multilateral export control groups 
and treaties. President Bush committed that he would ``work to 
achieve full civil nuclear energy cooperation with India as it 
realizes its goals of promoting nuclear power and achieving 
energy security'' and to ``seek agreement from Congress to 
adjust U.S. laws and policies'' to permit that cooperation.\1\ 
President Bush also promised to ``work with friends and allies 
to adjust international regimes to enable full civil nuclear 
energy cooperation and trade with India, including but not 
limited to expeditious consideration of fuel supplies for 
safeguarded nuclear reactors at Tarapur.''\2\
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    \1\Available at http://www.whitehouse.gov/news/releases/2004/09/
20040921-18.html. The full text is reproduced in the annex to this 
report.
    \2\Ibid.
---------------------------------------------------------------------------
    Prime Minister Singh also made commitments on the part of 
India:

          The Prime Minister conveyed that for his part, India would 
        reciprocally agree that it would be ready to assume the same 
        responsibilities and practices and acquire the same benefits 
        and advantages as other leading countries with advanced nuclear 
        technology, such as the United States. These responsibilities 
        and practices consist of identifying and separating civilian 
        and military nuclear facilities and programs in a phased manner 
        and filing a declaration regarding its civilian facilities with 
        the International Atomic Energy Agency (IAEA); taking a 
        decision to place voluntarily its civilian nuclear facilities 
        under IAEA safeguards; signing and adhering to an Additional 
        Protocol with respect to civilian nuclear facilities; 
        continuing India's unilateral moratorium on nuclear testing; 
        working with the United States for the conclusion of a 
        multilateral Fissile Material Cut Off Treaty; refraining from 
        transfer of enrichment and reprocessing technologies to states 
        that do not have them and supporting international efforts to 
        limit their spread; and ensuring that the necessary steps have 
        been taken to secure nuclear materials and technology through 
        comprehensive export control legislation and through 
        harmonization and adherence to Missile Technology Control 
        Regime (MTCR) and Nuclear Suppliers Group (NSG) guidelines.\3\
---------------------------------------------------------------------------
    \3\Ibid.

Strategic Rationale:

    The India agreement is perhaps the most important strategic 
diplomatic initiative undertaken by this administration, and it 
represents a fundamental departure from the crisis management 
mentality that has dominated foreign policy in recent years. By 
concluding this pact and the far-reaching set of cooperative 
agreements that accompany it, the President has embraced a 
long-term outlook that seeks to strengthen our foreign policy 
in a way that will give us new diplomatic options and improve 
global stability. With this agreement, the administration is 
asking Congress to see the opportunities that lie beyond the 
horizon of the current presidential term.
    The committee studied carefully the implications of the 
nuclear pact on non-proliferation policy. It was concerned 
about the precedent set by this action, and worked to ensure 
that this agreement does not undercut U.S. compliance with its 
responsibilities under the Nuclear Non-Proliferation Treaty. 
The committee believes that its bill achieves a proper balance 
and will help solidify New Delhi's commitments to implement 
strong export controls, separate its civilian nuclear 
infrastructure from its weapons program, and place civilian 
facilities under IAEA safeguards. This agreement also would be 
a powerful incentive for India to cooperate closely with the 
United States in stopping proliferation and to abstain from 
further nuclear weapons tests.
    The administration's declaration that we would welcome 
India's advancement as a major economic and political player on 
the world stage represents a strategic decision to invest 
political capital in a country with a vibrant democracy, 
rapidly growing economy, and increasing clout. With a well-
educated middle class that is larger than the entire U.S. 
population, India can be an anchor of stability in Asia and an 
engine of global economic growth.
    It can also be a key partner in countering global extremist 
trends. Both the United States and India understand the 
importance of opposing violent movements through the promotion 
of religious pluralism, tolerance, and democratic freedoms. As 
a country with well-entrenched democratic traditions and the 
world's second largest Muslim population, India can set an 
example of a multi-religious and multi-cultural democracy in an 
otherwise volatile region.
    India is already assuming a new role in world affairs. Its 
votes at the IAEA on the Iran issue in September 2005 and 
February 2006 demonstrate that New Delhi is able and willing to 
adopt a more constructive role on international non-
proliferation issues. India continues to prize its strategic 
autonomy, but this agreement will give it increasing incentives 
to use its influence to bring about international stability and 
global economic progress.

Historical Background:

    The committee notes that the administration had, even 
before the July 18, 2005 Joint Statement, already significantly 
revised certain U.S. laws and policies regarding sensitive 
technology exports to India. Under the ``Next Steps in 
Strategic Partnership'' (NSSP), a substantial number of changes 
to the Export Administration Regulations (the EAR, 15 CFR 730-
744) were made for India. The NSSP began with the November 2001 
statements between President Bush and then-Indian Prime 
Minister Vajpayee and was formally announced in a statement by 
President Bush on January 12, 2004.\4\ The NSSP apparently 
culminated in the July 18, 2005 Joint statement. The items that 
have had new treatment extended to them in respect of their 
export to India from the United States have included 
technologies in sensitive areas such as space launch, advanced 
computing, and information on certain missile defense systems.
---------------------------------------------------------------------------
    \4\Available at http://www.whitehouse.gov/news/releases/2004/01/
20040112-1.html.
---------------------------------------------------------------------------
    In September 2004, and again in each of August and December 
2005, the administration substantially revised the EAR for 
exports of certain items to India, including the export or 
reexport of nuclear items which were unilaterally controlled by 
the United States for proliferation reasons. These were 
restricted to the ``balance of plant'' portions of facilities 
in India already under IAEA safeguards. These amended rules 
also removed several Indian entities from the Commerce 
Department's Entities List.\5\ The amended regulations, 
however, did not affect items that were and are subject to NSG 
controls.
---------------------------------------------------------------------------
    \5\Supplement No. 4 to Part 744 to the EAR (15 C.F.R. Part 744, 
Supp. No. 4).
---------------------------------------------------------------------------
    Thus, by early 2006, the administration had made a number 
of changes to U.S. regulations and policies for India. But 
those changes had brought the United States to the end of what 
could be done unilaterally. Additional changes to U.S. law 
would violate international controls, in particular those of 
the NSG. For any additional changes, particularly in respect of 
exports of nuclear materials, equipment and sensitive nuclear 
technology to India, agreement would be needed among the 
members of the NSG to permit such trade with India.
    Since the enactment of the Nuclear Nonproliferation Act of 
1978 (NNPA), it has been a requirement of U.S. law that, to 
continue nuclear supply to a non-nuclear weapon state (i.e., 
any state other than the five nuclear weapon states recognized 
by the NPT), ``IAEA safeguards be maintained with respect to 
all nuclear materials in all peaceful nuclear activities within 
the territory of such state, under its jurisdiction, or carried 
out under its control anywhere.''\6\ This requirement, known as 
the ``full-scope safeguards'' provision, was also subsequently 
incorporated into the ``Nuclear Suppliers Guidelines'' at a 
meeting of the NSG in Warsaw, Poland, on April 3, 1992.\7\ The 
committee notes that this requirement was achieved largely 
through the direct efforts of the United States. Under 
Secretary of State for International Security Affairs Reginald 
Bartholomew testified before the Subcommittee on Foreign 
Operations of the House Appropriations Committee on April 8, 
1992 that:
---------------------------------------------------------------------------
    \6\At section 123.a(2) of the Atomic Energy Act of 1954 (42 USC 
2153.a(2)).
    \7\``Press Statement of the Nuclear Suppliers Meeting,'' Warsaw. 
Poland, April 3, 1992, available at http://
www.nuclearsuppliersgroup.org/PRESS/1992-Press.pdf, hereinafter 
``Warsaw NSG Statement.'' The specific requirement rests at paragraph 
4(a) of the NSG Guidelines for Nuclear Transfers, INFCIRC/254/Rev.8/
Part I, and states that ``Suppliers should transfer trigger list items 
or related technology to a non-nuclear-weapon State only when the 
receiving State has brought into force an agreement with the IAEA 
requiring the application of safeguards on all source and special 
fissionable material in its current and future peaceful activities.''

          There has been significant progress over the past couple of 
        years on a key nuclear export policy long supported by the 
        U.S., i.e., requiring full-scope IAEA safeguards in non-
        nuclear-weapons states as a condition for any significant, new 
        nuclear supply commitment. All 27 members of the Nuclear 
        Suppliers Agreement issued a statement calling for full-scope 
        safeguards as a condition of significant nuclear supply.\8\
---------------------------------------------------------------------------
    \8\``Text of Statement Prepared for Delivery by Reginald 
Bartholomew, Under Secretary for International Security Affairs, U.S. 
Department of State, Before the Subcommittee on Foreign Operations of 
the House Appropriations Committee, Washington, DC,'' April 8, 1992, 
available on LexisNexis, hereinafter, ``Bartholomew Statement.''

    The committee notes that another important U.S. goal was 
achieved at the 1992 Warsaw meeting, as well. In ``recognition 
of the growing problems posed by the potential use of nuclear-
related dual-use materials, equipment and technology in un-
safeguarded nuclear programs or in nuclear weapons programs,'' 
the NSG decided to adopt ``a comprehensive arrangement to 
control these items. . . . which consist[ed] of a set of 
guidelines and a list of some 65 items to be controlled . . . 
[which where] incorporated into the Nuclear Suppliers 
Guidelines.''\9\ The committee believes that the achievements 
of the United States at the 1992 Warsaw NSG meeting were 
substantial. They increased the strength of international 
nuclear export controls and extended to the international 
community the controls already embodied in U.S. law. The 
committee notes that the NSG has since grown to include more 
than 40 Participating Governments,\10\ making the scope of its 
controls even more important. In addition, after enactment of 
the requirement for full-scope safeguards in U.S. law, many 
other countries specified this requirement in their own 
bilateral agreements and laws regarding international 
cooperation in atomic energy.
---------------------------------------------------------------------------
    \9\Warsaw NSG Statement.
    \10\The current Participating Governments are: Argentina, 
Australia, Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, China, 
Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, 
Germany, Greece, Hungary, Ireland, Italy, Japan, Kazakhstan, the 
Republic of Korea, Latvia, Lithuania, Luxembourg, Malta, the 
Netherlands, New Zealand, Norway, Poland, Portugal, Romania, the 
Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sweden, 
Switzerland, Turkey, Ukraine, the United Kingdom, and the United 
States, at http://www.nuclearsuppliersgroup.org/member.htm.
---------------------------------------------------------------------------
    The requirement for full-scope safeguards in the NSG arose 
out of the 1990 Review Conference on the Nuclear 
Nonproliferation Treaty (NPT), which made important 
recommendations in respect of Article III of the NPT (which 
requires all non-nuclear weapon States Parties to accept IAEA 
safeguards and verification activities ``with a view to 
preventing diversion of nuclear energy from peaceful uses to 
nuclear weapons or other nuclear explosive devices),''\11\ one 
of which was ``That nuclear supplier States require, as a 
necessary condition for the transfer of relevant nuclear 
supplies to non-nuclear weapon States, the acceptance of IAEA 
safeguards on all their current and future nuclear activities 
(i.e. full-scope safeguards or comprehensive safeguards).''\12\
---------------------------------------------------------------------------
    \11\Treaty on the Nonproliferation of Nuclear Weapons, done at 
Washington, London and Moscow, July 1, 1968, and entered into force 
March 5, 1970 (21 USC 483) and in IAEA Information Circular (INFCIRC) 
140, at http://www.iaea.org/Publications/Documents/Infcircs/Others/
infcirc140.pdf.
    \12\``Communication of 10 May 2005 received from the Government of 
Sweden on behalf of the participating Government of the Nuclear 
Suppliers Group,'' The Nuclear Suppliers Group: Its Origins, Roles and 
Activities, IAEA INFCIRC/539/Rev.3, 30 May 2005, available at http://
www.nuclearsuppliersgroup.org/PDF/infcirc539r3.pdf.
---------------------------------------------------------------------------

Existing U.S. Law:

    Section 123 of the Atomic Energy Act (42 U.S.C. 2153) 
requires an agreement for cooperation as a prerequisite for 
significant nuclear exports. The State Department, with the 
advice of the Department of Energy, negotiates such agreements, 
which spell out the terms, conditions, duration, nature, and 
scope of cooperation. The NNPA added a set of nine criteria to 
section 123 a. of the Atomic Energy Act (42 USC 2153(a)) which 
agreements for cooperation (called ``peaceful nuclear 
cooperation agreements'' and expected to meet.
    These include guarantees that: (1) safeguards on nuclear 
material and equipment transferred continue in perpetuity; (2) 
full-scope safeguards are applied in non-nuclear weapon states; 
(3) nothing transferred is used for any nuclear explosive 
device or for any other military purpose; (4) the United States 
has the right to seek the return of exported items if the 
cooperating state detonates a nuclear explosive device or 
terminates or abrogates an IAEA safeguards agreement; (5) there 
is no transfer of material or classified data without U.S. 
consent; (6) physical security is maintained; (7) no enrichment 
or reprocessing of United States-origin nuclear materials and 
fuel may be done without prior U.S. approval; (8) storage must 
first be approved by the United States for plutonium and highly 
enriched uranium; and (9) anything subsequently produced 
through cooperation is subject to all of the above 
requirements.
    If an agreement does not meet one or more of the 
requirements of Section 123 a., then the President presents the 
agreement to Congress as exempt from those requirements. Such 
an agreement cannot enter into force unless Congress passes a 
joint resolution of approval. In a case in which such an 
agreement was exempted because the recipient non-nuclear weapon 
state did not have full-scope safeguards, Congress could review 
one export license annually, and could, by enacting a 
resolution of disapproval, terminate exports for the remainder 
of that Congress under provisions of Section 128 (42 USC 2157).
    The United States currently has about two dozen 123 
agreements in force. A Section 123 agreement is presented to 
Congress, whereupon it is reviewed for 90 days of continuous 
session. If it meets all 9 criteria in Section 123 and Congress 
does not enact a resolution of disapproval of the agreement, 
the agreement enters into force. The Nuclear Regulatory 
Commission (NRC) reviews licenses for nuclear exports\13\ 
according to the criteria of the Atomic Energy Act (AEA). If 
met, licenses are authorized, and if not, the President may 
authorize exports by executive order.\14\
---------------------------------------------------------------------------
    \13\10 CFR 110, et seq.
    \14\See CRS Report RL 33016, ``U.S. Nuclear Cooperation with India: 
Issues for Congress,'' for further detail.
---------------------------------------------------------------------------
    The NNPA also included a provision for halting exports if a 
country were to test a nuclear device, violate safeguards 
agreements, proliferate to another non-nuclear weapon state, or 
continue nuclear weapons-related activities (now section 129 of 
the AEA (42 USC 2157)).
    In order for the United States to be able to export nuclear 
fuel, reactors and sensitive technology to India, U.S. laws and 
policies, which served as the basis for international nuclear 
export controls, and those controls as well, would need to be 
modified to permit such commerce.

India's Separation Plan:

    The administration stated that before changes in the law 
would be sought by the United States for India, India was to 
undertake certain of its commitments under the July 18, 2005 
Joint Statement. The most important was the Indian promise to 
identify and separate its ``civilian and military nuclear 
facilities and programs in a phased manner.''\15\ Under 
Secretary of State for Arms Control and International Security 
Robert G. Joseph testified before the committee on November 2, 
2005:
---------------------------------------------------------------------------
    \15\See Joint Statement text in the annex to this report.

          We expect--and have indicated to the Government of India--
        that India's separation of its civil and military nuclear 
        infrastructure must be conducted in a credible and transparent 
        manner, and be defensible from a nonproliferation standpoint. 
        In other words, the separation and the resultant safeguards 
        must contribute to our nonproliferation goals. Many of our 
        international partners have similarly indicated that they view 
        this as a necessary precondition, and will not be able to 
        support civil nuclear cooperation with India otherwise. We 
        believe that the Indian government understands this.\16\
---------------------------------------------------------------------------
    \16\Prepared Remarks of Robert G. Joseph, Under Secretary of State 
for Arms Control and International Security, at a hearing of the Senate 
Committee on Foreign Relations on ``U.S.-Indian Nuclear Energy 
Cooperation: Security and Nonproliferation Implications,'' November 2, 
2005, S. Hrg. 109-384, and available at http://foreign.senate.gov/
testimony/2005/JosephTestimony051102.pdf. Hereinafter ``November 2 
Hearing.''

    The administration did not specify what standards would be 
used by the United States to evaluate India's separation plan 
to establish that it is credible, transparent and defensible 
from a nonproliferation standpoint. The committee did receive 
testimony from the Honorable Ronald F. Lehman, the former 
Director of the U.S. Arms Control and Disarmament Agency, which 
---------------------------------------------------------------------------
put the present U.S.-Indian separation proposal in context:

          Over the years, various Indian interlocutors have floated the 
        idea of separating civilian from military facilities and 
        applying safeguards to them. We have never known the scale of 
        the separation or the quality of the safeguards. If India is 
        serious about nuclear power, then its infrastructure should be 
        declared predominantly civilian with permanent IAEA safeguards. 
        To clarify the separation may take some time, and full 
        implementation of IAEA safeguards could take years. A major 
        shift to safeguard civilian activity would be a positive step 
        worthy of considerable movement on the part of the U.S. and the 
        international community. A token step would be 
        counterproductive.\17\
---------------------------------------------------------------------------
    \17\November 2 Hearing.

    With regard to the Indian Separation Plan which was 
presented by Prime Minister Singh in the Indian Parliament on 
March 2, 2006, Secretary of State Condoleezza Rice testified 
that it was indeed credible and defensible from a 
---------------------------------------------------------------------------
nonproliferation standpoint because:

           . . . it had to capture more than just a token number of 
        Indian nuclear facilities, which it did by encompassing nearly 
        two-thirds of India's current and planned thermal power 
        reactors as well as all future civil thermal and breeder 
        reactors. Importantly, for the safeguards to be meaningful, 
        India had to commit to apply IAEA safeguards in perpetuity; it 
        did so. Once a reactor is under IAEA safeguards, those 
        safeguards will remain there permanently and on an 
        unconditional basis. Further, in our view, the plan also needed 
        to include upstream and downstream facilities associated with 
        the safeguarded reactors to provide a true separation of civil 
        and military programs. India committed to these steps, and we 
        have concluded that its separation plan meets the criteria 
        established: it is credible, transparent, and defensible from a 
        nonproliferation standpoint.\18\
---------------------------------------------------------------------------
    \18\``Questions for the Record Submitted to Secretary of State 
Condoleezza Rice by Chairman Richard G. Lugar, April 5, 2006,'' 
hereinafter ``April 5 QFRs'' see annex to this report.

    The committee has carefully reviewed the text of the March 
2, 2006 Indian Government's Separation Plan and its further 
clarification of that document on May 6, 2006.\19\ The 
committee commends India for placing additional facilities and 
materials under the IAEA safeguards system. Such actions can 
contribute to the ability of the IAEA to fulfill its mandate to 
better ``apply safeguards, at the request of the parties, to 
any bilateral or multilateral arrangement, or at the request of 
a State, to any of that State's activities in the field of 
atomic energy.''\20\ The committee is also aware, however, of 
the general limitations that exist with respect to the 
implementation of the IAEA safeguards system. This stems from 
the fact that, like any large international organization with 
responsibilities around the globe, the IAEA has finite 
resources with which to tackle its many verification tasks, at 
both the physical and political levels, and in many countries 
where it is tasked with particularly significant and intense 
verification responsibilities, such as Iran, those activities 
can quickly absorb most of the available personnel and the 
necessary funds in the IAEA's Safeguards Division.
---------------------------------------------------------------------------
    \19\Both the March 2 and May 6 documents are appended to this 
report.
    \20\Article III, paragraph 5 of the Statute of the Agency, 
available at http://www.iaea.org/About/statute--text.html.
---------------------------------------------------------------------------
    The committee's views regarding the IAEA and its safeguards 
system are contained in the report it made with its recommended 
resolution of ratification of the U.S. Additional Protocol to 
its Safeguards Agreement with the IAEA,\21\ which the Senate 
passed on March 31, 2004.\22\
---------------------------------------------------------------------------
    \21\Senate Executive Report 108-12.
    \22\Resolution of advice and consent to ratification agreed to in 
Senate by Division Vote. (5291)
---------------------------------------------------------------------------
    The limitations which apply generally to IAEA activities 
are further complicated by the fact that India has nuclear 
weapons and is not a State Party to the NPT. There is, 
therefore, little for the IAEA to discover in the way of 
diversion of nuclear materials to an undeclared nuclear weapons 
program, as in a non-nuclear weapon State Party to the NPT. 
Given that the IAEA is already faced with resource limitations 
in states where it has an absolute imperative to detect such 
diversion, the Agency has little to gain from closely 
monitoring India's civil nuclear facilities, rather, safeguards 
in India will be a favor to countries that engage in nuclear 
commerce with India, to help assure that their trade with India 
does not assist India's nuclear weapons program. The committee 
expects the administration to ensure that safeguards in India 
do not come at the expense of other IAEA safeguards activities.
    India's March 2, 2006 separation plan has been criticized 
by many nonproliferation experts who have stated it does not 
constitute a true separation of civilian and military nuclear 
facilities.
    On the question of how facilities were identified, India's 
separation documents provide few assurances. India's March 
separation document states, ``Identification of purely civilian 
facilities and programmes that have no strategic implications 
poses a particular challenge'' in India.\23\ Instead, India 
identified its ``overarching criterion'' as whether 
``subjecting a facility to IAEA safeguards would impact 
adversely on India's national security.'' Moreover, facilities 
were excluded from the civilian list if they were located in a 
larger hub of strategic significance (e.g., the Bhabha Atomic 
Research Center (BARC)), even if they were not normally engaged 
in activities of strategic significance. In addition, the March 
document states that ``Concepts such as grid connectivity are 
not relevant to the separation exercise,''\24\ and that 
reactors would be connected to the electricity grid 
``irrespective of whether the reactor concerned is civilian or 
not civilian.''\25\ It is thus complicated to discern which 
reactors, facilities and materials in India are truly for 
civilian power production and which of them are truly for a 
weapons program.
---------------------------------------------------------------------------
    \23\See annex to this report, hereinafter ``March Separation 
Document.''
    \24\Ibid.
    \25\Ibid.
---------------------------------------------------------------------------
    India has stated that it will ``include in the civilian 
list only those facilities offered for safeguards that, after 
separation, will no longer be engaged in activities of 
strategic significance.''\26\ It is difficult to tell whether 
this approach will place more facilities under safeguards in 
the future, or when such facilities might cease to be engaged 
in nuclear weapons activities, and presumably be available for 
placement under safeguards.
---------------------------------------------------------------------------
    \26\Ibid.
---------------------------------------------------------------------------
    The administration has asserted that India's separation 
document captures the majority of India's nuclear complex by 
taking in ``nearly two-thirds of India's current and planned 
thermal power reactors as well as all future civil thermal and 
breeder reactors.''\27\ While the committee commends India's 
efforts at separation, it remains concerned about the kinds of 
reactors which were not identified as civilian.
---------------------------------------------------------------------------
    \27\April 5 Hearing, hereinafter ``April 5 Hearing,'' see annex to 
this report.
---------------------------------------------------------------------------
    In the March 2 separation document, India said it would 
place 14 of India's 22 extant reactors under safeguards. 
India's present nuclear complex consists of three research 
reactors; many power reactors, including 15 operating reactors, 
with another eight under construction and three planned; two 
breeder reactors (one operating and one under construction); a 
single uranium enrichment facility; three spent fuel 
reprocessing facilities; six heavy water production plants; a 
uranium mining and processing complex, which includes three 
mines and two copper-mine tailing extraction units plus one 
mill for uranium ore, as well as numerous uranium conversion 
facilities; and three to four fuel fabrication plants.\28\
---------------------------------------------------------------------------
    \28\See Sharon Squassoni, ``India's Nuclear Separation Plan: Issues 
and Views,'' March 2, 2006, CRS Report For Congress, March 2, 2006, p. 
8, hereinafter ``Squassoni.'' See also ``Questions and Answers in 
Parliament,'' Indian Department of Atomic Energy, Monsoon Session, 
2003, available at http://www.dae.gov.in/parlqa/lokm03.pdf, which 
states ``The Nuclear Power Corporation of India Ltd. (NPCIL) a Public 
Sector Undertaking, is responsible for the design, construction and 
operation of nuclear power reactors. There are fourteen (14) nuclear 
power reactors with a total nuclear power capacity of 2720 MWe in 
operation and 8 reactors are under construction in the country.
---------------------------------------------------------------------------
    India did not identify the following facilities as 
civilian:

   8 indigenous Indian power reactors (Kaiga 1, 2, 3, 
        4; MAPS 1, 2; TAPS 3, 4);

   the Fast Breeder test Reactor (FTBR) and the 
        Prototype Fast Breeder Reactors (PFBR) under 
        construction

   enrichment facilities;

   spent fuel reprocessing facilities (except for the 
        existing safeguards on the Power Reactor Fuel 
        Reprocessing (PREFRE) plant);

   research reactors--CIRUS (which will be shut down in 
        2010), Dhruva, Advanced Heavy Water Reactor;

   heavy water plants; nor

   various military-related plants (e.g., the prototype 
        naval reactor).

    India has not declared either of its breeder reactors to be 
civilian. Some U.S. experts have suggested that ``power 
reactors, regardless of their potential to produce plutonium 
for weapons, have a civilian use and should be declared as 
civilian and safeguarded, as well as their associated fuel 
fabrication and reprocessing and spent fuel storage 
facilities,''\29\ particularly if they are intended to be used 
for peaceful purposes, and not as fissile material production 
centers. The fact that India did not decide to place its 
breeder reactors under safeguards has complicated the picture 
with regard to its having declared a majority of its program to 
be civilian since it appears to have excluded the second stage 
of its three-stage nuclear fuel cycle from safeguards. On April 
5, 2006, Secretary Rice did not offer a specific reason for 
India's not having included its breeder program in its civilian 
declaration:
---------------------------------------------------------------------------
    \29\Ibid., p. 14.

          Chairman Lugar. What reason did India give for not declaring 
        its extant 40 MWth Fast Breeder Test Reactor (FBTR) to be 
---------------------------------------------------------------------------
        civilian?

          Secretary Rice. We cannot speak for the Government of India, 
        of course, but in our discussions Indian officials argued that 
        since the FBTR was still in the experimental stage, India not 
        in a position to accept safeguards on the reactor at this time.

          Chairman Lugar. What reason did India give for not declaring 
        the 500 MWe fast breeder reactor it currently has under 
        construction to be part of its civilian program?

          Secretary Rice. The reactor is not yet complete. India stated 
        that it was not in a position to place reactors which it 
        considers experimental under safeguards. India committed to 
        placing all future civil power and breeder reactors under 
        safeguards.\30\
---------------------------------------------------------------------------
    \30\April 5 QFRs.

    The sizes and types of reactors under safeguards in India 
are directly related to the credibility of its separation plan, 
and the committee hopes that India will, in the future, place 
its breeder program under IAEA safeguards.
    The committee's concerns regarding India's breeder program 
are magnified when it considers that India has announced its 
intention to build five 500MWe breeder reactors, none of which 
have been included in the separation plan as available for 
safeguards.\31\ The committee also notes that it has been 
administration policy since 2002 to regard un-safeguarded 
stockpiles of plutonium as a danger to U.S. national security. 
As the 2002 National Strategy to Combat Weapons of Mass 
Destruction notes, ``the United States will continue to 
discourage the worldwide accumulation of separated 
plutonium.''\32\ As Secretary Rice stated in answers to the 
committee, ``The production of plutonium and other fuels as a 
byproduct of [a breeder] reactor's operation adds to the world 
net stock of potential fuel for a nuclear explosive device.''
---------------------------------------------------------------------------
    \31\M.R. Srinivasan, R.B. Grover, S.A. Bhardwaj, ``Nuclear Power in 
India: Winds of Change,'' Economic and Political Weekly, December 3, 
2005.
    \32\``National Strategy to Combat Weapons of Mass Destruction,'' in 
National Security Presidential Directive (NSPD) 17, December 2002, 
available at http://www.whitehouse.gov/news/releases/2002/12/
WMDStrategy.pdf
---------------------------------------------------------------------------
    India's present nuclear fuel cycle consists of a three-
stage process to produce and recycle plutonium and thorium as a 
reactor fuel, and to produce fissile materials for weapons:

          The first stage would rely on natural uranium-fueled reactors 
        to make plutonium; the second stage would use that plutonium in 
        fast reactors blanketed with thorium to produce U-233 (and more 
        plutonium); and the third stage would use U-233 fuel and 
        thorium fuel in fast reactors blanketed with thorium to produce 
        more U-233 for use for future fuel. India has not advanced 
        beyond the first stage of the fuel cycle, aside from running a 
        fast breeder test reactor (40 MWth Fast Breeder Test Reactor or 
        FBTR) based on a French design and a small research reactor 
        that uses U-233 fuel (Kamini).\33\
---------------------------------------------------------------------------
    \33\Squassoni, p. 4.

    As the Secretary stated in answers to the committee, this 
process requires that ``thorium . . . be converted into U-233 
in a breeder reactor. The fuel cycle requires considerable 
handling of fissile material in the various loading, unloading, 
and transfers associated with the stages of the fuel cycle. 
Each time fissile material is handled, there is a risk of 
diversion.'' The committee believes that India's nuclear plans 
highlight the need for stringent security regarding all fissile 
material, and it urges the administration to share best 
practices in that regard with India.

Safeguards:

    The effectiveness of a new safeguards agreement which India 
will negotiate with the IAEA is not yet known, and the text of 
India's March and May separation documents raises many 
questions. Secretary Rice stated before the committee on April 
5, 2006, that ``The safeguards required by this initiative are 
designed to help detect, and thereby help to prevent, the 
diversion to military use of any materials, technologies, or 
equipment provided to India's civil nuclear facilities.''\34\ 
The committee notes that IAEA safeguards, which combine nuclear 
material accountancy with inspections, generally apply only to 
nuclear materials, not to technology. Equipment supplied under 
a bilateral agreement can also be subject to a safeguards 
agreement, but the practice is to link the safeguards to the 
use of nuclear material with the equipment (versus constant 
safeguards). It is not clear whether the safeguards agreement 
will be a hybrid of existing approaches or something totally 
unique.
---------------------------------------------------------------------------
    \34\``Remarks of Secretary of State Condoleezza Rice at the Senate 
Foreign Relations Committee on the U.S.-India Civil Nuclear Cooperation 
Initiative, April 5, 2006,'' see April 5 Hearing.
---------------------------------------------------------------------------
    In November 2005, with respect to India's future safeguards 
agreement, Under Secretary Joseph wrote:

          Safeguards agreements are modeled after INFCIRC/153 (the NPT 
        safeguards agreement) or INFCIRC/66 (the Agency's safeguards 
        system predating the NPT). India will not likely sign a 
        safeguards agreement based strictly on INFCIRC/153, as this 
        would require safeguards on India's nuclear weapons program. 
        NPT-acknowledged nuclear weapon states have so- called 
        ``voluntary'' safeguards agreements . . . [that] do not 
        obligate the IAEA to actually apply safeguards and do allow for 
        the removal of facilities or material from safeguards. We heard 
        from other states at the recent NSG meeting that they would not 
        support a ``voluntary offer'' arrangement as, in their view, it 
        would be tantamount to granting de facto nuclear weapon state 
        status to India. We have similarly indicated to India that we 
        would not view such an arrangement as defensible from a 
        nonproliferation standpoint. We therefore believe that the 
        logical approach to . . . a safeguards agreement for India is 
        to use INFCIRC/66, which is currently used at India's four 
        safeguarded reactors.\35\
---------------------------------------------------------------------------
    \35\November 2 Hearing.

    Paragraph 15.c of India's March separation document states 
---------------------------------------------------------------------------
that

          [A]n India-specific safeguards agreement will be negotiated 
        between India and the IAEA providing for safeguards to guard 
        against withdrawal of safeguarded nuclear material from 
        civilian use at any time as well as providing for corrective 
        measures that India may take to ensure uninterrupted operation 
        of its civilian nuclear reactors in the event of disruption of 
        foreign fuel supplies.\36\
---------------------------------------------------------------------------
    \36\See annex to this report.

    The committee is concerned by this language, as it implies 
that IAEA safeguards might not continue to apply to India's 
civil power reactors in the event of a cutoff of foreign fuel 
supply. The phrase ``guard against withdrawal of safeguarded 
nuclear material from civilian use at any time'' is is 
consistent with application of safeguards to material in 
perpetuity. However, the phrase ``corrective measures that 
India may take to ensure uninterrupted operation of its 
civilian nuclear reactors'' is troublesome because it suggests 
a more voluntary approach to safeguarding India's reactors than 
has been asserted by administration officials, including 
Secretary of State Rice. Other aspects of the separation plan 
are discussed in the committee's section-by-section analysis.
    The committee notes that there is one area of separation 
where neither India's March nor its May documents mention 
anything--personnel. India's Department of Atomic Energy (DAE) 
employs some 50,000 personnel.\37\ The Secretary of State noted 
in April 2006 that ``While the specific issue of DAE personnel 
has not yet been discussed in detail, we would consider 
routine, frequent rotation of personnel between civil and 
military programs as being inconsistent with Indian commitments 
on separation,''\38\ and that ``We would consider the term 
``programs'' to include both program-related activities and the 
personnel involved in those activities.''\39\ The committee 
hopes that as cooperation in atomic energy with India is 
implemented the Government of India will further clarify this 
aspect of separation.
---------------------------------------------------------------------------
    \37\See http://www.dae.gov.in.
    \38\April 5 Hearing.
    \39\Ibid.
---------------------------------------------------------------------------

                          II. Committee Action

    The committee conducted an extensive review of the July 18, 
2005 Joint Statement and its attendant results.
    The committee met and received testimony from two panels on 
``United States-Indian Nuclear Energy Cooperation: Security and 
Nonproliferation Implications,'' on November 2, 2005. Witnesses 
for this hearing were: on the first panel, the Honorable R. 
Nicholas Burns, Under Secretary of State for Political Affairs, 
and the Honorable Robert G. Joseph, Under Secretary of State 
for Arms Control and International Security; on the second 
panel, the Honorable Ronald F. Lehman, II, Director, Center for 
Global Security Research, Lawrence Livermore National 
Laboratory, and formerly Director of the U.S. Arms Control and 
Disarmament Agency; the Honorable Ashton B. Carter, Co-Director 
of the Preventive Defense Project of Harvard's Kennedy School 
of Government and Stanford University, Ford Foundation 
Professor of Science and International Affairs at Harvard 
University's Belfer Center for Science and International 
Affairs, and formerly Assistant Secretary of Defense for 
International Security Policy; Henry D. Sokolski, Director of 
the Nonproliferation Policy Education Center, Washington, D.C.; 
and Michael Krepon, Co-Founder and President Emeritus of the 
Henry L. Stimson Center, Washington, DC.
    On March 16, 2006, Chairman Lugar introduced S. 2429, the 
administration's legislation to waive the application of 
certain requirements under the Atomic Energy Act of 1954 (42 
USC 2011, et seq.) with respect to India. S. 2429 was referred 
to the committee on that day.
    On March 29, 2006, the committee met in closed session for 
a briefing by the Honorable R. Nicholas Burns, Under Secretary 
of State for Political Affairs, and the Honorable Robert G. 
Joseph, Under Secretary of State for Arms Control and 
International Security, on ``U.S.-India Atomic Energy 
Cooperation: The Indian Separation Plan and the 
Administration's Legislative Proposal.''
    On April 5, 2006, the committee met to receive testimony at 
a hearing with the Honorable Condoleezza Rice, Secretary of 
State, on ``U.S.-India Atomic Energy Cooperation: The Indian 
Separation Plan and the Administration's Legislative 
Proposal.''
    On April 26, 2006, the committee met to receive testimony 
from two panels on ``U.S.-India Atomic Energy Cooperation: 
Strategic and Nonproliferation Implications.'' On panel one, 
the committee heard testimony from The Honorable William J. 
Perry, Senior Fellow at the Hoover Institution, Stanford 
University, Stanford, CA, and formerly U.S. Secretary of 
Defense; The Honorable Robert L. Gallucci, Dean of the Edmund 
A. Walsh School of Foreign Service at Georgetown University, 
Washington, D.C., and formerly chief U.S. negotiator during the 
1994 North Korean nuclear talks; the Honorable Ashton B. 
Carter, Co-Director of the Preventive Defense Project of 
Harvard's Kennedy School of Government and Stanford University, 
Ford Foundation Professor of Science and International Affairs 
at Harvard University's Belfer Center for Science and 
International Affairs, and formerly Assistant Secretary of 
Defense for International Security Policy; and Dr. Ashley J. 
Tellis, Senior Associate at the Carnegie Endowment for 
International Peace, Washington, D.C. On panel two, the 
committee heard testimony from the Honorable Ronald F. Lehman, 
II, Director, Center for Global Security Research, Lawrence 
Livermore National Laboratory, and formerly Director of the 
U.S. Arms Control and Disarmament Agency; The Honorable Robert 
J. Einhorn, Senior Adviser at the International Security 
Program of the Center for Strategic & International Studies, 
Washington, D.C., and formerly Assistant Secretary of State for 
Nonproliferation; Dr. Gary Milhollin, Director of the Wisconsin 
Project on Nuclear Arms Control, Washington, D.C.; and Dr. 
Stephen P. Cohen, Senior Fellow at the Foreign Policy Studies 
Program of the Brookings Institution, Washington, D.C.
    At a business meeting on June 29, 2006, by a roll call vote 
of 16 in favor and 2 against (Voting in favor: Senators Lugar, 
Hagel, Chafee, Allen, Coleman, Voinovich, Alexander, Sununu, 
Murkowski, Martinez, Biden, Sarbanes, Dodd, Kerry, Nelson, and 
Obama; Voting against: Senators Feingold and Boxer), the 
committee ordered reported an original bill to exempt from 
certain requirements of the Atomic Energy Act of 1954 U.S. 
exports of nuclear materials, equipment and technology to 
India, and to implement the U.S. Additional Protocol. At the 
business meeting, the following members indicated that they 
wished to be cosponsors of the committee's legislation: 
Senators Lugar, Hagel, Chafee, Allen, Coleman, Voinovich, 
Alexander, Sununu, Murkowski, Martinez, Biden, Dodd, Kerry, 
Nelson, and Obama. The committee agreed to an amendment by 
Senator Chafee by a voice vote, and agreed to an amendment by 
Senator Obama by a voice vote. An amendment by Senator Feingold 
failed by a roll call vote of 13 against and 5 in favor.

                      III. Summary of Legislation

    Chairman Lugar introduced S. 2429, the administration's 
India bill, by request, on March 15, 2006. The language of that 
bill is reproduced here, in full:

                                 A BILL

To authorize the President to waive the application of certain 
requirements under the Atomic Energy Act of 1954 with respect to India.

          Be it enacted by the Senate and House of Representatives of 
        the United States of America in Congress assembled,

SECTION 1. WAIVER AUTHORITY.

    (a) Waiver Authority.--Notwithstanding any other provision of law, 
if the President makes the determination described in subsection (b), 
the President may--
          (1) exempt a proposed agreement for cooperation with India 
        (arranged pursuant to section 123 of the Atomic Energy Act of 
        1954 (42 U.S.C. 2153)) from the requirement in section 
        123(a)(2) of the Atomic Energy Act of 1954, and such agreement 
        for cooperation shall be subject to the same congressional 
        review procedures under sections 123(b) and 123(d) of such Act 
        as an agreement for cooperation that has not been exempted from 
        any requirement contained in section 123(a) of such Act;
          (2) waive the application of section 128 of the Atomic Energy 
        Act of 1954 (42 U.S.C. 2157) with respect to India; and
          (3) waive the application of any sanction under section 129 
        of the Atomic Energy Act of 1954 (42 U.S.C. 2158) with respect 
        to India.
    (b) Determination.--The determination referred to in subsection (a) 
is a determination by the President that the following actions have 
occurred:
          (1) India has provided the United States and the 
        International Atomic Energy Agency (IAEA) with a credible plan 
        to separate civil and military facilities, materials, and 
        programs, and has filed a declaration regarding its civil 
        facilities with the IAEA.
          (2) An agreement has entered into force between India and the 
        IAEA requiring the application of safeguards in accordance with 
        IAEA practices to India's civil nuclear facilities as declared 
        in the plan described in paragraph (1).
          (3) India and the IAEA are making satisfactory progress 
        toward implementing an Additional Protocol that would apply to 
        India's civil nuclear program.
          (4) India is working with the United States for the 
        conclusion of a multilateral Fissile Material Cutoff Treaty.
          (5) India is supporting international efforts to prevent the 
        spread of enrichment and reprocessing technology.
          (6) India is ensuring that the necessary steps are being 
        taken to secure nuclear materials and technology through the 
        application of comprehensive export control legislation and 
        regulations, and through harmonization and adherence to Missile 
        Technology Control Regime (MTCR) and Nuclear Suppliers Group 
        (NSG) guidelines.
          (7) Supply to India by the United States under an agreement 
        for cooperation arranged pursuant to section 123 of the Atomic 
        Energy Act of 1954 is consistent with United States 
        participation in the Nuclear Suppliers Group.
    (c) Report.--Any determination pursuant to subsection (b) shall be 
reported to the Committee on Foreign Relations of the Senate and the 
Committee on International Relations of the House of Representatives, 
and such report shall describe the basis for the President's 
determination.
    (d) Subsequent Determination.--A determination under subsection (b) 
shall not be effective if the President determines that India has 
detonated a nuclear explosive device after the date of enactment of 
this Act.

    The committee examined the provisions of S. 2429 in detail, 
and found that, while containing a number of important 
provisions, which the committee retained in its own bill, S. 
2429 lacked a number of important features the committee 
believes are necessary in a measure which would substantially 
change U.S. nuclear export control law and policy.
    The bill reported by the committee, the United States-India 
Peaceful Atomic Energy Cooperation Act (hereinafter ``the 
Act'') would implement the President's policy as contained in 
the July 18, 2005 Joint Statement by providing a procedure 
under which certain provisions of the Atomic Energy Act of 1954 
(AEA), as amended by the NNPA of 1978, will not be applicable 
to authorized exports or reexports to India of U.S.-origin 
nuclear fuel and sensitive nuclear technology. The committee 
retained, while slightly modifying, the determination 
requirements the President would need to meet to make use of 
the authority provided in the Act to make inapplicable those 
provisions of the AEA which are specified. The Act also would 
accomplish several other important goals, notably: to protect 
the Congress's oversight role, and to ensure that expanded U.S. 
civilian nuclear commerce with India will be implemented in a 
manner that maintains U.S. nonproliferation laws, policies, and 
regulations and that complies with U.S. obligations under the 
NPT. The committee supports an improved relationship with 
India, which it believes will not be hampered by including 
these modifications, which, in its view, are wholly consistent 
with the administration's policy and with long-standing 
policies of the United States.
    Another important objective will be secured by the second 
title of the Act, which would provide needed authority to 
implement the U.S. Additional Protocol with the IAEA. This 
title is identical to S. 2489, the U.S. Additional Protocol 
Implementation Act, which the committee reported to the Senate 
on April 3, 2006. In view of the fact that signing and adhering 
to an additional protocol is one of the specific Indian 
commitments under the July 18, 2005 Joint Statement, the 
committee believes that it is in the national security and 
nonproliferation interests of the United States to ensure in 
this Act the U.S., too, meets this important nonproliferation 
commitment, which President Bush called on the Senate to meet 
in February 2004:

          I propose that by next year, only states that have signed the 
        Additional Protocol be allowed to import equipment for their 
        civilian nuclear programs. Nations that are serious about 
        fighting proliferation will approve and implement the 
        Additional Protocol. I've submitted the Additional Protocol to 
        the Senate. I urge the Senate to consent immediately to its 
        ratification.\40\
---------------------------------------------------------------------------
    \40\``President Announces New Measures to Counter the Threat of 
WMD,'' Remarks by the President on Weapons of Mass Destruction 
Proliferation, Fort Lesley J. McNair--National Defense University, 
Washington, D.C., February 11, 2004, available at http://
www.whitehouse.gov/news/releases/2004/02/20040211-4.html, hereinafter, 
``NDU Speech.''

    The Senate gave its advice and consent to ratification of 
the Additional Protocol on March 31, 2004, but the President 
cannot submit an instrument of ratification until Congress 
passes implementing legislation giving him authority to 
promulgate necessary regulations and the like.\41\ Thus 
President Bush's challenge to the Senate, and to Congress as a 
whole, has not been met with necessary action. Committee staff 
began discussions with the administration regarding 
implementing legislation in the spring and summer of 2004, and 
did not conclude those talks until early in 2006. Given the 
time that has now passed between Senate action in 2004 on the 
Additional Protocol itself, and its importance in such cases as 
Iran's nuclear activities, the committee finds ample reason to 
include the U.S. Additional Protocol Implementation Act with 
this measure.
---------------------------------------------------------------------------
    \41\The provisions of S. 2489 are explained in the committee's 
Senate Report 109-226, filed on April 3, 2006.
---------------------------------------------------------------------------

                 TITLE I--UNITED STATES-INDIA PEACEFUL
                       ATOMIC ENERGY COOPERATION

    Title I contains the committee-recommended legislation to 
permit civilian nuclear energy cooperation between the United 
States and India.

Section 101

    Sections 101, 102 and 103 set forth the short title, 
stipulate a Sense of Congress with six provisions relating to 
U.S.-Indian nuclear energy cooperation, and provide a 
declaration of policy that touches on nine important areas.
    Section 101 provides that this title be cited as the 
``United States-India Peaceful Atomic Energy Cooperation Act.''

Section 102

    Section 102 contains a broad sense of Congress that covers 
six areas. Subsection (1) states that strong bilateral 
relations with India are in the national interest of the United 
States. Subsection (2) states that the United States and India 
share common democratic values and the potential for increasing 
and sustained economic engagement. Subsection (3) states that 
commerce in civil nuclear energy with India by the United 
States and other countries has the potential to benefit the 
people of all countries. The committee views these findings as 
underlying the effort to forge a new nuclear relationship with 
India.
    Subsection (4) states that civil nuclear commerce with 
India represents a significant change in U.S. policy toward 
countries not parties to the NPT and stresses that the NPT 
remains the foundation of the international non-proliferation 
regime. Several later provisions of this Act are intended to 
maintain the effectiveness of the NPT and the overall non-
proliferation regime. The first of these are subsections (5) 
and (6) of section 102.
    Subsections (5) and (6) state that it is the sense of 
Congress that:

          (5) any commerce in civil nuclear energy with India by the 
        United States and other countries must be achieved in a manner 
        that minimizes the risk of nuclear proliferation or regional 
        arms races and maximizes India's adherence to international 
        non-proliferation regimes, including, in particular, the 
        guidelines of the Nuclear Suppliers Group; and
          (6) the United States should not seek to facilitate or 
        encourage the continuation of nuclear exports to India by any 
        other party if such exports are terminated under United States 
        law.

    With regard to subsection (5), the committee commends the 
Government of India for issuing on February 1, 2006, its 
``Guidelines for Nuclear Transfers (Exports).''\42\ The 
committee further commends the Government of India for 
promulgating its WMD law, which was published in the summer of 
2005. The committee notes that, while the administration has 
referred to that law as a part of India's commitments under 
both the Joint Statement and the NSSP, that law was passed 
during the May 2005 NPT Review Conference (before the July 18 
Joint Statement) in fulfillment of India's obligation under 
U.N. Security Council Resolution 1540 (April 28, 2004). 
Similarly, Prime Minister Singh told the Indian parliament in 
August 2005 that there were no new Indian commitments contained 
in the July 18 Joint Statement, but only reaffirmations of 
positions established by the previous Indian government.\43\ 
The committee believes that the implementation and enforcement 
of India's export controls will constitute, as it would for any 
nation, a true test of its adherence to the NSG and MTCR 
guidelines.
---------------------------------------------------------------------------
    \42\No.AEA/27(1)/2005-ER, Government of India (Bharat Sarkar), 
Department of Atomic Energy (Parmanu Oorja Vibhag), Mumbai, the 
February 01, 2006, ``Resolution: Subject: Guidelines for Nuclear 
Transfers (Exports),'' available at http://www.dae.gov.in/sectt/im/
gazfeb06.htm.
    \43\August Reply.
---------------------------------------------------------------------------
    The task of minimizing the risk of regional arms races as a 
result of civil nuclear commerce will fall in large measure to 
the Government of India. Many critics have warned that this 
nuclear deal will permit, or even indirectly assist, India in 
producing more plutonium for its nuclear weapons program, and 
Indian officials have publicly stated that India will be able 
to produce as much fissile material for weapons purposes as it 
desires. At the same time, however, many have said that there 
is no reason why India would want to increase significantly its 
production of fissile material. The committee hopes that India 
will demonstrate needed restraint and not increase 
significantly its production of fissile material. If civil 
nuclear commerce were to be seen, some years from now, as 
having in fact contributed to India's nuclear weapons program, 
there could be severe consequences for the nuclear deal, for 
U.S.-Indian relations, and for the nuclear non-proliferation 
regime.
    An amendment proposed by Senator Obama, and accepted by 
voice vote, added subsection (6) of section 102. It expresses 
the concern of Congress that sanctions imposed under U.S. law 
not be undermined by other countries. The committee is 
particularly concerned that the United States not facilitate or 
encourage the continuation of nuclear exports to India if U.S. 
exports were to be terminated pursuant to section 129 of the 
Atomic Energy Act of 1954 (42 USC 2157) because India had 
resumed nuclear testing, abrogated or materially violated a 
safeguards agreement, or engaged in nuclear proliferation. The 
committee certainly does not expect any such actions to occur, 
but it has a duty to maintain the integrity of U.S. law if its 
expectations were to prove incorrect.

Section 103

    The Declaration of Policy provided in section 103 is 
particularly important, and several of the areas of policy 
highlighted in the provision are also addressed later in the 
Act.
    Subsection (1) of section 103 states that it shall be the 
policy of the United States ``to achieve as quickly as possible 
a cessation of the production by India and Pakistan of fissile 
materials for nuclear weapons and other nuclear explosive 
devices.'' The administration has recently stated that 
``International pressure over a period of decades has had only 
marginal impact on the attitudes of India and Pakistan 
concerning nuclear weapons.''\44\ The committee believes, 
however, that it is incumbent upon the United States to 
encourage India and Pakistan to reduce tensions in the nuclear 
sphere, as well as in other areas.
---------------------------------------------------------------------------
    \44\``Report on nuclear nonproliferation in South Asia for the 
period April 1, 2005 to March 31, 2006,'' June 26, 2006, report 
pursuant to section 620F(c) of the Foreign Assistance Act of 1961, as 
amended, PL 87-195.
---------------------------------------------------------------------------
    India and Pakistan have espoused a policy to achieve a 
``minimum credible deterrent,'' and India reiterated in the 
July 18, 2005 Joint Statement its support for a Fissile 
Material Cutoff Treaty (FMCT). There are nevertheless reasons 
to ensure that as nuclear trade, in particular trade in nuclear 
fuel, to India from other nations increases, the United States 
elevates the priority it has placed on South Asian arms control 
and regional nonproliferation initiatives. Critics have argued 
that foreign provision of nuclear fuel to India will increase 
India's ability to produce plutonium for nuclear weapons, 
either directly or at least by increasing the overall 
availability of nuclear fuel for India's reactors and thereby 
reducing the opportunity costs of plutonium production. Whether 
they are accurate or not, the United States has a national 
security interest in ensuring that civil nuclear commerce with 
India does not lead to a nuclear arms race.
    Secretary of State Rice testified before the committee 
that:

        . . . civil nuclear cooperation with India will not lead to an 
        arms race in South Asia. Nothing we or any other potential 
        international suppliers provide to India under this initiative 
        will enhance its military capacity or add to its military 
        stockpile. Moreover, the nuclear balance in the region is a 
        function of the political and military situation in the region. 
        We are far more likely to be able to influence those regional 
        dynamics from a position of strong relations with India and, 
        indeed, with Pakistan.\45\
---------------------------------------------------------------------------
    \45\April 5 Hearing.

---------------------------------------------------------------------------
    The Secretary has also argued that:

          India would never accept a unilateral freeze or cap on its 
        nuclear arsenal. We raised this with India, but India said that 
        its plans and policies must take into account regional 
        realities. No one can credibly assert that India would accept 
        what would amount to an arms control agreement that did not 
        include other key countries like China and Pakistan.\46\
---------------------------------------------------------------------------
    \46\Ibid.

    The committee accepts the Secretary's comments, but 
likewise believes that given the need to avoid even 
misperceptions that could lead to an arms race, the United 
States must now use the influence it has gained through efforts 
in both India and Pakistan, and with India in particular 
through its nuclear trade with that nation, to help them 
transition from nuclear build-ups to stability and arms 
reductions. This is nowhere more relevant than in the area of 
fissile material production.
    The Secretary also noted in testimony before the committee 
that ``India's incentives or disincentives. . . . to grow its 
nuclear weapons program, its strategic program, are more 
related to the . . . political/military conditions in the 
region, than to any quantity of available nuclear material. And 
the program for India has been restrained over the number of 
years. I think most people would argue that it's a relatively 
restrained, kind of, minimum-deterrent program.''\47\ The 
Secretary additionally answered that:
---------------------------------------------------------------------------
    \47\Ibid.

          India has some 50,000, give or take, tons of uranium 
        available to it in its reserves, and it would need a very small 
        percentage of that on the military nuclear side. . . . we do 
        not believe that the absence of uranium is really the 
        constraint on the nuclear weapons program. . . . the amount of 
        fuel that one would need to run a civil program for years and 
        years and years is far in excess of what India can mine 
        indigenously. So, we think the incentives, or the crunch, if 
        you will, is really on the civil side.\48\
---------------------------------------------------------------------------
    \48\April 5 Hearing.

    While it is true that only a small amount of fissile 
material is required to make a nuclear weapon, the fact is that 
fissile materials can be used both for weapons and for reactor 
fuel. The Secretary is right to suggest that India faces a 
supply problem, particularly given its expectations for growing 
its nuclear power sector. While it would be difficult to 
establish a causal relation between U.S. or foreign exports to 
India and a consonant increase in India's fissile materials 
production for nuclear weapons, the committee believes that 
U.S. nuclear trade with India must not even be seen as leading 
to any increase in India's fissile material stockpile. The U.S. 
must work to end, both in South Asia and everywhere, the 
production of fissile materials for nuclear weapons and other 
nuclear explosive devices, and an increase in such production 
in India would only hinder such efforts.
    Subsection (2) of section 103 states that it shall be the 
policy of the United States with respect to any peaceful atomic 
energy cooperation between the United States and India:

          to achieve as quickly as possible the Government of India's 
        adherence to, and cooperation in, the full range of 
        international non-proliferation regimes and activities, 
        including India's--
                  (A) full participation in the Proliferation Security 
                Initiative;
                  (B) formal commitment to the Statement of 
                Interdiction Principles;
                  (C) public announcement of its decision to conform 
                its export control laws, regulations, and policies with 
                the Australia Group and with the Guidelines, 
                Procedures, Criteria, and Controls List of the 
                Wassenaar Arrangement; and
                  (D) demonstration of satisfactory progress toward 
                implementing the decision described in subparagraph 
                (C).

    In his testimony before the committee in November 2005, 
Under Secretary Joseph stated that ``In our ongoing dialogues, 
we strongly encourage India to take additional steps to 
strengthen nonproliferation, such as joining PSI, and 
harmonizing its national control lists with those of the 
Australia Group and the Wassenaar Arrangement.''\49\ Under 
Secretary Burns stated at a press briefing on March 16, 2006, 
that ``India has also agreed to align itself with the other 
international regimes concerning proliferation--the Australia 
group, the Wassenaar arrangement.''\50\ The committee has seen 
no Indian statements, however, that would suggest any success 
in this regard.
---------------------------------------------------------------------------
    \49\November 2 Hearing.
    \50\``Ongoing Efforts To Implement the U.S.-India Civil Nuclear 
Agreement,'' press briefing by R. Nicholas Burns, Under Secretary of 
State for Political Affairs, March 16, 2006, available at http://
www.state.gov/r/pa/prs/ps/2006/63270.htm.
---------------------------------------------------------------------------
    While the committee notes India's commitments in the July 
18, 2005 Joint Statement to ``to secure nuclear materials and 
technology through comprehensive export control legislation and 
through harmonization and adherence to Missile Technology 
Control Regime (MTCR) and Nuclear Suppliers Group (NSG) 
guidelines,'' it nevertheless believes that India should be 
similarly involved in other multilateral nonproliferation and 
export control regimes, including the Wassenaar Arrangement 
(WA) and the Australia Group (AG). The committee notes that 
even as the administration proceeded to implement the July 18, 
2005 Joint Statement, and previously the NSSP, it sanctioned 
several Indian entities and persons for transfers of items to 
Iran under the authority of the Iran and Syria Nonproliferation 
Act (Public Law 106-178). On September 23, 2004, the 
administration sanctioned two Indian scientists for their 
activities in Iran,\51\ Dr. R. C. Surendar and Dr. Y. S. R. 
Prasad, both of whom have extensive ties to India's nuclear 
power sector. On December 21, 2005,\52\ the administration 
sanctioned Sabero Organic Chemicals Gujarat Ltd., and any 
successor, sub-unit, or subsidiary thereof, and Sandhya Organic 
Chemicals PVT Ltd., and any successor, sub-unit, or subsidiary 
thereof, both of India, and again, under the Iran and Syria 
Nonproliferation Act, for transfers of certain chemicals to 
Iran.
---------------------------------------------------------------------------
    \51\69 FR 58212.
    \52\70 FR 77441.
---------------------------------------------------------------------------
    Reacting to the 2005 sanctions, the Government of India 
stated:

          We . . . have seen reports about imposition of sanctions on 
        two Indian firms. . . . [and] the removal of sanctions on R. C. 
        Surendar vindicates [the] Government's position on this matter. 
        Since the imposition of sanctions in September 2004, [the 
        Indian] Government has maintained that this had no 
        justification. Accordingly, we had urged the U.S. Government to 
        review the issue and withdraw the sanctions. The Government 
        also reiterates that sanctions again Dr. Y.S.R Prasad should be 
        removed. The sanctions imposed by the U.S. Government on the 
        two Indian firms relate to transfer of some chemicals to Iran. 
        Our preliminary assessment is that the transfer of such 
        chemicals is not in violation of our regulations or our 
        international obligations. [The] Government of India's 
        commitment to prevent onward proliferation is second to none. 
        We have instituted a rigorous system of export controls and our 
        track record in this regard is well known. India is working 
        with the international community including with the U.S. as a 
        partner against proliferation. In this context the imposition 
        of sanctions by the U.S. on our firms, which in our view have 
        not acted in violation of our laws or regulations, is not 
        justified.\53\
---------------------------------------------------------------------------
    \53\``MEA Official Spokesperson's reaction to news reports about 
imposition of sanctions on two Indian firms under the U.S.-Iran 
Proliferation Act,'' New Delhi, December 28, 2005, available at http://
www.indianembassy.org/newsite/press--release/5.asp.

    The December 2005 sanctions for chemical transfers to Iran 
were for exports of chemicals which are controlled on the 
control list of the Australia Group. The committee notes 
India's statement that such transfers to Iran were ``not in 
violation of our regulations or our international obligations'' 
and believes that the United States must therefore continue to 
work to ensure that India does not undertake such transfers in 
the future, to Iran or any other dangerous regimes. This could 
best be done by working with India to secure its adherence to 
the AG Guidelines. That would make India a full partner in 
world-wide non-proliferation efforts, rather than a country 
that holds back from assuming that responsibility.
    Since India is now a producer of increasingly modern 
weapons systems, the committee believes that India should also 
bring its laws, regulations, and policies into conformity with 
the WA Guidelines. Joining the WA, or at a minimum adhering to 
Guidelines, is another commitment that most of the world's 
major powers have made, in the interests of world peace and 
stability.
    The committee has been routinely assured that India would 
join the administration's Proliferation Security Initiative 
(PSI). In November 2005, Under Secretary Joseph informed the 
committee that:

          The United States has encouraged India to join PSI, given its 
        geographic location along several key routes for proliferation 
        trafficking and its significant operational capabilities in the 
        region. Officials of the Government of India have told us that 
        they are continuing their internal review of PSI, including an 
        examination of the international and national legal 
        underpinnings for their possible participation in PSI. We are 
        hopeful that India will soon endorse PSI, and join the more 
        than 70 countries around the world--and United Nations 
        Secretary General Kofi Annan--that have expressed their support 
        for PSI.\54\
---------------------------------------------------------------------------
    \54\November 2 Hearing.

---------------------------------------------------------------------------
    Similarly, Secretary Rice stated in April 2006 that:

          India has stated that its participation remains under 
        consideration. India committed in 2005 to participate in the 
        PSI if it was able to join the Core Group of PSI participants 
        that had developed and agreed to the PSI Statement of 
        Principles, or if the Core Group was disbanded. In the summer 
        of 2005, the United States and its partners in the Core Group 
        agreed that the Core Group had served an important function in 
        the process of starting up the PSI, but was no longer necessary 
        and so was disbanded.
          More recently, India has linked its decision on PSI 
        participation to its concerns with recently agreed amendments 
        to the Convention on the Suppression of Unlawful Acts at Sea 
        (the SUA Convention).
          The United States position is that endorsement of the PSI 
        Statement of Interdiction Principles is a political commitment 
        carrying no legal rights or obligations. Therefore, the United 
        States does not accept India's linkage of the SUA Convention to 
        the PSI. As the PSI is a voluntary initiative, India is free to 
        choose to participate or not participate. We continue to 
        discuss this issue with India and encourage India's 
        participation.\55\
---------------------------------------------------------------------------
    \55\April 5 QFRs.

    The committee believes that India should participate 
actively in the PSI. India's apparent reticence to join other 
countries in this activity is unfortunate given the key role 
India could play regarding interdiction efforts in and around 
its territory.
    Subsections (3) and (4) of section 103 state that it shall 
be the policy of the United States with respect to any peaceful 
atomic energy cooperation between the United States and India:

          (3) to ensure that India remains in full compliance with its 
        non-proliferation, arms control, and disarmament agreements, 
        obligations, and commitments; [and]
          (4) to ensure that any safeguards agreement or additional 
        protocol thereto to which India is a party with the 
        International Atomic Energy Agency (IAEA) can reliably 
        safeguard any export or reexport to India of any nuclear 
        materials and equipment[.]

    Compliance with all of India's non-proliferation 
commitments, including those in the July 18, 2005 Joint 
Statement and the safeguards agreements it is negotiating with 
the IAEA, will be essential to the implementation of the U.S.-
India nuclear deal. The committee's policy concern in this 
regard leads later in the Act to significant reporting 
requirements in section 108. Equally important will be the 
assurance that IAEA safeguards provide against the diversion of 
foreign material, equipment or technology. The committee 
expects the administration to work diligently to ensure that 
India's agreements with the IAEA provide for both effective and 
permanent safeguards. This will lessen any need for additional 
U.S. monitoring and will also provide a necessary level of 
assurance regarding other countries' nuclear exports to India.
    Subsection (5) of section 103 makes it the policy of the 
United States to ensure that India meets all the requirements 
for nuclear cooperation laid out in section 123 a. of the 
Atomic Energy Act of 1954 (42 USC 2153), other than the 
requirement that India have full-scope safeguards.
    Subsections (6) and (7) of section 103 are of critical 
importance to the committee. They make it the policy of the 
United States in nuclear trade with India:

          (6) to act in a manner fully consistent with the Guidelines 
        for Nuclear Transfers and the Guidelines for Transfers of 
        Nuclear-Related Dual-Use Equipment, Materials, Software and 
        Related Technology developed by the multilateral Nuclear 
        Suppliers Group (NSG) and the rules and practices regarding NSG 
        decision-making; [and]
          (7) given the special sensitivity of equipment and 
        technologies related to the enrichment of uranium, the 
        reprocessing of spent nuclear fuel, and the production of heavy 
        water, to work with members of the Nuclear Suppliers Group, 
        individually and collectively, to further restrict the 
        transfers of such equipment and technologies, including to 
        India[.]

    The Nuclear Suppliers Group, although not an organization 
that can issue binding directives, is nonetheless one of the 
most effective elements of the nuclear non-proliferation 
regime. For a generation, U.S. Presidents have forged in this 
forum an important international consensus on the need to 
prevent nuclear proliferation by controlling the export of 
sensitive nuclear material, equipment and technology. The 
committee believes strongly that no bilateral objective, even 
the important objective of a new relationship with India, 
should be allowed to undermine the NSG's effectiveness. The 
United States must continue to abide by the NSG Guidelines, 
which it has worked so diligently to achieve. Equally, the 
United States must maintain the consensus decision mechanism of 
the NSG, and not look for any way around that requirement. The 
committee was pleased by the Secretary of State's assurances in 
this regard at the committee's hearing on April 5, 2006.
    The committee believes also that the United States must 
work with other nations to prevent the export of potentially 
harmful technologies. NSG Guidelines are not as strict as they 
ought to be regarding exports of enrichment and reprocessing 
equipment and technology, and the committee supports the 
administration's efforts to achieve consensus on tightening 
those Guidelines. In addition, the committee intends that the 
administration work with individual states to encourage them to 
refrain from sensitive exports.
    Subsections (8) and (9) of section 103 make it the policy 
of the United States in nuclear trade with India:

          (8) to maintain the fullest possible international support 
        for, adherence to, and compliance with the Nuclear Non-
        Proliferation Treaty; and
          (9) that exports of nuclear fuel to India should not 
        contribute to, or in any way encourage, increases in the 
        production by India of fissile material for non-civilian 
        purposes.

    Subsection (8) applies first and foremost to actions of the 
United States Government. In its implementation of civil 
nuclear commerce with India, the United States will have to 
take care to abide by Article I of the NPT, which requires each 
nuclear-weapon State Party to the Treaty ``not in any way to 
assist, encourage, or induce any non-nuclear weapon State to 
manufacture or otherwise acquire nuclear weapons or other 
nuclear explosive devices, or control over such weapons or 
explosive devices.''
    Critics have argued that the sale of nuclear reactor fuel, 
by supplementing India's limited domestic supply of refined 
uranium ore, will enable India to avoid having to choose 
between using its domestic uranium for power generation or for 
plutonium production. In this way, they argue, such sales by 
the United States (or by any other nuclear weapon state) will 
necessarily assist indirectly India's nuclear weapons program 
and, thus, violate Article I of the NPT.
    The administration rejects that argument and contends that 
India's plutonium production needs are a small proportion of 
its overall uranium requirements and, in any case, have always 
received first priority. The administration adds that India's 
safeguarded nuclear reactors have received foreign fuel several 
times in the years since India's first nuclear test, without it 
being alleged that such exports violated the NPT.
    The committee accepts the administration's argument in 
terms of history, but cautions that the impact, if any, of 
civil nuclear commerce on India's nuclear weapons program is an 
empirical question that will require attention in the years to 
come. India does not appear to have had to choose between civil 
and military uses of its uranium until recently, if at all, yet 
some Indian officials have warned of the need for such trade-
offs in coming years unless foreign reactor fuel can be 
obtained. If it should become evident that U.S. civil nuclear 
commerce with India is indirectly assisting India's nuclear 
weapons program by freeing up uranium for nuclear weapons 
purposes that would otherwise have been devoted to civil 
pursuits (or through technical transfer to India's 
unsafeguarded nuclear activities), then it would be incumbent 
upon the United States, under the NPT, to cease those 
contributing elements of its civil nuclear commerce with India. 
This requirement is stated more specifically in subparagraph 
(9) with respect to exports of nuclear reactor fuel to India. 
The requirement to cease any commerce that would otherwise 
violate Article I of the NPT is separate from and in addition 
to any requirements that might flow from other aspects of U.S. 
law, such as section 129 of the Atomic Energy Act of 1954.
    Subsection 8 is meant also as a reminder of the need to 
maintain support for the NPT world-wide. The committee does not 
believe that civil nuclear commerce with India will undermine 
world-wide support for the NPT or for nuclear non-proliferation 
in general. The United States must exercise continued 
leadership, however, to avert any such impact. If the NPT is to 
remain effective, the United States must make clear through its 
own actions that nuclear non-proliferation applies across the 
board, and not merely with respect to governments that the 
United States dislikes. The United States must also work 
diligently to ensure that other countries live up to their NPT 
(and NSG) obligations.

Section 104

    Section 104 of the committee's bill contains substantially 
the same waiver authority that the administration had requested 
from provisions in the Atomic Energy Act for nuclear trade with 
India, with a few differences.
    The existing and relevant provisions in the Atomic Energy 
Act--sections 123, 128 and 129--all have waiver or exemption 
authorities that could be used with respect to a future 123 
agreement with India.
    As stated above, S. 2429 contained a provision allowing the 
President to:

          . . . exempt a proposed agreement for cooperation with India 
        (arranged pursuant to section 123 of the Atomic Energy Act of 
        1954 (42 U.S.C. 2153)) from the requirement in section 
        123(a)(2) of the Atomic Energy Act of 1954, and such agreement 
        for cooperation shall be subject to the same congressional 
        review procedures under sections 123(b) and 123(d) of such Act 
        as an agreement for cooperation that has not been exempted from 
        any requirement contained in section 123(a) of such Act. . . .

    In explaining why the administration requested this 
authority, Secretary Rice stated that the desire was ``to treat 
nuclear cooperation with India similar to nuclear cooperation 
with various other trading partners''\56\ The Secretary also 
stated that:
---------------------------------------------------------------------------
    \56\April 5 Hearing.

          An additional factor involves the exception/waiver standard 
        under Sections 123, 128, and 129 of the AEA. The existing 
        standard is a determination by the Executive Branch that 
        failure to make the proposed exception/waiver would be 
        ``seriously prejudicial to the achievement of United States 
        nonproliferation objectives or otherwise jeopardize the common 
        defense and security.'' In our view, the decision to facilitate 
        nuclear cooperation with India should be based instead on the 
        nonproliferation measures that India committed to in the Joint 
        Statement, which are reflected in the required Presidential 
        determination under subsection 1(b) of S. 2429.\57\
---------------------------------------------------------------------------
    \57\Ibid.

    The committee notes that under existing law, an exempted 
agreement with India would require the affirmative assent of 
Congress before taking effect. At the time when such an exempt 
agreement is submitted to Congress, though, the President must 
determine that holding India to the statutory criteria would be 
``seriously prejudicial to achievement of United States non-
proliferation objectives or otherwise jeopardize the common 
defense and security.'' The President apparently cannot make 
such a determination for India at the present time, thus the 
Secretary's answer above.
    The committee concurs with the administration regarding the 
determination standard and the need for relief from the 
requirement. Instead of this rigid requirement, the committee's 
bill would allow the President to submit an exempt agreement 
with India without this determination. The committee notes, 
however, that while India's nonproliferation commitments are a 
basis for proceeding to cooperation in nuclear energy, the Act 
still requires the administration to coordinate and submit to 
Congress a Nuclear Proliferation Assessment (NPASS) under 
section 123. It is not clear that under the administration's 
proposed legislation an NPASS would be submitted to Congress.
    The administration also provided another basis for its 
decision to seek legislative relief from parts of section 123. 
The Secretary stated that the administration's language:

           . . . takes into account the difficulty of putting into 
        place all the pieces necessary for U.S.-India nuclear 
        cooperation--particularly, the U.S.-India agreement for 
        peaceful nuclear cooperation, the India-IAEA Safeguards 
        Agreement, and Nuclear Suppliers Group action to accommodate 
        nuclear trade with India--without knowing whether Congress, in 
        the end, would support the Initiative and vote affirmatively to 
        approve the agreement for peaceful nuclear cooperation. We 
        believe it is important that Congress participate as a partner 
        early in the process.\58\
---------------------------------------------------------------------------
    \58\Ibid.

    The committee agrees that there are many aspects of nuclear 
cooperation with India which require negotiation and formal 
decisions, and it is pleased to demonstrate at an early stage 
congressional support in principle for the U.S.-India nuclear 
deal. Under S. 2429, however, Congress would have been ``a 
partner early in the process,'' and only early in that process. 
Once a 123 agreement was submitted, Congress would have had 
only two options: enacting a resolution of disapproval (over a 
likely presidential veto); or allowing the agreement to enter 
into force after 90 days of continuous session. This procedure 
is followed under existing law only for 123 agreements that 
meet all the requirements of section 123 a. of the Atomic 
Energy Act. An agreement that does not meet the standards in 
section 123 a. cannot enter into force unless and until 
Congress passes a resolution of approval.
    Congress has not seen the text of the 123 agreement with 
India (which has yet to be negotiated and submitted to it), the 
new safeguards agreement that India is negotiating with the 
IAEA, or an NSG decision to permit civil nuclear commerce with 
India (which must be adopted by consensus of the NSG's 45 
Participating Governments). The committee believes that, in 
view of the many special circumstances surrounding the U.S.-
India 123 agreement and the importance of the agreements and 
decisions that must still be promulgated, the United States is 
better served if Congress maintains its existing role regarding 
123 agreements that do not meet the standards of section 123.
    Subsection 104(b) provides that an agreement for 
cooperation exempted by the President under subsection (a)(1) 
shall be subject to the second proviso of subsection d. of 
section 123 of the Atomic Energy Act. The purpose of the 
provision is to make plain that any agreement for nuclear 
cooperation with India may not enter into force until Congress 
approves, and the President signs, a joint resolution stating 
that Congress favors the agreement.
    Under current law, the President may waive any requirement 
of subsection a. of section 123 if he determines that inclusion 
of such requirement ``would be seriously prejudicial to the 
achievement of United States non-proliferation objectives or 
otherwise jeopardize the common defense and security.'' 
Subsection 104(a)(1) of the committee's bill gives the 
President an alternative waiver authority: to exempt the 
proposed agreement with India from the requirement of section 
123 a.(2) of the Atomic Energy Act, after submitting the 
determination specified in section 105 of the committee's bill. 
But the granting of this alternative authority does not alter 
or affect any other requirement of section 123, including the 
requirement that any agreement exempted from a requirement of 
subsection a. of section 123 be approved by Congress before it 
takes effect. Subsection (b) is designed to ensure that there 
is no legal ambiguity about the effect of subsection (a)(1).
    Section 104(a)(2) is identical to the provision in section 
1(a)(2) of S. 2429 regarding waiving the application of section 
128 of the Atomic Energy Act with respect to India. Section 128 
would have required that, as India will not maintain full-scope 
safeguards, the first license issued for any export to India be 
submitted to Congress for 60 days of continuous session, during 
which Congress could disapprove the export by joint resolution. 
Were Congress not to enact such a joint resolution, another 
export would have to be submitted to Congress a year later.
    The committee finds that the application of section 128 
would have achieved little in respect of true oversight, as 
enactment of a resolution of disapproval over a presidential 
veto would require a two-thirds vote in each house. The 
committee agrees with the administration, moreover, that the 
need to submit one export each year to Congress would inhibit 
U.S. companies in their efforts to obtain Indian contracts for 
nuclear equipment or fuel and to raise capital for major 
projects in India. The committee did include, in section 108, a 
provision requiring annual reporting on all nuclear export and 
re-export licenses to India.
    Section 104(a)(3) would allow the President to waive the 
application of section 129 of the Atomic Energy Act with 
respect to India, but differently than the administration's 
proposed such waiver. S. 2429 would have allowed the President 
to ``waive the application of any sanction under section 129 of 
the Atomic Energy Act of 1954 (42 U.S.C. 2158) with respect to 
India.'' The committee's recommended waiver authority is 
similar in effect to the waiver the administration requested in 
that it allows for nuclear cooperation with India in spite of 
India's weapons tests in 1974 and 1998 (129 (1)(A)), and its 
ongoing weapons activities (129 (1)(D)).
    For other conduct that, under section 129, would result in 
termination of cooperation, section 129 would continue to 
apply. Thus, if India were to terminate or abrogate IAEA 
safeguards (129(1)(B)); materially violate IAEA safeguards 
(129(1)(C)); violate an agreement for cooperation with the 
United States (129(2)(A)); encourage a non-nuclear weapon state 
to engage in proliferation activities involving source and 
special nuclear material (129(2)(B)); or engage in unauthorized 
proliferation of reprocessing technology (129(2)(C)), the 
committee's bill would terminate cooperation. The 
administration's bill would have made section 129 inapplicable 
to such future actions on the part of India.
    Section 104(a) also requires that the president submit the 
written determination and report contained in section 105 to 
the committee prior to his making use of the waivers in section 
104.

Section 105

    Section 105 specifies the terms of the determination that 
the President must make in order to take advantage of any of 
the waiver authorities afforded by section 104 of the Act. All 
of these requirements are rooted in the July 18, 2005 Joint 
Statement between President Bush and Indian Prime Minister 
Manmohan Singh. Section 105 provides that the determination 
shall be written, section 104 provides that it shall be 
submitted to the appropriate congressional committees (i.e., 
the Senate Foreign Relations Committee and the House 
International Relations Committee), and section 105 provides 
that it shall be accompanied by a report to those committees. 
The committee intends that the report contain the President's 
justification for making each element of the determination.
    Subsection (1) requires a presidential determination that 
India has provided to the IAEA and the United States a credible 
plan to separate its civil nuclear facilities, materials, and 
programs from its military facilities, materials, and programs. 
Credibility is a somewhat imprecise test, but it is one that 
the administration has used as a matter of policy and that it 
proposed for this element of the determination. The President 
must determine that India's separation plan is credible and 
provide a report on his reasons for that determination.
    The committee notes that while the Government of India has 
proposed in the Lok Sabha (India's lower house of parliament) a 
separation plan relating to nuclear facilities, and while a 
logical application of that plan to nuclear materials would 
include all materials used in or produced by such facilities, 
two aspects of the Indian separation plan are less clear: how 
it will apply to the production of nuclear materials for use in 
civil nuclear facilities; and how civil nuclear programs (as 
opposed to merely the facilities and nuclear materials 
associated with them) will be separated from military ones. The 
second version of the separation plan proposed in the Lok Sabha 
includes a list of ``upstream facilities'' that are declared as 
civil, but the President must determine whether this list 
provides a credible separation between civil and military 
facilities and streams of material.
    The President must also determine whether India has 
provided a credible plan for separation of its civil nuclear 
program from its military one. This requirement is rooted in 
the July 18, 2005 Joint Statement, in which India committed to 
``identifying and separating civilian and military nuclear 
facilities and programs.'' The committee notes that this could 
be a complicated enterprise, as the Government of India's 
separation plan states that grid connectivity will not 
determine whether a facility is civil or military and that an 
otherwise civil facility will be excluded from that list if it 
is located in a larger hub of strategic significance. This 
means that India's generation of electricity for civilian 
purposes will make use of both civil and military nuclear 
facilities. Some of its military reactors will be physically 
the same as its civil reactors, moreover, and there might be a 
temptation to use common personnel or logistics in the 
management and operation of those reactors. The committee 
believes, however, that a credible separation of nuclear 
programs would have to extend to such functions as management, 
operation, safety, personnel, finance and planning. The 
committee expects the President to examine these factors before 
determining that India has provided such a credible separation 
plan.
    Subsection 2 requires a presidential determination that 
India has filed a complete declaration regarding its civil 
nuclear facilities and materials with the IAEA. The Government 
of India has changed its separation plan once already, adding 
additional facilities and specifying which reactors will be 
declared civilian facilities. The committee recognizes that the 
choice of facilities to declare as civilian is a decision for 
India to make, and it fully expects that additional facilities 
will be added as India builds its civil nuclear power program. 
The word ``complete'' was included in subsection (2) not to 
imply finality in India's declaration, but rather to require 
the President to determine: (a) that the declaration is not in 
significant flux at the time of the determination; and (b) that 
India has not withheld from IAEA safeguards facilities that it 
has elsewhere declared as civilian.
    Subsection (3) requires a presidential determination that:

           . . . an agreement between India and the IAEA requiring the 
        application of safeguards in perpetuity in accordance with IAEA 
        standards, principles, and practices to civil nuclear 
        facilities, programs, and materials described in paragraph (2) 
        has entered into force and the text of such agreement has been 
        made available to the appropriate congressional committees.

    This subsection requires that the text of the India-IAEA 
safeguards agreement ``has been made available to the 
appropriate congressional committees'' because the 
determination detailed in section 105 will likely be submitted 
just before a peaceful nuclear cooperation agreement is 
submitted to Congress. Congress will consider the safeguards 
agreement integral to a peaceful nuclear cooperation agreement 
with India, as the administration has stated that IAEA 
safeguards are intended ``to help detect, and thereby help to 
prevent, the diversion to military use of any materials, 
technologies, or equipment provided to India's civil nuclear 
facilities.''\59\ In response to a Question for the Record from 
Chairman Lugar, Under Secretary Joseph stated: ``The safeguards 
must effectively cover India's civil nuclear fuel cycle and 
provide strong assurances to supplier states and the IAEA that 
material and technology provided or created through civil 
cooperation will not be diverted to the military sphere.''\60\
---------------------------------------------------------------------------
    \59\April 5 Hearing.
    \60\November 2 Hearing.
---------------------------------------------------------------------------
    Subsection (3) adds the words ``in perpetuity'' to the 
language proposed by the administration in section 1(b)(2) of 
S. 2429 because permanent safeguards are vital to any assurance 
that civil nuclear commerce with a facility will not assist 
India's nuclear weapons program. Safeguards in perpetuity are 
also key to not according India the status of a nuclear weapon 
state under the NPT, since only the NPT-recognized nuclear 
weapon states have heretofore been allowed to exclude (or 
selectively apply) the application of safeguards, in time or 
scope, to any facilities, materials and programs under their 
control. India will be allowed to determine which facilities 
are to be safeguarded, but will not be allowed later to remove 
those facilities from safeguards, as the recognized nuclear 
weapon states are permitted to do.
    The requirement that the President determine that India's 
safeguards agreement is ``in accord with IAEA standards, 
principles, and practices'' was proposed by a former State 
Department official as a means of assuring that the agreement 
creates a credible safeguards regime for India's declared civil 
nuclear facilities.\61\ The committee understands that India 
already has nuclear weapons and that no safeguards regime will 
keep India from maintaining or even increasing its stock of 
nuclear weapons. Article I of the NPT bars even indirect U.S. 
assistance to India's nuclear weapons program, however, so 
safeguards are needed to guard against any misuse of civil 
nuclear commerce for nuclear weapons purposes.
---------------------------------------------------------------------------
    \61\``The U.S.-Indian Civil Nuclear Deal,'' prepared testimony of 
Fred McGoldrick before the House International Relations Committee, May 
11, 2006, page 7.
---------------------------------------------------------------------------
    The separation plan proposed in its parliament by the 
Government of India speaks of ``India-specific safeguards,'' a 
concept that has not been further defined. The administration 
assured the committee that the United States intends that 
India's safeguards be of the sort that the IAEA would normally 
institute pursuant to a safeguards agreement with a state that 
has not agreed to full-scope safeguards, e.g., of the sort 
commonly governed by IAEA Information Circular (INFCIRC/) 66. 
The committee intends that subsection (3) require the President 
to determine that India's safeguards do, in fact, conform to 
INFCIRC/66. The committee notes that this is consistent with 
India's intent to maintain its Tarapur Power Reactor Fuel 
Reprocessing Plant under safeguards ``in the `campaign' mode,'' 
i.e., under safeguards only when the plant is processing spent 
fuel from a safeguarded facility.
    India's separation plan also speaks of a ``safeguards 
agreement . . . providing for corrective measures that India 
may take to ensure uninterrupted operation of its civilian 
nuclear reactors in the event of disruption of foreign fuel 
supplies.'' This concept also has not been defined further. The 
committee does not intend that the President be able to make 
the determination in subsection (3) if India's safeguards 
agreement allows it to remove a reactor or storage site from 
safeguards in order to use unsafeguarded nuclear fuel in that 
reactor or storage site. Rather, any fuel that is used in a 
safeguarded facility should itself become safeguarded in 
perpetuity, as well as the resulting spent fuel or other 
byproducts.
    Subsection (4) requires a presidential determination that 
India and the IAEA are making substantial progress toward 
implementing an Additional Protocol. The administration 
proposed a determination that they are making ``satisfactory'' 
progress, which the committee believes is too imprecise a test. 
The committee recognizes that Additional Protocol negotiations 
may not proceed in earnest until after the underlying 
safeguards agreement has been negotiated. As subsection (3) 
requires that the safeguards agreement has already entered into 
force, however, and as IAEA procedures for approval of 
safeguards agreements by its Board of Governors (BOG) generally 
impose a delay of several months between the completion of 
negotiations and entry into force, there should be ample time 
for negotiations on an Additional Protocol before the President 
will be in a position to submit the determination specified in 
this section of the Act. Subsection (4) does not require that 
India and the IAEA have completed negotiations on an Additional 
Protocol or already be implementing such Protocol. The 
committee intends the requirement of ``substantial progress'' 
to mean that negotiations are proceeding at a steady pace and 
that there is sufficient understanding of the language the 
Additional Protocol contains to be confident that the BOG will 
approve it.
    Subsection (5) requires a presidential determination that 
India is working with the United States to conclude a 
multilateral treaty on the cessation of the production of 
fissile materials for use in nuclear weapons or other nuclear 
explosive devices. For many years, negotiation and conclusion 
of a Fissile Material Cut-off Treaty (FMCT) has been a U.S. 
objective in the Conference on Disarmament (CD) in Geneva. The 
current administration has concluded that a verifiable FMCT is 
infeasible, however, and that the existing CD mandate to 
negotiate an effectively verifiable treaty is thus 
unacceptable. The CD has been unable to agree on a work 
program, moreover, as some other countries (notably China) have 
refused to approve the beginning of FMCT negotiations unless 
the CD also approved discussions of other issues, such as 
nuclear disarmament and banning weapons in outer space. Earlier 
this year, the United States presented a draft FMCT text and 
proposed a negotiating mandate that would not take a stand on 
whether the treaty need be verifiable.
    India has long supported conclusion of an effectively 
verifiable FMCT. This position reflects India's concern 
regarding fissile material production by its nuclear-armed 
neighbors, and it would be unrealistic to expect a precipitous 
change in India's position. The committee does intend, however, 
that subsection (5) require India to continue its support for 
an FMCT and not to prevent adoption of a negotiating mandate 
that leaves the issue of verification to be decided in the 
negotiations.
    Subsection (5) refers to a ``treaty,'' rather than to the 
FMCT. The committee adopted this language to allow for the 
possibility of a multilateral treaty other than a universal 
FMCT. An agreement might be pursued, for example, among the 7 
states known to have tested nuclear weapons or among the 
somewhat larger number known or believed to have produced 
nuclear weapons quantities of fissile material. If India were 
to work with the United States to conclude such a treaty, that 
would justify a presidential determination under subsection (5) 
even in the absence of FMCT efforts.
    Subsection (6) requires a presidential determination that 
India is supporting international efforts to prevent the spread 
of enrichment and reprocessing technology to any state that 
does not already possess full-scale, functioning enrichment or 
reprocessing plants. India's commitment in the July 18, 2005 
Joint Statement refers to ``refraining from transfer of 
enrichment and reprocessing technologies to states that do not 
have them.'' The committee believes that the language of 
subsection (6), which is drawn from the President's speech to 
the National Defense University of February 11, 2004, more 
precisely describes U.S. policy objectives and will not present 
any difficulty for India.
    Subsection (7) requires a presidential determination that:

          India has secured nuclear and other sensitive materials and 
        technology through the application of comprehensive export 
        control legislation and regulations, including through 
        effective enforcement actions, and through harmonization of its 
        control lists with, and adherence to, the guidelines of the 
        Missile Technology Control Regime and the Nuclear Suppliers 
        Group.

    This language tracks closely India's commitment in the July 
18, 2005 Joint Statement and section 1(b)(6) of the 
administration's proposed legislation. The committee added a 
reference to ``effective enforcement actions'' because it 
believes that laws and regulations go only so far. The real 
test is in implementation. The committee is confident that the 
Government of India will meet this test.
    Subsection (8) requires a presidential determination that:

           . . . the Nuclear Suppliers Group has decided to permit 
        civil nuclear commerce with India pursuant to a decision taken 
        by the Nuclear Suppliers Group that--
                  (A) was made by consensus; and
                  (B) does not permit nuclear commerce with any 
                nonnuclear weapon state other than India that 
                does not have IAEA safeguards on all nuclear materials 
                and all peaceful nuclear activities within the 
                territory of such state, under its jurisdiction, or 
                carried out under its control anywhere.

    The Nuclear Suppliers Group, with consistent American 
leadership over a generation, has played a major role in 
combating nuclear proliferation by encouraging states not to 
export nuclear technology, equipment and materials to non-
nuclear weapon states without strong safeguards against misuse 
of those exports. The committee believes strongly that it is 
critical to maintain the vitality and effectiveness of the NSG. 
This could be a challenge as the United States seeks an 
exception to the Guidelines for exports to India that will 
differ from the current NSG requirement for full-scope 
safeguards.
    The NSG, like many international organizations, makes 
decisions by consensus, rather than through a formal vote. 
Consensus decisions by the NSG's Participating Governments have 
strengthened international nuclear export controls and provided 
a forum in which the decisions of those governments to export 
nuclear materials and equipment are examined in light of the 
NSG Guidelines.
    The committee is concerned that some Participating 
Governments may enter into nuclear commerce with India that 
does not reflect rules laid out in the NSG Guidelines or that 
such export decisions may not reflect agreement among supplier 
states regarding whether India has met or is meeting its 
nonproliferation obligations and commitments, including those 
in the July 18, 2005 Joint Statement.
    One important means to maintain the role and effectiveness 
of the NSG will be to change the rules for India only in 
accordance with the NSG Guidelines and its procedures for such 
changes. Paragraph 17 of those Guidelines states: ``Unanimous 
consent is required for any changes in these Guidelines.''\62\ 
Subsection (8) therefore requires that the NSG decision 
regarding India be ``made by consensus.'' This is consistent 
with the intent of the administration, as indicated in a 
response by Secretary Rice to a Question for the Record from 
the Chairman, in which she refers to actions ``after a 
consensus decision is reached by the NSG to accommodate civil 
nuclear cooperation with India.''\63\
---------------------------------------------------------------------------
    \62\Note verbale to the IAEA, INFCIRC/254/Rev.8/Part 1, February 
2006, available at http://www.iaea.org/Publications/Documents/Infcircs/
2006/infcirc254r8p1.pdf.
    \63\April 5 Hearing.
---------------------------------------------------------------------------
    Likewise, the committee desires that the decisions of NSG 
Participating Governments regarding nuclear exports to India, 
or to any other nation be consistent with the consultative and 
nonproliferation commitments made by such states, in particular 
for any exports in ``sensitive cases,'' as noted in the 
``Consultations'' provisions at paragraph 16(b) of the NSG 
Guidelines.
    The NSG's decision on India should not erode its ability to 
maintain its basic Guidelines. Subsection (8)(B) is included, 
therefore, to ensure that the President must determine that the 
decision does not have the practical effect of permitting 
nuclear exports to other states without full-scope safeguards, 
even if it is worded in a manner that does not specify that 
such exports to India are acceptable.

Section 106

    Section 106 generally prohibits the transfer to India of 
enrichment, reprocessing, and heavy-water technologies. It 
allows such items to be sent to India only as part of efforts 
aimed at making such technologies proliferation-resistant, such 
as under the administration's Global Nuclear Energy Partnership 
(GNEP)\64\ or under an international fuel-cycle project 
approved by the IAEA. The provision is consistent with the 
administration's policy regarding the proliferation of 
enrichment and reprocessing (ENR) technologies and with the 
answers the committee received from various administration 
officials regarding their policy with respect to such transfers 
to India.
---------------------------------------------------------------------------
    \64\http://www.gnep.energy.gov/
---------------------------------------------------------------------------
    The committee believes that section 106 is necessary to 
ensure that no sensitive nuclear technologies related to the 
enrichment of uranium (which can be used to make highly-
enriched uranium for weapons), the reprocessing of spent 
nuclear fuel (which can provide plutonium for weapons), or the 
production of heavy water (heavy water-moderated reactors 
produce weapons-grade plutonium and tritium as a byproduct) are 
given to India, unless under international cooperation or as 
special, proliferation-resistant versions of these dual-use 
technologies.
    India currently produces heavy water, operates heavy-water 
moderated reactors, reprocesses spent nuclear fuel and has a 
limited uranium enrichment capability. Only a portion of 
India's facilities will be under IAEA safeguards, and sensitive 
nuclear technologies will reside in India in both safeguarded 
and un-safeguarded facilities. Consequently, the committee 
desires to ensure that the United States does not provide, even 
inadvertently, assistance to India that could further India's 
development of these technologies for non-civilian purposes. 
Such assistance could be viewed as a violation of U.S. 
obligations under Article I of the NPT.
    Subsection (a) provides a Sense of Congress on licensing 
policy that would apply generally to all exports and reexports 
authorized under 10 CFR Part 110 by the Nuclear Regulatory 
Commission (NRC) and under 10 CFR Part 810 by the Secretary of 
Energy. The provision states the sense of Congress that it is 
in the interest of the United States to permit the timely 
consideration of such license applications for the export and 
reexport to India of any nuclear materials and sensitive 
nuclear technology requiring such authorizations, to the extent 
that such exports and reexports are consistent with United 
States laws, regulations, and policies in effect at the time 
such export or reexport applications are to be considered. The 
committee intends that this provision not result in any change 
to the process that is required within the interagency for such 
licenses--procedures which were mandated in the NNPA.\65\
---------------------------------------------------------------------------
    \65\See Title III of Public Law 95-242, ``Export Organizations and 
Criteria,'' (42 USC 2155a et seq.).
---------------------------------------------------------------------------
    Subsection (b)(1) would prohibit the export or reexport to 
India of any equipment, materials, or technology related to the 
enrichment of uranium, the reprocessing of spent nuclear fuel, 
or to the production of heavy water. With respect to 
enrichment, materials, equipment and technology that are used 
for separating the isotopes of uranium or enriching uranium in 
the isotope 235 may not be exported to India, and no equipment 
or device, nor any important component or part especially 
designed for such equipment or such a device, may be exported 
to India, except as provided under subsection 106(b)(2). With 
respect to reprocessing, the provision would bar similar 
transfers to India of materials, equipment and technology that 
are particularly useful for the separation of actinides in 
spent nuclear fuel.
    The committee does not intend that the provision bar, in 
any manner, the export of reactor fuel to India, and does not 
interpret the inclusion of the term ``materials'' to prohibit 
such transfers.
    The prohibition is balanced with a narrow exception 
providing that such materials, equipment and technology may be 
approved to be exported or reexported to India if the end user:

                  (i) is a multinational facility participating in an 
                IAEA-approved program to provide alternatives to 
                national fuel cycle capabilities; or
                  (ii) is a facility participating in, and the export 
                or reexport is associated with, a bilateral or 
                multinational program to develop a proliferation-
                resistant fuel cycle; and
          (B) the President determines that the export or reexport will 
        not improve India's ability to produce nuclear weapons or 
        fissile material for military uses.

    On February 11, 2004, the President stated his policy: 
``The 40 nations of the Nuclear Suppliers Group should refuse 
to sell enrichment and reprocessing equipment and technologies 
to any state that does not already possess full-scale, 
functioning enrichment and reprocessing plants.''\66\ The 
President also noted that ``enrichment and reprocessing are not 
necessary for nations seeking to harness nuclear energy for 
peaceful purposes.''\67\ This is particularly true in the case 
of India and its potential use of enrichment technology. India 
has developed its nuclear fuel cycle around the use of natural 
uranium in heavy water reactors. For its few foreign-built 
light water reactors, India relies on foreign-supplied fuel, 
currently provided by Russia. The committee believes that 
enrichment technology transfers would most likely serve either 
to improve India's ability to enrich fuel for military purposes 
(as fuel for submarine reactors) or to create more 
sophisticated nuclear weapons.
---------------------------------------------------------------------------
    \66\NDU Speech.
    \67\Ibid.
---------------------------------------------------------------------------
    The administration also stated, in answers to the 
committee's questions, that it would not give enrichment, 
reprocessing or heavy-water technology to India. For example, 
in response to a Question for the Record in November 2005, 
Under Secretary Joseph clarified the meaning of the phrase 
``full civil nuclear energy'' in the July 18 Joint Statement:

          Chairman Lugar. The Joint Statement commits the United States 
        to ``full civil nuclear energy cooperation with India.'' As the 
        United States has different forms of nuclear energy cooperation 
        with many nations, differing even among NPT Parties, what is 
        the meaning of this phrase in relation to U.S. law and 
        regulation regarding nuclear commerce with India?

          Under Secretary Joseph. For the United States, ``full civil 
        nuclear cooperation'' with India means trade in most civil 
        nuclear technologies, including fuel and reactors. But we do 
        not intend to provide enrichment or reprocessing technology to 
        India. As the President said in February 2004, ``enrichment and 
        reprocessing are not necessary for nations seeking to harness 
        nuclear energy for peaceful purposes.'' We do not currently 
        provide enrichment or reprocessing equipment to any country.

          We will also need to ensure that any cooperation is fully 
        consistent with U.S. obligations under the NPT not to ``in any 
        way'' assist India's nuclear weapons program, and with 
        provisions of U.S. law.\68\
---------------------------------------------------------------------------
    \68\November 2 Hearing.

    Furthermore, both Under Secretary Joseph and Under 
Secretary Burns stated that the United States would not export 
---------------------------------------------------------------------------
enrichment and reprocessing to India:

          Chairman Lugar. Presuming Congressional approval of statutory 
        amendments and Nuclear Suppliers Group approval of an exception 
        to its Guidelines for India, when would the United States 
        Government begin to approve the export of nuclear items or 
        technical data to India, and what are those items or technical 
        data likely to be?

          Under Secretaries Burns and Joseph. We cannot say precisely 
        which nuclear technologies the U.S. (or other suppliers) would 
        export to India, except that we would exclude reprocessing and 
        enrichment technologies from our list.\69\
---------------------------------------------------------------------------
    \69\Ibid.

    Chairman Lugar also sought the administration's view of a 
provision in legislation that would prohibit such technologies 
---------------------------------------------------------------------------
from being exported to India:

          Chairman Lugar. Could you please provide me with your views 
        with regard to [a] distinction between India and NPT parties 
        that would provide different treatment in terms of the nuclear 
        exports for non-NPT parties, i.e. India would be eligible for 
        most U.S. exports except equipment, materials, or technology 
        related to enrichment, reprocessing, and heavy water 
        production[?]

          Under Secretary Joseph. We do not export enrichment or 
        reprocessing technology to any state. Therefore, ``full civil 
        nuclear cooperation'' with India will not include enrichment or 
        reprocessing technology. We have not yet determined whether 
        such a prohibition would extend to heavy water production.\70\
---------------------------------------------------------------------------
    \70\Ibid.

The committee notes that Under Secretary Joseph's answer did 
---------------------------------------------------------------------------
not oppose inclusion of such a provision in law.

    Regarding heavy-water production technologies, the Chairman 
sought further clarification from Secretary Rice in April 2006:

          Chairman Lugar. Has the administration determined whether or 
        not heavy water could be exported to India from the United 
        States?

          Secretary Rice. The U.S. does not foresee transferring heavy 
        water production equipment or technology to India, and the 
        draft bilateral peaceful nuclear cooperation agreement 
        accordingly makes no provisions for such transfers.\71\
---------------------------------------------------------------------------
    \71\April 5 QFRs.

    Thus, it was clearly stated, without any qualifications or 
reservations, that the United States would not export such 
technologies to India.
    The committee believes that section 106 would not inhibit, 
in any way, India's full participation in GNEP. As Secretary 
Rice stated:

          U.S. negotiators told India that India's decision not to 
        designate its fast breeder reactors and associated fuel cycle 
        research and development facilities as civil and place those 
        facilities under IAEA safeguards would preclude our ability to 
        collaborate on issues related to the fast burner reactors 
        contemplated under GNEP at this time. If India places breeder 
        reactors under safeguards in the future, the United States has 
        indicated that, as appropriate, it is willing to explore 
        potential areas for civil cooperation in this context.\72\
---------------------------------------------------------------------------
    \72\April 5 QFRs.

Section 107

    Section 107 of the Act contains broad requirements for an 
end-use monitoring program to be carried out with respect to 
U.S. exports and re-exports of nuclear materials, equipment, 
and technology sold, leased, exported, or reexported to India.
    Such a program can provide increased confidence in India's 
separation of its civilian from its military nuclear programs, 
facilities, materials and personnel, and also would further 
ensure United States compliance with Article I of the NPT. The 
provision, though, is not intended to ensure U.S. compliance, 
nor is it intended to reflect poorly on India's July 18, 2005 
Joint Statement commitments and its March and May 2006 
separation documents. Rather, the committee believes that the 
resulting and regular cooperation between U.S. regulatory 
agencies, in particular with the NRC, can provide a basis for 
even greater cooperation between the two nations.
    Section 107 provides a large degree of flexibility to the 
President. Paragraphs 107(b)(1) and (2) require sufficient 
measures to ensure that all the assurances and conditions of 
any licenses issued for exports and reexports to India by the 
NRC under 10 CFR Part 110, and by the Secretary of Energy 
pursuant to 10 CFR Part 810, are being met and complied with in 
India. Paragraph 107 (b)(2) would require that, with respect to 
any authorizations issued by the Secretary of Energy pursuant 
to section 57 b. of the Atomic Energy Act (42 USC 2077(b)),

          (A) the identified recipients of the nuclear technology are 
        authorized to receive the nuclear technology;
          (B) the nuclear technology identified for transfer will be 
        used only for peaceful safeguarded nuclear activities and will 
        not be used for any military or nuclear explosive purpose; and
          (C) the nuclear technology identified for transfer will not 
        be retransferred without the prior consent of the United 
        States, and facilities, equipment, or materials derived through 
        the use of transferred technology will not be transferred 
        without the prior consent of the United States.

    The committee notes that much of what is required by 
section 107 is already in place. Thus, there are provisions in 
the applicable regulations (10 CFR Part 110) dealing with end 
use assurances and certain diligence requirements on the 
applicant in situations having significant implications for 
public health and safety or the common defense and security. 
There are also reporting and information requirements in export 
or re-export authorizations.
    10 CFR Part 110.2 adds that section 123 agreements may 
require:

          an exchange of information on imports, exports, [and] 
        retransfers with foreign governments, peaceful end-use 
        assurances, and other conditions placed on the transfer of the 
        material or equipment.\73\
---------------------------------------------------------------------------
    \73\10 CFR 110.2.

    Similarly, both 10 CFR Part 810.6 and section 57 b. of the 
Atomic Energy Act stipulate that the Secretary of Energy must 
grant specific approval for certain activities, in particular 
those involving the production of special nuclear material 
outside the United States.\74\
---------------------------------------------------------------------------
    \74\See also 10 CFR 810.7 and 810.8.
---------------------------------------------------------------------------
    For authorizations of transfers and retransfers to India of 
U.S.-origin nuclear materials, equipment and technology, and in 
particular any sensitive nuclear technology, to India the 
committee believes that there is a special need for a program 
to ensure, as a requirement for all relevant U.S. regulatory 
agencies, that the conditions that relate to the scope of 
authorized activities and approved end users, under any form of 
authorization issued by such agencies, are met and recorded.
    These requirements could be met by implementing those 
measures already applied in respect of U.S.-China atomic energy 
cooperation under the 123 agreement with China.\75\ These 
requirements have resulted in record-keeping requirements, in 
particular for sensitive nuclear technology, to which IAEA 
safeguards would not apply.
---------------------------------------------------------------------------
    \75\Approved in Public Law 99-183 of December 16, 1985.
---------------------------------------------------------------------------
    Under Secretary Joseph testified before the committee that 
while the 123 agreement with India will not provide for full-
scope safeguards, it ``will allow for appropriate controls to 
help ensure that material or goods provided for civilian 
purposes remain within the civilian sector.''\76\ The committee 
is aware that for many years as a result of the enactment of 
section 123 a.(1) of the AEA, the United States has required 
that safeguards be maintained on U.S.-origin items exported to 
the cooperating party, even in the event that the IAEA cannot 
do so. This requirement for bilateral or ``fall-back'' 
safeguards enables such safeguards to truly exist in 
perpetuity. While the committee accepts that both IAEA and 
fall-back safeguards could safeguard nuclear materials in 
India's civilian program, there is no legal requirement for the 
IAEA to safeguard anything other than nuclear materials. 
Paragraphs 107(b)(3)(A) to (C) are designed to ensure that end-
use monitoring under fall-back safeguards would continue for 
U.S.-origin items.
---------------------------------------------------------------------------
    \76\November 2 Hearing.
---------------------------------------------------------------------------

Section 108

    Section 108 requires the President to provide important 
information to the Senate Foreign Relations Committee and the 
House International Relations Committee regarding the 
Government of India's fulfillment of its non-proliferation 
commitments. The committee commonly includes such requirements 
when it recommends approval of non-proliferation agreements.
    Subsection (a) of section 108 requires the President to 
keep the committees fully and currently informed of:

          (1) any material non-compliance on the part of the Government 
        of India with--
                  (A) the non-proliferation commitments undertaken in 
                the Joint Statement of July 18, 2005, between the 
                President of the United States and the Prime Minister 
                of India;
                  (B) the separation plan presented in the national 
                parliament of India on March 7, 2006, and in greater 
                detail on May 11, 2006;
                  (C) a safeguards agreement between the Government of 
                India and the IAEA;
                  (D) an Additional Protocol between the Government of 
                India and the IAEA;
                  (E) a peaceful nuclear cooperation agreement between 
                the Government of India and the United States 
                Government pursuant to section 123 of the Atomic Energy 
                Act of 1954 (42 U.S.C. 2153) or any subsequent 
                arrangement under section 131 of such Act (42 U.S.C. 
                2160);
                  (F) the terms and conditions of any approved 
                licenses; and
                  (G) United States laws and regulations regarding the 
                export or reexport of nuclear material or dual-use 
                material, equipment, or technology;
          (2) the construction of a nuclear facility in India after the 
        date of the enactment of this Act;
          (3) significant changes in the production by India of nuclear 
        weapons or in the types or amounts of fissile material 
        produced; and
          (4) changes in the purpose or operational status of any 
        unsafeguarded nuclear fuel cycle activities in India.

    Most of the reporting required by paragraph (a)(1) would 
relate to any material violation of India's nuclear non-
proliferation commitments. The committee certainly does not 
expect any such material violations to occur, but were there 
such a violation would be of serious concern and the two 
committees should be informed promptly. In some cases, such an 
occurrence would also trigger the termination of nuclear 
exports pursuant to section 129 of the Atomic Energy Act of 
1954.
    Subparagraph (a)(1)(G) relates not to an Indian non-
proliferation commitment, but rather to compliance with U.S. 
laws and regulations. Some experts have cited reasons to 
believe that the Government of India engages in covert 
procurement for its nuclear weapons program. If India were to 
do that in violation of U.S. laws and regulations, such 
activity would be of serious concern to the committee and would 
call into question the new bilateral relationship that 
underlies any agreement to resume civil nuclear commerce with 
India.
    Paragraphs (a)(2)-(4) relate to India's nuclear facilities 
under its separation plan and in a world where civil nuclear 
commerce with India is permitted. As India builds new nuclear 
facilities, the committee will want to be made aware of those 
facilities so that it can monitor their eventual use and 
whether they are declared as civil nuclear facilities. The 
committee does not expect frequent information on long-term 
construction projects, but does expect to be informed promptly 
when the United States learns about such projects and to be 
updated occasionally regarding their status.
    The committee will also want to be kept abreast of changes 
in India's use of its non-declared facilities. The Government 
of India's decision not to declare a nuclear facility as a 
civil facility does not necessarily mean that it will be used 
for military purposes. Indian officials made clear, in 
describing its separation plan, that India had excluded some 
power generation facilities merely because they were located in 
proximity to military facilities or because they represented 
advanced technology efforts that could eventually be used for 
either civil or military purposes. The actual use of non-
declared nuclear facilities will be a matter of continuing 
interest to the committee. So will any changes in India's 
production of nuclear weapons or of fissile materials for 
military purposes. As noted earlier, the committee hopes that 
India will continue to exercise great restraint in its nuclear 
weapons program, looking to a day when India and its nuclear-
armed neighbors can agree to stabilize or reduce their nuclear 
arsenals. If India were to significantly increase its nuclear 
weapons or fissile materials production, then the committee 
might well question whether civil nuclear commerce with India 
had become inimical to regional security and U.S. national 
security.
    Subsection (b) of section 108 requires the President to 
report annually to the committees regarding implementation of 
civil nuclear commerce with India and the Government of India's 
compliance with its non-proliferation commitments. The first 
report shall be submitted not later than 180 days after a 
peaceful nuclear cooperation agreement between the United 
States and India enters into force.
    Paragraph (b)(1) requires a description of any additional 
nuclear facilities and nuclear materials that the Government of 
India has placed or intends to place under IAEA safeguards. The 
Secretary of State testified to the committee on April 5, 2006, 
that ``India has agreed to place all future civil reactors--
both breeder and thermal--under permanent International Atomic 
Energy Agency (IAEA) safeguards'' and that up to 90 percent of 
India's reactors could be under safeguards in 15 years. At the 
same time, Indian officials have emphasized that all decisions 
regarding future reactors are for the Government of India to 
make and that, at least initially, no breeder reactors will be 
declared as civil nuclear facilities. The committee hopes that 
the availability of foreign reactor technology and nuclear fuel 
will lead India to put more and more reactors under permanent 
IAEA safeguards--including breeder reactors.
    Paragraph (b)(2) requires a listing of, and various 
information on, each license or other authorization for the 
export or reexport to India of nuclear materials and equipment. 
The committee understands that the data required by this 
paragraph are already collected routinely by the agencies that 
license nuclear exports.
    Paragraph (b)(3) requires that the annual report include:

          . . . any significant nuclear commerce between India and 
        other countries, including any such trade that--
                  (A) does not comply with applicable guidelines or 
                decisions of the Nuclear Suppliers Group; or
                  (B) would not meet the standards applied to exports 
                or reexports of such material, equipment, or technology 
                of United States origin.

    Administration officials have told the committee that 
although the United States will maintain its non-proliferation 
policies in its licensing decisions regarding exports or 
reexports to India, not all of those standards will be imposed 
by the Nuclear Suppliers Group regarding civil nuclear commerce 
with India. In particular, the administration says that the NSG 
will not require other countries to refrain from exporting 
equipment or technology relating to uranium enrichment or spent 
fuel reprocessing. NSG Guidelines are not formal requirements, 
moreover, so much as recommendations that NSG members and 
adherents are expected either to honor or to overrule only 
after consulting with other NSG members.
    As discussed in the summary of section 103, the committee 
believes that the United States should encourage other 
countries not to engage in especially sensitive exports to 
India, such as those relating to uranium enrichment or spent 
fuel reprocessing. The committee will be especially interested 
to learn, therefore, whether other countries are honoring the 
NSG Guidelines and whether they are approving exports to India 
that the United States would not have approved.
    Subparagraph (b)(4)(A) calls upon the President to certify, 
in this annual report, that India is in full compliance with 
its non-proliferation commitments and obligations, i.e., with 
its pledges cited in subparagraphs (A) through (F) of 
subsection (a)(1). The committee expects that the President 
will be able to make that annual certification.
    If the President cannot make the certification required in 
subparagraph (b)(4)(A), then subparagraph (b)(4)(B) requires 
the President to provide:

                   . . . an identification and assessment of all 
                compliance issues arising with regard to the adherence 
                by India to its commitments and obligations, 
                including--
                          (i) the steps the United States Government 
                        has taken to remedy or otherwise respond to 
                        such compliance issues;
                          (ii) the responses of the Government of India 
                        to such steps; and
                          (iii) an assessment of the implications of 
                        any continued noncompliance, including whether 
                        nuclear commerce with India, if not already 
                        terminated under section 129 of the Atomic 
                        Energy Act of 1954 (42 U.S.C. 2158), remains in 
                        the national security interest of the United 
                        States.

    As noted above, the committee does not expect that 
subparagraph (b)(4)(B) will ever have to be invoked. If that 
should occur, however, the committee will consider it a matter 
of utmost gravity. The decision to resume civil nuclear 
commerce with India is based upon America's trust that the 
Government of India will be fully committed to the cause of 
non-proliferation, despite the fact that it remains outside the 
NPT. Were that trust to be violated in a material way, the 
committee would have to ask itself, just as subparagraph (iii) 
asks the President, whether nuclear commerce with India 
remained in the national security interest of the United 
States.
    Paragraph (b)(5) requires that the annual report include a 
detailed description of:

                  (A) United States efforts to promote national or 
                regional progress by India and Pakistan in disclosing, 
                securing, capping, and reducing their fissile material 
                stockpiles, pending creation of a world-wide fissile 
                material cut-off regime, including the institution of a 
                Fissile Material Cut-off Treaty;
                  (B) the reactions of India and Pakistan to such 
                efforts; and
                  (C) assistance that the United States is providing, 
                or would be able to provide, to India and Pakistan to 
                promote the objectives in subparagraph (A), consistent 
                with its obligations under international law and 
                existing agreements.

    The committee believes strongly that the United States has 
a national security interest in ensuring that India and 
Pakistan's nuclear weapons are never used, and that their 
fissile material stockpiles remain secure from diversion and 
eventually are stabilized and then reduced. The committee urges 
the administration to make this a high and continuing priority, 
even in the absence of a Fissile Material Cut-off Treaty. The 
intent of the committee in mandating an annual report on U.S. 
efforts, including a description of assistance that the United 
States is prepared to offer to India and Pakistan (consistent 
with its NPT and other obligations), is to encourage sustained 
and creative approaches to achieving this important objective.
    Paragraph (b)(6) requires that the annual report include a 
description of U.S. efforts and progress toward the objective 
of achieving India's full participation in the Proliferation 
Security Initiative (PSI), formal commitment to the PSI 
Statement of Interdiction Principles, public announcement of 
its decision to conform its export control laws, regulations, 
and policies with the Australia Group and with the Guidelines, 
Procedures, Criteria, and Controls List of the Wassenaar 
Arrangement, and demonstration of satisfactory progress toward 
implementing that decision. The administration has assured the 
committee that it shares this objective and is pursuing it.
    The intent of the committee in mandating an annual report 
on U.S. efforts is to maintain attention to the objective that 
India become a participant in, or adherent to, the full range 
of non-proliferation regimes is that, were India to participate 
in the PSI and adhere to the Australia Group and Wassenaar 
Arrangement Guidelines, it would demonstrate--and receive due 
credit for--having the same broad commitment to non-
proliferation that other advanced states have undertaken.
    Subsection (c) of section 108 permits the annual report, 
after the initial report, to be submitted with an existing 
annual report on proliferation prevention. It also permits the 
President to submit the information required by paragraph 
(b)(5) with an existing annual report on progress toward South 
Asian regional non-proliferation. The committee's intent is to 
provide options to the Executive branch, not to dictate how the 
annual report will be submitted. The President may continue to 
submit a separate annual report, put it in the proliferation 
prevention report, or submit most of it in one of those ways 
and place the information required in paragraph (b)(5) in the 
South Asian non-proliferation report.
    Subsection (d) of section 108 requires that each report 
submitted under this section be submitted in unclassified form, 
but allows for a classified annex.

Section 109

    Section 109 provides that nothing in the Act may constitute 
authority for any action in violation of any obligation of the 
United States under the Nuclear Non-Proliferation Treaty.
    Secretary Rice has stated that

          While India has nuclear weapons and we must deal with this 
        fact in realistic, pragmatic manner, we do not recognize India 
        as a nuclear weapon state or seek to legitimize India's nuclear 
        weapons program.
          The 1968 Treaty on the Non-Proliferation of Nuclear Weapons 
        (NPT) defines a ``Nuclear Weapon State'' as ``one which has 
        manufactured and exploded a nuclear weapon or other nuclear 
        explosive device prior to January 1, 1967.'' India does not 
        meet this definition, and we do not seek to amend the Treaty to 
        provide otherwise. U.S. law adopts the NPT definition, so India 
        is a non-nuclear weapon state for purposes of U.S. law.\77\
---------------------------------------------------------------------------
    \77\April 5 QFRs.

    The committee is unaware of any formal compliance 
assessment done by the Department of State regarding U.S. NPT 
obligations and cooperation in atomic energy with India.
    The NPT has been the most successful multilateral 
nonproliferation treaty in history. It has, indeed, created an 
international norm against the spread of nuclear weapons, and 
its success has led to the adoption of other nonproliferation 
treaties, agreements, instruments, regimes, organizations and 
activities. The committee believes that the NPT has been and is 
the foundation of international nonproliferation. The 
administration has called the NPT:

           . . . one of the great success stories of arms control. It 
        has made major contributions to global security and economic 
        well being. It has been remarkably successful in achieving its 
        main goals and--with nearly 190 parties--has become the most 
        widely-adhered to arms control treaty in history. The NPT is an 
        indispensable tool in preventing the spread of nuclear 
        weapons.\78\
---------------------------------------------------------------------------
    \78\U.S. Department of State, Bureau of Nonproliferation, Fact 
Sheet: The Treaty on the Non-Proliferation of Nuclear Weapons: A Global 
Success (Jan. 20, 2001), available at http://www.state.gov/t/isn/trty/
16281.htm.

    President Bush has said that ``The NPT represents a key 
legal barrier to nuclear weapons proliferation and makes a 
critical contribution to international security. . . . The 
United States remains firmly committed to its obligations under 
the NPT.''\79\
---------------------------------------------------------------------------
    \79\The White House, President's Statement on Non-Proliferation of 
Nuclear Weapons Treaty (Mar. 7, 2005), available at http://
www.whitehouse.gov/news/releases/2005/03.
---------------------------------------------------------------------------
    The Committee on Foreign Relations reported the NPT to the 
Senate in 1968 and 1969.\80\ As the committee of the Senate 
with jurisdiction over international aspects of nuclear energy, 
including nuclear transfer policy,\81\ the committee believes 
there must be no infringement of any U.S. obligation under the 
NPT in any phase of renewed cooperation in atomic energy with 
India.
---------------------------------------------------------------------------
    \80\Executive Reports 90-2 and 91-1, September 27, 1968 and March 
6, 1969.
    \81\Clause (7) of Paragraph (j) (1) of Rule XXV of the Standing 
Rules of the Senate, available at http://rules.senate.gov/senaterules/
rule25.php.
---------------------------------------------------------------------------

Section 110

    Section 110 would render any determination under section 
105 and any waiver under section 104 ineffective if the 
President determines that India has detonated a nuclear 
explosive device after the date of the enactment of the Act.
    The committee notes that section 123 a.(4) of the Atomic 
Energy Act (42 USC 2153(a)(4)) requires any peaceful nuclear 
cooperation agreement with India to provide that, should India 
detonate a nuclear explosive device for any reason, the United 
States shall have the right to demand the return of ``any 
nuclear materials and equipment transferred pursuant'' to the 
agreement for cooperation as well as any ``special nuclear 
material produced through the use thereof if the cooperating 
party detonates a nuclear explosive device[.]'' The President 
may exempt an agreement from that requirement, but, as noted 
earlier, administration officials have informed the committee 
that they do not believe they could meet the legal standard for 
invoking such an exemption.
    The committee fully expects the administration to negotiate 
an agreement with India that meets the standard set out in 
section 123 a.(4) of the Atomic Energy Act, in particular since 
the administration's legislative proposal (S. 2429) contained 
no exemption for India from any requirement other than that for 
full-scope safeguards. Failure to meet this standard would make 
it difficult for the committee to favor any agreement with 
India, even if the exemption standard in section 123 were met.
    The committee notes that under the Act, U.S. nuclear 
cooperation with India would also be terminated should India 
detonate a nuclear explosive device, for any reason, as, under 
subparagraph 104(a)(3)(B) of the Act, section 129(1)(A) of the 
Atomic Energy Act fully applies to any detonation on or after 
July 18, 2005. Section 110 thus clarifies an issue that was 
more ambiguous in section 1(d) of S. 2429.
    The committee notes that, with regard to India's 1974 
detonation of a nuclear explosive device, the administration 
cannot state whether India violated its 1956 heavy water 
contract with the United States and its 1963 agreement for 
cooperation in atomic energy with the United States:

          After India detonated a nuclear device in 1974, the U.S. 
        Government examined whether India's actions were inconsistent 
        with a clause under the 1956 contract stating that the heavy 
        water would be used for ``research into and the use of atomic 
        energy for peaceful purposes.'' The outcome was that a 
        conclusive answer was not possible due to both the factual 
        uncertainty as to whether U.S.-supplied heavy water contributed 
        to the production of the plutonium used for the device and the 
        lack of a mutual understanding of scope of the 1956 contract 
        language.\82\
---------------------------------------------------------------------------
    \82\November 2 Hearing.

    The committee believes that there should be absolutely no 
ambiguity regarding the legal and policy implications of any 
future Indian nuclear detonation. The President must terminate 
all U.S.-origin exports and reexports of nuclear materials and 
equipment or sensitive nuclear technology to India, and the 
committee expects the President to make full and immediate use 
of U.S. rights to demand the return of all exports and 
reexports to India, if India tests or detonates, or otherwise 
causes the test or detonation of a nuclear explosive device, 
for any reason, including such instances in which India 
describes its actions as being ``for peaceful purposes.'' The 
committee believes that termination would include the 
suspension and revocation of any current or pending export or 
reexport licenses, and that the return of U.S.-origin items and 
materials should extend to any special nuclear material 
produced by India through the use of any nuclear materials and 
equipment or sensitive nuclear technology exported or 
reexported to India by the United States.

Section 111

    Section 111 of the Act states that ``Congress finds that 
India is not an MTCR adherent for the purposes of section 73 of 
the Arms Export Control Act (22 U.S.C. 2797b).''
    The committee included this provision to clarify the status 
accorded to India. Section 73 of the Arms Export Control Act 
(AECA) mandates sanctions on transfers of MTCR equipment or 
technology if the President determines that a foreign person 
knowingly exports, transfers, or otherwise engages in the trade 
of any MTCR equipment or technology that contributes to the 
acquisition, design, development, or production of missiles in 
a country that is not an MTCR adherent and would be, if it were 
United States-origin equipment or technology, subject to the 
jurisdiction of the United States under the AECA; or if a 
foreign person conspires to or attempts to engage in such 
export, transfer, or trade; or if a foreign person facilitates 
such an export, transfer, or trade by any other person; or if 
the President has made a determination with respect to a 
foreign person under section 11B(b)(1) of the Export 
Administration Act of 1979 (50 USC App. 2410b(b)(1)).
    Section 73 of AECA is, however, inapplicable to MTCR 
adherents if the export in question is ``any export, transfer, 
or trading activity that is authorized by the laws of an MTCR 
adherent, if such authorization is not obtained by 
misrepresentation or fraud'' or if the export, transfer, or 
trade of an item is to an end user in a country that is an MTCR 
adherent (section 73(b)). Section 73 also provides for the 
termination of sanctions when an MTCR adherent takes steps 
towards effective judicial enforcement against persons 
violating the prohibitions in section 73, if such actions are 
``comprehensive'' and are ``performed to the satisfaction of 
the United States'' and the findings of such proceedings are 
satisfactory to the United States (section 73(c)(1)(A) and (B) 
and section 73(c)(2)).
    When Congress created section 73, it did so specifically to 
make clear that a country will enjoy substantial protection 
from the MTCR sanctions law only if it specifically agrees not 
to transfer any missile-related equipment or technology that 
would be subject to U.S. jurisdiction under the AECA (if it 
were U.S.-origin equipment or technology). Any country that has 
not agreed to take this step--perhaps having only agreed to 
control production equipment, for instance--should be aware 
that it still may be sanctioned under the AECA even if it 
concludes a bilateral understanding with the United States.\83\
---------------------------------------------------------------------------
    \83\Conference Report to Accompany H.R. 3194, ``Making 
Appropriations for the Government of the District of Columbia and Other 
Activities Chargeable in Whole or in Part Against Revenues of Said 
District for the Fiscal Year Ending September 30, 2000, and for Other 
Purposes,'' p. 1076. Sec. 1136(c) of the Arms Control and 
Nonproliferation Act of 1999 (title XI of the Admiral James W. Nance 
and Meg Donovan Foreign Relations Authorization Act, Fiscal Years 2000 
and 2001 (H.R. 3427, which was enacted by reference in sec. 1000(a)(7) 
of Public Law 106-113; 113 Stat. 1536)).

    In April 2006, Chairman Lugar inquired of Secretary Rice 
whether India's July 18 Joint Statement commitment to harmonize 
and adhere to the MTCR guidelines would render it an adherent 
for the purposes of Section 73 such that missile sanctions 
would generally not apply in the future to India or to 
countries which sell missile technology to India. The Secretary 
found that ``India would not be considered an `MTCR Adherent' 
---------------------------------------------------------------------------
as defined under Section 73'' because:

          India has committed to unilaterally adhere to the Missile 
        Technology Control Regime (MTCR) Guidelines. The missile 
        sanctions law would generally still apply to a ``unilateral 
        adherent'' to the MTCR.
          Unilateral adherence to the MTCR Guidelines means that a 
        country makes a unilateral political commitment to abide by the 
        Guidelines and Annex of the MTCR. In particular, an MTCR 
        unilateral adherent commits to control exports of missile-
        related equipment and technology according the MTCR Guidelines, 
        including any subsequent changes to the MTCR Guidelines and 
        Annex. Inter alia, this means that MTCR unilateral adherent 
        countries need to have in place laws and regulations that 
        permit them to control the export of MTCR Annex equipment and 
        technology consistent with the MTCR Guidelines.
          An ``MTCR Adherent'' is a specially defined status in terms 
        of Section 73 of the Arms Export Control Act (also referred to 
        as the missile sanctions law). An ``MTCR Adherent,'' as defined 
        in Section 73 of the missile sanctions law, is a country that 
        ``participates'' in the MTCR or that, ``pursuant to an 
        international understanding to which the United States is a 
        party, controls MTCR equipment and technology in accordance 
        with the criteria and standards set forth in the MTCR.'' 
        India's ``unilateral adherence'' to the MTCR would not meet 
        this requirement.\84\
---------------------------------------------------------------------------
    \84\April 5 Hearing.

    Since India's unilateral adherence does not qualify it as 
an MTCR adherent under section 73 of AECA, the committee 
included section 111 to clarify this point. While the provision 
accomplishes this, it is also drafted in such a manner as to 
permit India, should it so decide in the future, to enjoy the 
benefits of AECA section 73 by becoming a full adherent to the 
MTCR. Because the provision states a factual finding by 
Congress, the provision would no longer have effect if India 
were to meet the requirements laid out as in Secretary Rice's 
answer. Under section 111, however, India's transfers of 
missile or missile-related equipment, technology and technical 
data, remain for now subject to U.S. sanctions if they should 
violate subsection 73(a) of AECA.

Section 112

    Section 112 is a technical amendment to section 1112(c)(4) 
of the Arms Control and Nonproliferation Act of 1999 to make 
clear that the Assistant Secretary of State for Verification 
and Compliance has responsibility, within the Department of 
State, for so much of the reports required by section 108 of 
the Act recommended by the committee as relates to verification 
or compliance matters. This is in keeping with existing law, 
which gives that official such responsibility for ``other 
reports being prepared by the Department of State . . . 
relating to . . . nonproliferation verification or compliance 
matters.''
    Earlier this year, the Department adjusted the 
responsibilities of the Assistant Secretary for Verification 
and Compliance and changed the position title to Assistant 
Secretary of State for Verification, Compliance, and 
Implementation. The committee intends and understands that all 
the authorities provided in section 1112 of the Arms Control 
and Nonproliferation Act of 1999 are now vested in the 
Assistant Secretary of State for Verification, Compliance, and 
Implementation.

Section 113

    Section 113 provides definitions of terms used throughout 
Title I of the Act.

                           IV. Cost Estimate

    Rule XXVI, paragraph 11(a) of the Standing Rules of the 
Senate requires that the committee reports on bills or joint 
resolutions contain a cost estimate for such legislation. The 
Committee on Foreign Relations reported this legislation on 
June 29, 2006, providing the Congressional Budget Office more 
than four weeks to provide this cost estimate. To date, the 
committee has not received the Congressional Budget Office's 
cost estimate.

                   V. Evaluation of Regulatory Impact

    In accordance with rule XXVI, paragraph 11(b) of the 
Standing Rules of the Senate, the committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out the provisions of S. 2429 under the committee's 
jurisdiction.
    The committee inquired with the administration which 
regulatory requirements would need changes in order to permit 
peaceful civilian atomic energy cooperation with India. The 
committee notes, as above, that there are many U.S. regulations 
and laws implicated in nuclear trade, including the Export 
Administration Act and the Export Administration Regulations; 
the Arms Export Control Act; the Atomic Energy Act and Parts 
110 and 810 of 10 CFR.
    In November of 2005, Chairman Lugar inquired ``What 
regulatory changes (beyond those already made under the Next 
Steps in Strategic Partnership or NSSP) would need to be made 
to implement full civil nuclear energy cooperation with 
India?'' The administration responded that:

          Many of the specifics of required regulatory changes to 
        implement full civil nuclear energy cooperation with India have 
        yet to be determined by the administration. U.S. regulations 
        that incorporate or reflect statutory language will need to be 
        modified or waived in order to permit civil nuclear cooperation 
        consistent with the Joint Statement, and will need to be 
        addressed along with modification or waiver of the related 
        statute. No Department of Commerce regulatory changes will be 
        required in order to implement full civil nuclear cooperation, 
        except as facilities are put under IAEA safeguards, they could 
        in principle be removed from the Entity List.\85\
---------------------------------------------------------------------------
    \85\November 2 QFRs.

    In April 2006, the Chairman requested that the committee be 
provided with a coordinated, interagency examination of all 
regulatory changes the administration would make to implement 
U.S.-Indian atomic energy cooperation if its exception to 
provisions of the Atomic Energy Act, as introduced in S. 2429, 
were enacted, and that such examination be particular with 
regard to any relevant portion of 10 CFR 110 and 810.
    Secretary Rice, for the administration, responded by 
stating:

          [We have] noted that the proposed legislation would change 
        the process of NRC licensing under 10 CFR 110.42(a)(6), which 
        currently requires full-scope safeguards as a condition of 
        issuing a license for export to a non-nuclear weapon state, 
        unless waived by the President, in which case the provisions of 
        Section 128 regarding congressional review would apply. The NRC 
        would presumably amend this regulation to reflect the new 
        legislation. Similarly, depending on the final wording of the 
        new legislation, the NRC might have to modify 10 CFR 110.46, 
        which would otherwise bar issuance of a license to a country 
        found by the President to have detonated a nuclear explosive 
        device, unless the President has waived the corresponding 
        provision of Section 129 of the AEA.
          Also . . . the consideration, evaluation, coordination and 
        reporting of DOE authorizations under 10 CFR Part 810 would not 
        be affected with respect to the range of cooperation provided 
        for under the proposed agreement for nuclear cooperation. To 
        the extent that an authorization under Part 810 involved 
        sensitive nuclear technology (SNT), the proposed legislation 
        (unlike current law) would not require full-scope safeguards as 
        a condition of supply. However, the proposed agreement for 
        peaceful nuclear cooperation will not provide for exports of 
        SNT; the agreement would have to be amended (and the amendment 
        submitted to Congress for review) to allow for such exports. 
        Depending on the final wording of the new legislation, DOE 
        might have to consider whether amendments to its regulations 
        would be required.
          The Department of Energy, the Nuclear Regulatory Commission, 
        and the Department of Commerce would conduct a thorough review 
        of their regulations to determine whether any changes would be 
        required if the proposed legislation became law.\86\
---------------------------------------------------------------------------
    \86\April 5 Hearing.

    The committee believes the Act reported in Title I largely 
conforms with S. 2429, and so presumes that most of the 
regulatory changes that would be implemented under the Act 
would be similar to those that would be required for S. 2429. 
The committee does not intend that section 106, which would bar 
the export of equipment, materials and technology related to 
the enrichment of uranium, and such items as are used in the 
production of heavy water, to result in regulatory amendments. 
The committee notes that, with regard to 10 CFR Part 810, the 
specific approval of the Secretary of Energy would already be 
required to engage in the production of special nuclear 
material outside the United States as India is a country listed 
in Part 810.8(a).
    Likewise, engaging in or providing assistance or training 
to any foreign country that involves facilities for the 
separation of isotopes of source material or special nuclear 
material (enrichment) and the chemical processing of irradiated 
special nuclear material (reprocessing) also would require a 
specific approval from the Secretary of Energy. While it is, of 
course, up to the Department of Energy to determine what it 
must do to implement the provisions of section 106, it would 
appear to the committee that no major rule need be made nor a 
substantial amendment to the existing rules since section 106's 
effect would be to instruct the Secretary not to approve such 
activities unless they met the requirements of subsection 
106(b)(2)(A)(i) and (ii) and the President was able to make a 
determination under subsection 106(b)(2)(B).
    Regarding the NRC regulations at 10 CFR Part 110, the NRC 
would already have to issue a specific license for any of the 
technology that is implicated in section 106, so is likely the 
NRC would similarly decline or reject such export and reexport 
applications, or approve them subject to 106(b). More 
generally, the NRC would likely have to revise the treatment 
extended to India, which is now listed on the Restricted 
Destination List at Part 110.29, thus also changing certain 
treatment that would be extended to export or reexport 
authorizations of both a general and specific nature to India.
    Section 107 of the Act, which requires an end use 
monitoring program to verify that all U.S. exports and 
reexports to India are used as strictly for peaceful purposes 
and as stipulated in the licensure of the relevant agencies. 
Section 107 could result in certain regulatory adjustments, but 
the committee does not intend that they would be major in scope 
since the provision should not result in additional duties on 
the applicants but rather on the regulatory agencies themselves 
to verify most of the diligence requirements and assurances 
already required on such licenses. This is true in particular 
because existing similar procedures for U.S. nuclear 
cooperation with China have not resulted in any regulatory 
amendments.
    Rule XXVI requires that the committee evaluate and include 
(A) an estimate of the numbers of individuals and businesses 
who would be regulated and a determination of the groups and 
classes of such individuals and businesses; (B) a determination 
of the economic impact of such regulation on the individuals, 
consumers, and businesses affected; (C) a determination of the 
impact on the personal privacy of the individuals affected; and 
(D), a determination of the amount of additional paperwork that 
will result from the regulations to be promulgated pursuant to 
the bill.
    The committee's recommended Title I provisions on U.S.-
India civilian nuclear commerce, as noted above, would 
implicate any person or entity seeking to export or re-export 
nuclear items to India subject to pertinent authorities 
(statutory and administrative) for which licenses are required. 
This would be the case with or without enactment of the Act, 
since such regulations will need to be modified in any case for 
such trade with India, and would apply to the information in 
Rule 26 (11)(b)(1) (B), (C) and (D). Therefore, pursuant to 
Rule 26 (11)(b)(2), the committee finds that it is impractical 
to include particular information regarding the regulatory 
impact at this time.
    Regarding Title II, the U.S. Additional Protocol 
Implementation Act, the committee included its regulatory 
impact assessment with S. 2489 when it reported that measure to 
the Senate.

                      VI. Changes in Existing Law

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman).

Arms Control and Nonproliferation Act of 1999

           *       *       *       *       *       *       *



                        Subtitle A--Arms Control


   CHAPTER 1--EFFECTIVE VERIFICATION OF COMPLIANCE WITH ARMS CONTROL 
AGREEMENTS

           *       *       *       *       *       *       *



SEC. 1112. ASSISTANT SECRETARY OF STATE FOR VERIFICATION AND 
                    COMPLIANCE.

    (a) Designation of Position.--The Secretary of State shall 
designate one of the Assistant Secretaries of State authorized 
by section 1(c)(1) of the State Department Basic Authorities 
Act of 1956 (22 U.S.C. 2651a(c)(1)) as the Assistant Secretary 
of State for Verification and Compliance. The Assistant 
Secretary shall report to the Under Secretary of State for Arms 
Control and International Security.
    (b) Directive Governing the Assistant Secretary of State.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this Act, the Secretary of State 
        shall issue a directive governing the position of the 
        Assistant Secretary.
          (2) Elements of the directive.--The directive issued 
        under paragraph (1) shall set forth, consistent with 
        this section--
                  (A) the duties of the Assistant Secretary;
                  (B) the relationships between the Assistant 
                Secretary and other officials of the Department 
                of State;
                  (C) any delegation of authority from the 
                Secretary of State to the Assistant Secretary; 
                and
                  (D) such matters as the Secretary considers 
                appropriate.
    (c) Duties.--
          (1) In general.--The Assistant Secretary shall have 
        as his principal responsibility the overall supervision 
        (including oversight of policy and resources) within 
        the Department of State of all matters relating to 
        verification and compliance with international arms 
        control, nonproliferation, and disarmament agreements 
        or commitments.
          (2) Participation of the assistant secretary.--
                  (A) Primary role.--Except as provided in 
                subparagraphs (B) and (C), the Assistant 
                Secretary, or his designee, shall participate 
                in all interagency groups or organizations 
                within the executive branch of Government that 
                assess, analyze, or review United States 
                planned or ongoing policies, programs, or 
                actions that have a direct bearing on 
                verification or compliance matters, including 
                interagency intelligence committees concerned 
                with the development or exploitation of 
                measurement or signals intelligence or other 
                national technical means of verification.
                  (B) Requirement for designation.--
                Subparagraph (A) shall not apply to groups or 
                organizations on which the Secretary of State 
                or the Undersecretary of State for Arms Control 
                and International Security sits, unless such 
                official designates the Assistant Secretary to 
                attend in his stead.
                  (C) National security limitation.--
                          (i) Waiver by president.--The 
                        President may waive the provisions of 
                        subparagraph (A) if inclusion of the 
                        Assistant Secretary would not be in the 
                        national security interests of the 
                        United States.
                          (ii) Waiver by others.--With respect 
                        to an interagency group or 
                        organization, or meeting thereof, 
                        working with exceptionally sensitive 
                        information contained in compartments 
                        under the control of the Director of 
                        Central Intelligence, the Secretary of 
                        Defense, or the Secretary of Energy, 
                        such Director or Secretary, as the case 
                        may be, may waive the provision of 
                        subparagraph (A) if inclusion of the 
                        Assistant Secretary would not be in the 
                        national security interests of the 
                        United States.
                          (iii) Transmission of waiver to 
                        congress.--Any waiver of participation 
                        under clause (i) or (ii) shall be 
                        transmitted in writing to the 
                        appropriate committees of Congress.
          (3) Relationship to the intelligence community.--The 
        Assistant Secretary shall be the principal policy 
        community representative to the intelligence community 
        on verification and compliance matters.
          (4) Reporting responsibilities.--The Assistant 
        Secretary shall have responsibility within the 
        Department of State for--
                  (A) all reports required pursuant to section 
                306 of the Arms Control and Disarmament Act (22 
                U.S.C. 2577);
                  (B) so much of the report required under 
                paragraphs (4) through (6) of section 403(a) of 
                the Arms Control and Disarmament Act (22 U.S.C. 
                2593a(a)(4) through (6)) as relates to 
                verification or compliance matters; [and]
                  (C) so much of the reports required under 
                section 108 of the United States-India Peaceful 
                Atomic Energy Cooperation Act as relates to 
                verification or compliance matters; and
                  [(C)] (D) other reports being prepared by the 
                Department of State as of the date of enactment 
                of this Act relating to arms control, 
                nonproliferation, or disarmament verification 
                or compliance matters.

           *       *       *       *       *       *       *



                                 ANNEX

                              ----------                              


I.--Joint Statement Between President George W. Bush and Prime Minister 
                             Manmohan Singh

                             For Immediate Release,
                             Office of the Press Secretary,
                                                      July 18, 2005
    Prime Minister Manmohan Singh and President Bush today 
declare their resolve to transform the relationship between 
their countries and establish a global partnership. As leaders 
of nations committed to the values of human freedom, democracy 
and rule of law, the new relationship between India and the 
United States will promote stability, democracy, prosperity and 
peace throughout the world. It will enhance our ability to work 
together to provide global leadership in areas of mutual 
concern and interest.
Building on their common values and interests, the two leaders resolve:
   To create an international environment conducive to 
        promotion of democratic values, and to strengthen 
        democratic practices in societies which wish to become 
        more open and pluralistic.

   To combat terrorism relentlessly. They applaud the 
        active and vigorous counterterrorism cooperation 
        between the two countries and support more 
        international efforts in this direction. Terrorism is a 
        global scourge and the one we will fight everywhere. 
        The two leaders strongly affirm their commitment to the 
        conclusion by September of a UN comprehensive 
        convention against international terrorism.

    The Prime Minister's visit coincides with the completion of 
the Next Steps in Strategic Partnership (NSSP) initiative, 
launched in January 2004. The two leaders agree that this 
provides the basis for expanding bilateral activities and 
commerce in space, civil nuclear energy and dual-use 
technology.
Drawing on their mutual vision for the U.S.-India relationship, and our 
        joint objectives as strong long-standing democracies, the two 
        leaders agree on the following:
FOR THE ECONOMY
   Revitalize the U.S.-India Economic Dialogue and 
        launch a CEO Forum to harness private sector energy and 
        ideas to deepen the bilateral economic relationship.

   Support and accelerate economic growth in both 
        countries through greater trade, investment, and 
        technology collaboration.

   Promote modernization of India's infrastructure as a 
        prerequisite for the continued growth of the Indian 
        economy. As India enhances its investment climate, 
        opportunities for investment will increase.

   Launch a U.S.-India Knowledge Initiative on 
        Agriculture focused on promoting teaching, research, 
        service and commercial linkages.

FOR ENERGY AND THE ENVIRONMENT
   Strengthen energy security and promote the 
        development of stable and efficient energy markets in 
        India with a view to ensuring adequate, affordable 
        energy supplies and conscious of the need for 
        sustainable development. These issues will be addressed 
        through the U.S.-India Energy Dialogue.

   Agree on the need to promote the imperatives of 
        development and safeguarding the environment, commit to 
        developing and deploying cleaner, more efficient, 
        affordable, and diversified energy technologies.

FOR DEMOCRACY AND DEVELOPMENT
   Develop and support, through the new U.S.-India 
        Global Democracy Initiative in countries that seek such 
        assistance, institutions and resources that strengthen 
        the foundations that make democracies credible and 
        effective. India and the U.S. will work together to 
        strengthen democratic practices and capacities and 
        contribute to the new U.N. Democracy Fund.

   Commit to strengthen cooperation and combat HIV/AIDs 
        at a global level through an initiative that mobilizes 
        private sector and government resources, knowledge, and 
        expertise.

FOR NON-PROLIFERATION AND SECURITY
   Express satisfaction at the New Framework for the 
        U.S.-India Defense Relationship as a basis for future 
        cooperation, including in the field of defense 
        technology.

   Commit to play a leading role in international 
        efforts to prevent the proliferation of Weapons of Mass 
        Destruction. The U.S. welcomed the adoption by India of 
        legislation on WMD (Prevention of Unlawful Activities 
        Bill).

   Launch a new U.S.-India Disaster Relief Initiative 
        that builds on the experience of the Tsunami Core 
        Group, to strengthen cooperation to prepare for and 
        conduct disaster relief operations.

FOR HIGH-TECHNOLOGY AND SPACE
   Sign a Science and Technology Framework Agreement, 
        building on the U.S.-India High-Technology Cooperation 
        Group (HTCG), to provide for joint research and 
        training, and the establishment of public-private 
        partnerships.

   Build closer ties in space exploration, satellite 
        navigation and launch, and in the commercial space 
        arena through mechanisms such as the U.S.-India Working 
        Group on Civil Space Cooperation.

   Building on the strengthened nonproliferation 
        commitments undertaken in the NSSP, to remove certain 
        Indian organizations from the Department of Commerce's 
        Entity List.

    Recognizing the significance of civilian nuclear energy for 
meeting growing global energy demands in a cleaner and more 
efficient manner, the two leaders discussed India's plans to 
develop its civilian nuclear energy program.
    President Bush conveyed his appreciation to the Prime 
Minister over India's strong commitment to preventing WMD 
proliferation and stated that as a responsible state with 
advanced nuclear technology, India should acquire the same 
benefits and advantages as other such states. The President 
told the Prime Minister that he will work to achieve full civil 
nuclear energy cooperation with India as it realizes its goals 
of promoting nuclear power and achieving energy security. The 
President would also seek agreement from Congress to adjust 
U.S. laws and policies, and the United States will work with 
friends and allies to adjust international regimes to enable 
full civil nuclear energy cooperation and trade with India, 
including but not limited to expeditious consideration of fuel 
supplies for safeguarded nuclear reactors at Tarapur. In the 
meantime, the United States will encourage its partners to also 
consider this request expeditiously. India has expressed its 
interest in ITER and a willingness to contribute. The United 
States will consult with its partners considering India's 
participation. The United States will consult with the other 
participants in the Generation IV International Forum with a 
view toward India's inclusion.
    The Prime Minister conveyed that for his part, India would 
reciprocally agree that it would be ready to assume the same 
responsibilities and practices and acquire the same benefits 
and advantages as other leading countries with advanced nuclear 
technology, such as the United States. These responsibilities 
and practices consist of identifying and separating civilian 
and military nuclear facilities and programs in a phased manner 
and filing a declaration regarding its civilians facilities 
with the International Atomic Energy Agency (IAEA); taking a 
decision to place voluntarily its civilian nuclear facilities 
under IAEA safeguards; signing and adhering to an Additional 
Protocol with respect to civilian nuclear facilities; 
continuing India's unilateral moratorium on nuclear testing; 
working with the United States for the conclusion of a 
multilateral Fissile Material Cut Off Treaty; refraining from 
transfer of enrichment and reprocessing technologies to states 
that do not have them and supporting international efforts to 
limit their spread; and ensuring that the necessary steps have 
been taken to secure nuclear materials and technology through 
comprehensive export control legislation and through 
harmonization and adherence to Missile Technology Control 
Regime (MTCR) and Nuclear Suppliers Group (NSG) guidelines.
    The President welcomed the Prime Minister's assurance. The 
two leaders agreed to establish a working group to undertake on 
a phased basis in the months ahead the necessary actions 
mentioned above to fulfill these commitments. The President and 
Prime Minister also agreed that they would review this progress 
when the President visits India in 2006.
    The two leaders also reiterated their commitment that their 
countries would play a leading role in international efforts to 
prevent the proliferation of weapons of mass destruction, 
including nuclear, chemical, biological and radiological 
weapons.
    In light of this closer relationship, and the recognition 
of India's growing role in enhancing regional and global 
security, the Prime Minister and the President agree that 
international institutions must fully reflect changes in the 
global scenario that have taken place since 1945. The President 
reiterated his view that international institutions are going 
to have to adapt to reflect India's central and growing role. 
The two leaders state their expectations that India and the 
United States will strengthen their cooperation in global 
forums.
    Prime Minister Manmohan Singh thanks President Bush for the 
warmth of his reception and the generosity of his hospitality. 
He extends an invitation to President Bush to visit India at 
his convenience and the President accepts that invitation.

                              ----------                              


         II.--Statement on Civil Nuclear Cooperation With India

1.At the ____________ Plenary meeting on ____________ the 
    Participating Governments of the Nuclear Suppliers Group 
    agreed that they:

  a.Desire to contribute to an effective non-proliferation 
        regime, and to the widest possible implementation of 
        the objectives of the Treaty on the Non-Proliferation 
        of Nuclear Weapons;

  b.Seek to limit the further spread of nuclear weapons;

  c.Wish to pursue mechanisms to affect positively the conduct 
        of those outside the Treaty;

  d.Seek to promote international cooperation in the research, 
        development and the safe use of nuclear energy for 
        peaceful purposes; and

  e.Recognize the promise of nuclear power in India as a clean 
        source of energy for sustained economic growth and 
        prosperity.

2.In this respect, Participating Governments have taken note of 
    steps that India has taken to contribute to the non-
    proliferation regime and they welcome India's efforts with 
    respect to the following commitments and actions:

  a.Has publicly designated civil nuclear facilities which will 
        be submitted to IAEA safeguards in perpetuity;

  b.Has committed to continue its moratorium on nuclear 
        testing, and to work with others towards achievement of 
        a Fissile Material Cutoff Treaty;

  c.Has committed to sign and adhere to an Additional Protocol 
        covering designated civil nuclear facilities;

  d.Has committed to support international efforts to restrain 
        the spread of sensitive nuclear technologies;

  e.Has adopted a national export control system capable of 
        effectively controlling transfers of multilaterally 
        controlled nuclear and nuclear-related material, 
        equipment and technology;

  f.Has committed to adhere to the Nuclear Supplier Group 
        Guidelines.

3.For these reasons, Participating Governments have adopted the 
    following policy on civil nuclear cooperation by 
    Participating Governments with the peaceful safeguarded 
    Indian civil nuclear power program.

4.Notwithstanding paragraphs 4(a), 4(b) and 4(c), of INFCIRC/
    254/Part 1 as revised (the NSG Guidelines), Participating 
    Governments may transfer trigger list items and/or related 
    technology for use in civil nuclear facilities in India, in 
    accordance with paragraph 4(d) as long as the 
    [Participating Government] intending to make the transfer 
    is satisfied that India is continuing to meet all of the 
    aforementioned non-proliferation and safeguards 
    commitments, and that the contemplated transfer complies 
    with all of the other conditions of the NSG Guidelines.

5.Participating Governments, in accordance with paragraph 4(d), 
    of the NSG Guidelines, will continue to strive for the 
    earliest possible implementation of the policy referred to 
    in paragraph 4(a) with respect to transfers of trigger list 
    items and related technology to India.

6.The NSG Point of Contact is requested to submit this 
    Statement to the IAEA Director General with a request that 
    he circulate it to all Member States.

                              ----------                              


  III.--Implementation of the India--United States Joint Statement of 
                 July 18, 2005: India's Separation Plan


                             MARCH 2, 2006

    The resumption of full civilian nuclear energy cooperation 
between India and the United States arose in the context of 
India's requirement for adequate and affordable energy supplies 
to sustain its accelerating economic growth rate and as 
recognition of its growing technological prowess. It was 
preceded by discussions between the two Governments, 
particularly between President Bush and Prime Minister Manmohan 
Singh, of the global energy scenario and the long-term 
implications of increasing pressure on hydrocarbon resources 
and rising oil prices. These developments led to the 
announcement in April 2005 of an Indo-U.S. Energy Dialogue that 
encompassed the entire spectrum of energy options ranging from 
oil and gas to coal, alternative fuels and civilian nuclear 
energy. Through the initiation of a sustained dialogue to 
address energy security concerns, the two countries sought to 
promote stable, efficient, predictable and cost effective 
solutions for India's growing requirements. At the same time, 
they also agreed on the need to develop and deploy cleaner, 
more efficient, affordable and diversified energy technologies 
to deal with the environmental implications of energy 
consumption. India had developed proven and wide-ranging 
capabilities in the nuclear sector, including over the entire 
nuclear fuel cycle. It is internationally recognized that India 
has unique contributions to make to international efforts 
towards meeting these objectives. India has become a full 
partner in ITER, with the full support of the U.S. and other 
partners. India also accepted the U.S. invitation to join the 
initiative on Clean Development Partnership.
    2. Noting the centrality of civilian nuclear energy to the 
twin challenges of energy security and safeguarding the 
environment, the two Governments agreed on 18 July 2005 to 
undertake reciprocal commitments and responsibilities that 
would create a framework for the resumption of full cooperation 
in this field. On its part, the United States undertook to:

   Seek agreement from the Congress to adjust U.S. laws 
        and policies to achieve full civil nuclear energy 
        cooperation.

   Work with friends and allies to adjust international 
        regimes to enable full civil nuclear energy cooperation 
        and trade with India, including but not limited to 
        expeditious consideration of fuel supplies for 
        safeguarded nuclear reactors at Tarapur.

   In the meantime, encourage its partners to consider 
        fuel supply to Tarapur expeditiously.

   To consult with its partners to consider India's 
        participation in ITER.

   To consult with other participants in the 
        Generation-IV International Forum with a view towards 
        India's inclusion.

    3. India had conveyed its readiness to assume the same 
responsibilities and practices and acquire the same benefits 
and advantages as other leading countries with advanced nuclear 
technology, such as the United States. Accordingly, India for 
its part undertook the following commitments:

   Identifying and separating civilian and military 
        nuclear facilities and programmes in a phased manner.

   Filing a declaration regarding its civilian 
        facilities with the IAEA.

   Taking a decision to place voluntarily its civilian 
        nuclear facilities under IAEA safeguards, and

   Signing and adhering to an Additional Protocol with 
        respect to civilian nuclear facilities.

    4. Other commitments undertaken by India have already been 
fulfilled in the last year. Among them are:

   India's responsible non-proliferation record, 
        recognized by the U.S., continues and is reflected in 
        its policies and actions.

   The harmonization of India's export controls with 
        NSG and MTCR Guidelines even though India is not a 
        member of either group. These guidelines and control 
        lists have been notified and are being implemented.

   A significant upgrading of India's non-proliferation 
        regulations and export controls has taken place as a 
        result of the Weapons of Mass Destruction Act of May 
        2005. Inter-Ministerial consultations are ongoing to 
        examine and amend other relevant Acts as well as 
        framing appropriate rules and regulations.

   Refrain from transfer of enrichment and reprocessing 
        technologies to states that do not have them and 
        supporting international efforts to limit their spread. 
        This has guided our policy on non-proliferation.

   Continued unilateral moratorium on nuclear testing, 
        and

   Willingness to work with the United States for the 
        conclusion of a multilateral Fissile Material Cut-off 
        Treaty.

    5. The Joint Statement of July 18, 2005, recognized that 
India is ready to assume the same responsibilities and 
practices as other leading countries with advanced nuclear 
technology, such as the United States. India has an impeccable 
record in non-proliferation. The Joint Statement acknowledges 
that India's nuclear programme has both a military and a 
civilian component. Both sides had agreed that the purpose was 
not to constrain India's strategic programme but to enable 
resumption of full civil nuclear energy cooperation in order to 
enhance global energy and environmental security. Such 
cooperation was predicated on the assumption that any 
international civil nuclear energy cooperation (including by 
the U.S.) offered to India in the civilian sector should, 
firstly, not be diverted away from civilian purposes, and 
secondly, should not be transferred from India to third 
countries without safeguards. These concepts will be reflected 
in the Safeguards Agreement to be negotiated by India with 
IAEA.

    6. India's nuclear programme is unique as it is the only 
state with nuclear weapons not to have begun with a dedicated 
military programme. It must be appreciated that the strategic 
programme is an offshoot of research on nuclear power programme 
and consequently, it is embedded in a larger undifferentiated 
programme. Identification of purely civilian facilities and 
programmes that have no strategic implications poses a 
particular challenge. Therefore, facilities identified as 
civilian in the Separation Plan will be offered for safeguards 
in phases to be decided by India. The nature of the facility 
concerned, the activities undertaken in it, the national 
security significance of materials and the location of the 
facilities are factors taken into account in undertaking the 
separation process. This is solely an Indian determination.

    7. The nuclear establishment in India not only built 
nuclear reactors but promoted the growth of a national 
industrial infrastructure. Nuclear power generation was 
envisaged as a three-stage programme with PHWRs chosen for 
deployment in the first stage. As indigenous reactors were set 
up, several innovative design improvements were carried out 
based on Indian R&D and a standardized design was evolved. The 
research and technology development spanned the entire spectrum 
of the nuclear fuel cycle including the front end and the back 
end. Success in the technologies for the back end of the fuel 
cycle allowed us to launch the second stage of the programme by 
constructing a Fast Breeder Test Reactor. This reactor has 
operated for 20 years based on a unique carbide fuel and has 
achieved all technology objectives. We have now proceeded 
further and are constructing a 500 MWe Prototype Fast Breeder 
Reactor. Simultaneously, we have launched design and 
development of reactors aimed at thorium utilization and 
incorporating inherent safety features.

    8. Concepts such as grid connectivity are not relevant to 
the separation exercise. Issues related to fuel resource 
sustainability, technical design and economic viability, as 
well as smooth operation of reactors are relevant factors. This 
would necessitate grid connectivity irrespective of whether the 
reactor concerned is civilian or not civilian.

    9. It must be recognized that the Indian nuclear programme 
still has a relatively narrow base and cannot be expected to 
adopt solutions that might be deemed viable by much larger 
programmes. A comparison of the number of reactors and the 
total installed capacity between India and the P-5 brings this 
out graphically:



------------------------------------------------------------------------
                                                      Total installed
     Country             Number of reactors              capacity
------------------------------------------------------------------------
India                                        15   3.04 GWe (2.8% of the
                                                   total production)
------------------------------------------------------------------------
USA                       104 (103 operational)   99.21 GWe (19.9% of
                                                   the total production)
------------------------------------------------------------------------
France                                       59   63.36 GWe (78.1% of
                                                   the total production)
------------------------------------------------------------------------
UK                                           23   11.85 GWe (19.4% of
                                                   the total production)
------------------------------------------------------------------------
Russia                                       31   21.74 GWe (15.6% of
                                                   the total production)
------------------------------------------------------------------------
China                                         9   6.602 GWe (2.2% of the
                                                   total production)
------------------------------------------------------------------------
Source: Nuclear Energy Institute, Washington DC


    10. Another factor to be taken into account is the small 
capacity of the reactors produced indigenously by India, some 
of which would remain outside safeguards. Therefore, in 
assessing the extent of safeguards coverage, it would be 
important to look at both the number of reactors and the 
percentage of installed capacity covered. An average Indian 
reactor is of 220 MW and its output is significantly smaller 
than the standard reactor in a P-5 economy. The chart below 
illustrates this aspect:


------------------------------------------------------------------------
       Country           Most Common Reactor     Number of Such Reactors
------------------------------------------------------------------------
India                 PHWRs 220 MWe             12
------------------------------------------------------------------------
USA                   69 PWRs and 34 BWRs.      51 Reactors in the range
                       Most plants are in the    of 1000 MWe to 1250 MWe
                       range of 1000-1250 MWe
------------------------------------------------------------------------
France                PWRs of 900 MWe and 1300  34 PWRs of 900 MWe and
                       MWe size                  20 PWRs of 1300 MWe
------------------------------------------------------------------------
UK                    No standard size. AGR is  14 AGRs
                       the most common in the
                       range of 600-700 MWe
------------------------------------------------------------------------
Russia                3rd Generation VVER-1000  9 3rd Generation VVER-
                       PWRs and RBMK 1000        1000 PWRs and 11 RBMK
                       Light Water Graphite      1000 Light Water
                       Reactors                  Graphite Reactors
------------------------------------------------------------------------
China                 PWRs 984 MWe              Four
------------------------------------------------------------------------
Source: Uranium Information Centre, Melbourne

    11. The complexity of the separation process is further 
enhanced by the limited resources that India has devoted to its 
nuclear programme as compared to P-5 nations. Moreover, as 
India expands international cooperation, the percentage of its 
thermal power reactor installed capacity under safeguards would 
rise significantly as fresh capacity is added through such 
cooperation.

    12. India's approach to the separation of its civilian 
nuclear facilities is guided by the following principles:

   Credible, feasible and implementable in a 
        transparent manner;

   Consistent with the understandings of the 18 July 
        Statement;

   Consistent with India's national security and R&D 
        requirements as well as not prejudicial to the three-
        stage nuclear programme in India;

   Must be cost effective in its implementation; and

   Must be acceptable to Parliament and public opinion.

    13. Based on these principles, India will:

   Include in the civilian list only those facilities 
        offered for safeguards that, after separation, will no 
        longer be engaged in activities of strategic 
        significance.

   The overarching criterion would be a judgment 
        whether subjecting a facility to IAEA safeguards would 
        impact adversely on India's national security.

   However, a facility will be excluded from the 
        civilian list if it is located in a larger hub of 
        strategic significance, notwithstanding the fact that 
        it may not be normally engaged in activities of 
        strategic significance.

   A civilian facility would, therefore, be one that 
        India has determined not to be relevant to its 
        strategic programme.

    14. Taking the above into account, India, on the basis of 
reciprocal actions by the U.S., will adopt the following 
approach:

          (i) Thermal Power Reactors: India will identify and 
        offer for safeguards 14 thermal power reactors between 
        2006 and 2014. This will include the 4 presently 
        safeguarded reactors (TAPS 1&2, RAPS 1&2) and in 
        addition KK 1&2 that are under construction. 8 other 
        PHWRs, each of a capacity of 220 MW, will also be 
        offered. Phasing of specific thermal power reactors, 
        being offered for safeguards would be indicated 
        separately by India. Such an offer would, in effect, 
        cover 14 out of the 22 thermal power reactors in 
        operation or currently under construction to be placed 
        under safeguards, and would raise the total installed 
        Thermal Power capacity by MWs under safeguards from the 
        present 19% to 65% by 2014.

          (ii) Fast Breeder Reactors: India is not in a 
        position to accept safeguards on the Prototype Fast 
        Breeder Reactor (PFBR) and the Fast Breeder Test 
        Reactor (FBTR), both located at Kalpakkam. The Fast 
        Breeder Programme is at the R&D stage and its 
        technology will take time to mature and reach an 
        advanced stage of development.

          (iii) Future Reactors: India has decided to place 
        under safeguards all future civilian thermal power 
        reactors and civilian breeder reactors, and the 
        Government of India retains the sole right to determine 
        such reactors as civilian.

          (iv) Research Reactors: India will permanently shut 
        down the CIRUS reactor, in 2010. It will also be 
        prepared to shift the fuel core of the APSARA reactor 
        that was purchased from France outside BARC and make 
        the fuel core available to be placed under safeguards 
        in 2010.

          (v) Upstream Facilities: The following upstream 
        facilities would be identified and separated as 
        civilian:

                List of those specific facilities in the 
                Nuclear Fuel Complex, which will be offered for 
                safeguards by 2008 will be indicated 
                separately.

                The Heavy Water Production plants at Thal, 
                Tuticorin and Hazira are proposed to be 
                designated for civilian use between 2006-2009. 
                We do not consider these plants as relevant for 
                safeguards purposes.

          (vi) Downstream Facilities: The following downstream 
        facilities would be identified and separated as 
        civilian:

                India is willing to accept safeguards in the 
                ``campaign'' mode after 2010 in respect of the 
                Tarapur Power Reactor Fuel Reprocessing Plant.

                The Tarapur and Rajasthan ``Away From 
                Reactors'' spent fuel storage pools would be 
                made available for safeguards with appropriate 
                phasing between 2006-2009.

          (vii) Research Facilities: India will declare the 
        following facilities as civilian:

                  (a) Tata Institute of Fundamental Research

                  (c) Variable Energy Cyclotron Centre

                  (d) Saha Institute of Nuclear Physics

                  (e) Institute for Plasma Research

                  (f) Institute of Mathematics Sciences

                  (g) Institute of Physics

                  (h) Tata Memorial Centre

                  (i) Board of Radiation and Isotope Technology

                  (j) Harish Chandra Research Institute

    These facilities are safeguards-irrelevant. It is our 
expectation that they will play a prominent role in 
international cooperation.

    15. Safeguards:

          (a) The United States has conveyed its commitment to 
        the reliable supply of fuel to India. Consistent with 
        the July 18, 2005, Joint Statement, the United States 
        has also reaffirmed its assurance to create the 
        necessary conditions for India to have assured and full 
        access to fuel for its reactors. As part of its 
        implementation of the July 18, 2005, Joint Statement 
        the United States is committed to seeking agreement 
        from the U.S. Congress to amend its domestic laws and 
        to work with friends and allies to adjust the practices 
        of the Nuclear Suppliers Group to create the necessary 
        conditions for India to obtain full access to the 
        international fuel market, including reliable, 
        uninterrupted and continual access to fuel supplies 
        from firms in several nations.

          (b) To further guard against any disruption of fuel 
        supplies, the United States is prepared to take the 
        following additional steps:

                  (i) The United States is willing to 
                incorporate assurances regarding fuel supply in 
                the bilateral U.S.-India agreement on peaceful 
                uses of nuclear energy under Section 123 of the 
                U.S. Atomic Energy Act, which would be 
                submitted to the U.S. Congress.

                  (ii) The United States will join India in 
                seeking to negotiate with the IAEA an India-
                specific fuel supply agreement.

                  (iii) The United States will support an 
                Indian effort to develop a strategic reserve of 
                nuclear fuel to guard against any disruption of 
                supply over the lifetime of India's reactors.

                  (iv) If despite these arrangements, a 
                disruption of fuel supplies to India occurs, 
                the United States and India would jointly 
                convene a group of friendly supplier countries 
                to include countries such as Russia, France and 
                the United Kingdom to pursue such measures as 
                would restore fuel supply to India.

          (c) In light of the above understandings with the 
        United States, an India-specific safeguards agreement 
        will be negotiated between India and the IAEA providing 
        for safeguards to guard against withdrawal of 
        safeguarded nuclear material from civilian use at any 
        time as well as providing for corrective measures that 
        India may take to ensure uninterrupted operation of its 
        civilian nuclear reactors in the event of disruption of 
        foreign fuel supplies. Taking this into account, India 
        will place its civilian nuclear facilities under India-
        specific safeguards in perpetuity and negotiate an 
        appropriate safeguards agreement to this end with the 
        IAEA.

    16. This plan is in conformity with the commitments made to 
Parliament by the Government.

March 2, 2006

                              ----------                              


IV.--Implementation of the India--United States Joint Statement of July 
                   18, 2005: India's Separation Plan


                              MAY 6, 2006

    The resumption of full civilian nuclear energy cooperation 
between India and the United States arose in the context of 
India's requirement for adequate and affordable energy supplies 
to sustain its accelerating economic growth rate and as 
recognition of its growing technological prowess. It was 
preceded by discussions between the two Governments, 
particularly between President Bush and Prime Minister Manmohan 
Singh, of the global energy scenario and the long-term 
implications of increasing pressure on hydrocarbon resources 
and rising oil prices. These developments led to the 
announcement in April 2005 of an Indo-U.S. Energy Dialogue that 
encompassed the entire spectrum of energy options ranging from 
oil and gas to coal, alternative fuels and civilian nuclear 
energy. Through the initiation of a sustained dialogue to 
address energy security concerns, the two countries sought to 
promote stable, efficient, predictable and cost effective 
solutions for India's growing requirements. At the same time, 
they also agreed on the need to develop and deploy cleaner, 
more efficient, affordable and diversified energy technologies 
to deal with the environmental implications of energy 
consumption. India had developed proven and wide-ranging 
capabilities in the nuclear sector, including over the entire 
nuclear fuel cycle. It is internationally recognized that India 
has unique contributions to make to international efforts 
towards meeting these objectives. India has become a full 
partner in ITER, with the full support of the U.S. and other 
partners. India also accepted the U.S. invitation to join the 
initiative on Clean Development Partnership.
    2. Noting the centrality of civilian nuclear energy to the 
twin challenges of energy security and safeguarding the 
environment, the two Governments agreed on 18 July 2005 to 
undertake reciprocal commitments and responsibilities that 
would create a framework for the resumption of full cooperation 
in this field. On its part, the United States undertook to:

   Seek agreement from the Congress to adjust U.S. laws 
        and policies to achieve full civil nuclear energy 
        cooperation.

   Work with friends and allies to adjust international 
        regimes to enable full civil nuclear energy cooperation 
        and trade with India, including but not limited to 
        expeditious consideration of fuel supplies for 
        safeguarded nuclear reactors at Tarapur.

   In the meantime, encourage its partners to consider 
        fuel supply to Tarapur expeditiously.

   To consult with its partners to consider India's 
        participation in ITER.

   To consult with other participants in the Generation 
        IV International Forum with a view towards India's 
        inclusion.

    3. India had conveyed its readiness to assume the same 
responsibilities and practices and acquire the same benefits 
and advantages as other leading countries with advanced nuclear 
technology, such as the United States. Accordingly, India for 
its part undertook the following commitments:

   Identifying and separating civilian and military 
        nuclear facilities and programmes in a phased manner.

   Filing a declaration regarding its civilian 
        facilities with the IAEA.

   Taking a decision to place voluntarily its civilian 
        nuclear facilities under IAEA safeguards, and

   Signing and adhering to an Additional Protocol with 
        respect to civilian nuclear facilities.

    4. Other commitments undertaken by India have already been 
fulfilled in the last year. Among them are:

   India's responsible non-proliferation record, 
        recognized by the U.S., continues and is reflected in 
        its policies and actions.

   The harmonization of India's export controls with 
        NSG and MTCR Guidelines even though India is not a 
        member of either group. These guidelines and control 
        lists have been notified and are being implemented.

   A significant upgrading of India's non-proliferation 
        regulations and export controls has taken place as a 
        result of the Weapons of Mass Destruction Act of May 
        2005. Inter-Ministerial consultations are ongoing to 
        examine and amend other relevant Acts as well as 
        framing appropriate rules and regulations.

   Refrain from transfer of enrichment and reprocessing 
        technologies to states that do not have them and 
        supporting international efforts to limit their spread. 
        This has guided our policy on non-proliferation.

   Continued unilateral moratorium on nuclear testing, 
        and

   Willingness to work with the United States for the 
        conclusion of a multilateral Fissile Material Cut-Off 
        Treaty.

    5. The Joint Statement of 18 July 2005, recognized that 
India is ready to assume the same responsibilities and 
practices as other leading countries with advanced nuclear 
technology, such as the United States. India has an impeccable 
record in non-proliferation. The Joint Statement acknowledges 
that India's nuclear programme has both a military and a 
civilian component. Both sides had agreed that the purpose was 
not to constrain India's strategic programme but to enable 
resumption of full civil nuclear energy cooperation in order to 
enhance global energy and environmental security. Such 
cooperation was predicated on the assumption that any 
international civil nuclear energy cooperation (including by 
the U.S.) offered to India in the civilian sector should, 
firstly, not be diverted away from civilian purposes, and 
secondly, should not be transferred from India to third 
countries without safeguards. These concepts will be reflected 
in the Safeguards Agreement to be negotiated by India with 
IAEA.

    6. India's nuclear programme is unique as it is the only 
state with nuclear weapons not to have begun with a dedicated 
military programme. It must be appreciated that the strategic 
programme is an offshoot of research on nuclear power programme 
and consequently, it is embedded in a larger undifferentiated 
programme. Identification of purely civilian facilities and 
programmes that have no strategic implications poses a 
particular challenge. Therefore, facilities identified as 
civilian in the Separation Plan will be offered for safeguards 
in phases to be decided by India. The nature of the facility 
concerned, the activities undertaken in it, the national 
security significance of materials and the location of the 
facilities are factors taken into account in undertaking the 
separation process. This is solely an Indian determination.

    7. The nuclear establishment in India not only built 
nuclear reactors but promoted the growth of a national 
industrial infrastructure. Nuclear power generation was 
envisaged as a three-stage programme with PHWRs chosen for 
deployment in the first stage. As indigenous reactors were set 
up, several innovative design improvements were carried out 
based on Indian R&D and a standardized design was evolved. The 
research and technology development spanned the entire spectrum 
of the nuclear fuel cycle including the front end and the back 
end. Success in the technologies for the back end of the fuel 
cycle allowed us to launch the second stage of the programme by 
constructing a Fast Breeder Test Reactor. This reactor has 
operated for 20 years based on a unique carbide fuel and has 
achieved all technology objectives. We have now proceeded 
further and are constructing a 500 MWe Prototype Fast Breeder 
Reactor. Simultaneously, we have launched design and 
development of reactors aimed at thorium utilization and 
incorporating inherent safety features.

    8. Concepts such as grid connectivity are not relevant to 
the separation exercise. Issues related to fuel resource 
sustainability, technical design and economic viability, as 
well as smooth operation of reactors are relevant factors. This 
would necessitate grid connectivity irrespective of whether the 
reactor concerned is civilian or not civilian.

    9. It must be recognized that the Indian nuclear programme 
still has a relatively narrow base and cannot be expected to 
adopt solutions that might be deemed viable by much larger 
programmes. A comparison of the number of reactors and the 
total installed capacity between India and the P-5 brings this 
out graphically:



------------------------------------------------------------------------
                                                      Total installed
     Country             Number of reactors              capacity
------------------------------------------------------------------------
India                                        15   3.04 GWe (2.8% of the
                                                   total production)
------------------------------------------------------------------------
USA                       104 (103 operational)   99.21 GWe (19.9% of
                                                   the total production)
------------------------------------------------------------------------
France                                       59   63.36 GWe (78.1% of
                                                   the total production)
------------------------------------------------------------------------
UK                                           23   11.85 GWe (19.4% of
                                                   the total production)
------------------------------------------------------------------------
Russia                                       31   21.74 GWe (15.6% of
                                                   the total production)
------------------------------------------------------------------------
China                                         9   6.602 GWe (2.2% of the
                                                   total production)
------------------------------------------------------------------------
Source: Nuclear Energy Institute, Washington DC


    10. Another factor to be taken into account is the small 
capacity of the reactors produced indigenously by India, some 
of which would remain outside safeguards. Therefore, in 
assessing the extent of safeguards coverage, it would be 
important to look at both the number of reactors and the 
percentage of installed capacity covered. An average Indian 
reactor is of 220 MW and its output is significantly smaller 
than the standard reactor in a P-5 economy. The chart below 
illustrates this aspect:


------------------------------------------------------------------------
       Country           Most Common Reactor     Number of Such Reactors
------------------------------------------------------------------------
India                 PHWRs 220 MWe             12
------------------------------------------------------------------------
USA                   69 PWRs and 34 BWRs.      51 Reactors in the range
                       Most plants are in the    of 1000 MWe to 1250 MWe
                       range of 1000-1250 MWe
------------------------------------------------------------------------
France                PWRs of 900 MWe and 1300  34 PWRs of 900 MWe and
                       MWe size                  20 PWRs of 1300 MWe
------------------------------------------------------------------------
UK                    No standard size. AGR is  14 AGRs
                       the most common in the
                       range of 600-700 MWe
------------------------------------------------------------------------
Russia                3rd Generation VVER-1000  9 3rd Generation VVER-
                       PWRs and RBMK 1000        1000 PWRs and 11 RBMK
                       Light Water Graphite      1000 Light Water
                       Reactors                  Graphite Reactors
------------------------------------------------------------------------
China                 PWRs 984 MWe              Four
------------------------------------------------------------------------
Source: Uranium Information Centre, Melbourne

    11. The complexity of the separation process is further 
enhanced by the limited resources that India has devoted to its 
nuclear programme as compared to P-5 nations. Moreover, as 
India expands international cooperation, the percentage of its 
thermal power reactor installed capacity under safeguards would 
rise significantly as fresh capacity is added through such 
cooperation.

    12. India's approach to the separation of its civilian 
nuclear facilities is guided by the following principles:

   Credible, feasible and implementable in a 
        transparent manner;

   Consistent with the understandings of the 18 July 
        Statement;

   Consistent with India's national security and R&D 
        requirements as well as not prejudicial to the three-
        stage nuclear programme in India;

   Must be cost effective in its implementation; and

   Must be acceptable to Parliament and public opinion.

    13. Based on these principles, India will:

   Include in the civilian list only those facilities 
        offered for safeguards that, after separation, will no 
        longer be engaged in activities of strategic 
        significance.

   The overarching criterion would be a judgment 
        whether subjecting a facility to IAEA safeguards would 
        impact adversely on India's national security.

   However, a facility will be excluded from the 
        civilian list if it is located in a larger hub of 
        strategic significance, notwithstanding the fact that 
        it may not be normally engaged in activities of 
        strategic significance.

   A civilian facility would, therefore, be one that 
        India has determined not to be relevant to its 
        strategic programme.

    14. Taking the above into account, India, on the basis of 
reciprocal actions by the U.S., will adopt the following 
approach:

          (i) Thermal Power Reactors: India will identify and 
        offer for safeguards 14 thermal power reactors between 
        2006 and 2014. This will include the 4 presently 
        safeguarded reactors (TAPS 1&2, RAPS 1&2) and in 
        addition KK1&2 that are under construction. 8 other 
        PHWRs, each of a capacity of 220 MWe, will also be 
        offered. The overall plan will be as follows:



------------------------------------------------------------------------
          S. No.               Facility      Year offered for safeguards
------------------------------------------------------------------------
1.                         TAPS 1            2006
2.                         TAPS 2            2006
3.                         RAPS 1            2006
4.                         RAPS 2            2006
5.                         KK 1              2006
6.                         KK 2              2006
7.                         RAPS 5            2007
8.                         RAPS 6            2008
9.                         RAPS 3            2010
10.                        RAPS 4            2010
11.                        KAPS 1            2012
12.                        KAPS 2            2012
13.                        NAPS 1            2014
14.                        NAPS 2            2014
------------------------------------------------------------------------

    The above offer would in effect, cover 14 out of the 22 
thermal power reactors in operation or currently under 
construction to be placed under sadfeguards, and would raise 
the total installed Thermal Power capacity by Mwe under 
safeguards from the present 19% to 65% by 2012.
          (ii) Fast Breeder Reactors: India is not in a 
        position to accept safeguards on the Prototype Fast 
        Breeder Reactor (PFBR) and the Fast Breeder Test 
        Reactor (FBTR), both located at Kalpakkam. The Fast 
        Breeder Programme is at the R&D stage and its 
        technology will take time to mature and reach an 
        advanced stage of development.

          (iii) Future Reactors: India has decided to place 
        under safeguards all future civilian thermal power 
        reactors and civilian breeder reactors, and the 
        Government of India retains the sole right to determine 
        such reactors as civilian.

          (iv) Research Reactors: India will permanently shut 
        down the CIRUS reactor, in 2010. It will also be 
        prepared to shift the fuel core of the APSARA reactor 
        that was purchased from France outside BARC and make 
        the fuel core available to be placed under safeguards 
        in 2010.

          (v) Upstream Facilities: The following upstream 
        facilities would be identified and separated as 
        civilian:

                List of specific facilities in the Nuclear Fuel 
                Complex, Hyderabad, which will be offered for 
                safeguards by 2008 is given below:

                        --Uranium Oxide Plant (Block A)

                        --Ceramic Fuel Fabrication Plant 
                        (Pelletizing) (Block A)

                        --Enriched Uranium Oxide Plant

                        --Enriched Fuel Fabrication Plant

                        --Gadolinla Facility

                The Heavy Water Production plants at Thal, 
                Tuticorin and Hazira are proposed to be 
                designated for civilian use between 2006-2009. 
                We do not consider these plants as relevant for 
                safeguards purposes.

          (vi) Downstream Facilities: The following downstream 
        facilities would be identified and separated as 
        civilian:

                India is willing to accept safeguards in the 
                ``campaign'' mode after 2010 in respect of the 
                Tarapur Power Reactor Fuel Reprocessing Plant.

                The Tarapur and Rajasthan ``Away From 
                Reactors'' spent fuel storage pools would be 
                made available for safeguards with appropriate 
                phasing between 2006-2009.

          (vii) Research Facilities: India will declare the 
        following facilities as civilian:

                  (a) Tata Institute of Fundamental Research

                  (c) Variable Energy Cyclotron Centre

                  (d) Saha Institute of Nuclear Physics

                  (e) Institute for Plasma Research

                  (f) Institute of Mathematics Sciences

                  (g) Institute of Physics

                  (h) Tata Memorial Centre

                  (i) Board of Radiation and Isotope Technology

                  (j) Harish Chandra Research Institute

    These facilities are safeguards-irrelevant. It is our 
expectation that they will play a prominent role in 
international cooperation.

    15. Safeguards:

          (a) The United States has conveyed its commitment to 
        the reliable supply of fuel to India. Consistent with 
        the July 18, 2005, Joint Statement, the United States 
        has also reaffirmed its assurance to create the 
        necessary conditions for India to have assured and full 
        access to fuel for its reactors. As part of its 
        implementation of the July 18, 2005, Joint Statement 
        the United States is committed to seeking agreement 
        from the U.S. Congress to amend its domestic laws and 
        to work with friends and allies to adjust the practices 
        of the Nuclear Suppliers Group to create the necessary 
        conditions for India to obtain full access to the 
        international fuel market, including reliable, 
        uninterrupted and continual access to fuel supplies 
        from firms in several nations.

          (b) To further guard against any disruption of fuel 
        supplies, the United States is prepared to take the 
        following additional steps:

                  (i) The United States is willing to 
                incorporate assurances regarding fuel supply in 
                the bilateral U.S.-India agreement on peaceful 
                uses of nuclear energy under Section 123 of the 
                U.S. Atomic Energy Act, which would be 
                submitted to the U.S. Congress.

                  (ii) The United States will join India in 
                seeking to negotiate with the IAEA an India-
                specific fuel supply agreement.

                  (iii) The United States will support an 
                Indian effort to develop a strategic reserve of 
                nuclear fuel to guard against any disruption of 
                supply over the lifetime of India's reactors.

                  (iv) If despite these arrangements, a 
                disruption of fuel supplies to India occurs, 
                the United States and India would jointly 
                convene a group of friendly supplier countries 
                to include countries such as Russia, France and 
                the United Kingdom to pursue such measures as 
                would restore fuel supply to India.

          (c) In light of the above understandings with the 
        United States, an India-specific safeguards agreement 
        will be negotiated between India and the IAEA providing 
        for safeguards to guard against withdrawal of 
        safeguarded nuclear material from civilian use at any 
        time as well as providing for corrective measures that 
        India may take to ensure uninterrupted operation of its 
        civilian nuclear reactors in the event of disruption of 
        foreign fuel supplies. Taking this into account, India 
        will place its civilian nuclear facilities under India-
        specific safeguards in perpetuity and negotiate an 
        appropriate safeguards agreement to this end with the 
        IAEA.

    16. This plan is in conformity with the commitments made to 
Parliament by the Government.

    May 6, 2006

                              ----------                              


 V.--Communication From Secretary Rice to Chairman Lugar, June 28, 2006

                            The Secretary of State,
                                            Washington, DC,
                                                     June 28, 2006.
Hon. Richard G. Lugar, Chairman,
U.S. Senate Committee on Foreign Relations,
Washington, DC.

    Dear Mr. Chairman: I am pleased to confirm that, in 
carrying out the laws and regulations of the United States 
governing the export of nuclear-related items, the United 
States Government will continue to act in accordance with IAEA 
INFCIRC/254, as amended, the Guidelines and Annexes of the 
Nuclear Suppliers Group. The U.S. will also continue to act 
within the policies and practices of the decisions taken by the 
Nuclear Suppliers Group with respect to any exports to India. 
We intend to do so notwithstanding any contrary actions by any 
other participating countries in the Nuclear Suppliers Group.
    We appreciate the committee's prompt action on this 
important legislation.

            Sincerely,
                                          Condoleezza Rice,
                                                Secretary of State.

                              ----------                              


  VI.--Responses to Additional Questions Submitted for the Record to 
 Under Secretaries Nicholas Burns and Robert Joseph by Senator Biden, 
                           March 29, 2006\1\

---------------------------------------------------------------------------
    \1\Senator Biden submitted these questions following a Closed 
Session hearing held by the committee on March 29, 2006.
---------------------------------------------------------------------------

              INDIA'S NUCLEAR FACILITIES SEPARATION OFFER

    Question (1)(a). India has decided to declare as 
``military'' 8 of the 22 power reactors that it currently 
possesses or is building. Perhaps all of those 8 reactors will 
be Canadian-type reactors that can be used to produce weapons-
grade plutonium.
    How much weapons-grade plutonium has India been producing 
annually, in recent years?

    Answer. We would be happy to discuss India's plutonium 
production, and other aspects of its nuclear weapons program, 
in an appropriate classified setting.


    Question (1)(b). India has decided to declare as 
``military'' 8 of the 22 power reactors that it currently 
possesses or is building. Perhaps all of those 8 reactors will 
be Canadian-type reactors that can be used to produce weapons-
grade plutonium.
    Which power reactors will India declare as ``military?''

    Answer. India's separation plan calls for 14 of 22 thermal 
power reactors--both existing and presently under 
construction--to be declared civil and placed under IAEA 
safeguards. To date, the 8 not declared civil have not yet been 
identified publicly.


    Question (1)(c). India has decided to declare as 
``military'' 8 of the 22 power reactors that it currently 
possesses or is building. Perhaps all of those 8 reactors will 
be Canadian-type reactors that can be used to produce weapons-
grade plutonium.
    How much plutonium could India make if the 8 reactors 
declared ``military'' were devoted to that mission?

    Answer. We would be happy to discuss India's plutonium 
production, and other aspects of its nuclear weapons program, 
in an appropriate classified setting.


    Question (1)(d). India has decided to declare as 
``military'' 8 of the 22 power reactors that it currently 
possesses or is building. Perhaps all of those 8 reactors will 
be Canadian-type reactors that can be used to produce weapons-
grade plutonium.
    How many nuclear weapons can India produce each year, using 
its annual plutonium production? And how many could it make if 
the 8 reactors declared ``military'' were devoted to that 
mission?

    Answer. We would be happy to discuss India's plutonium 
production, and other aspects of its nuclear weapons program, 
in an appropriate classified setting.


    Question (2)(a). India already has a large stockpile of 
unseparated plutonium in its spent nuclear reactor fuel.
    How much plutonium does India have, and how much 
unseparated plutonium is in its unsafeguarded spent nuclear 
fuel? How many nuclear weapons could it produce with this 
stockpiled plutonium?

    Answer. We would be happy to discuss India's plutonium 
production, and other aspects of its nuclear weapons program, 
in an appropriate classified setting.


    Question (2)(b). India already has a large stockpile of 
unseparated plutonium in its spent nuclear reactor fuel.
    Is that plutonium less useful for nuclear weapons than the 
plutonium that India might produce using the 8 reactors it will 
declare as ``military?'' If so, please explain.

    Answer. India has existing stocks of both reactor-grade and 
weapons-grade plutonium. The heavy water power reactors that 
India has not declared as civil in its separation plan could 
produce either weapons-grade or reactor-grade plutonium, 
depending on how they were operated. In principle, either grade 
of plutonium could be used in a nuclear explosive device.


    Question (3)(a). India will declare its pilot ``fast 
breeder'' reactor as ``military.'' And while it may declare 
some future ``fast breeder'' reactors as ``civil,'' it did not 
promise to do so.
    Were there any side promises in this regard, either formal 
or informal? If so, please provide them.

    Answer. India has said publicly that it will declare and 
safeguard all future civil fast breeder reactors. There were no 
``side promises'' in this regard.
    While India retains the sovereign right to determine 
whether future indigenous reactors serve a civil or military 
function--as it does today--neither we nor our international 
partners will cooperate with non-civil or non-safeguarded 
facilities. All externally-supplied reactors and other 
controlled technologies will by necessity be civil and subject 
to IAEA safeguards.
    We would also note that India has indicated repeatedly that 
it intends to increase significantly its nuclear energy 
production. As such, India has a strong incentive to declare 
future reactors, including fast breeder reactors, as civil and 
thus to bring them under safeguards, as this is the only way 
that foreign material and technology could be made available 
for the construction and operation of such facilities. 
Moreover, India has expressed an interest in participating in 
the Global Nuclear Energy Partnership (GNEP), which is designed 
to enhance civil nuclear energy production while advancing 
nonproliferation objectives. As we have indicated to the 
government of India, India's decision not to designate its fast 
breeder reactors as civil and place under IAEA safeguards 
limits our ability to collaborate on issues related to the fast 
burner reactors contemplated under GNEP.


    Question (3)(b). India will declare its pilot ``fast 
breeder'' reactor as ``military.'' And while it may declare 
some future ``fast breeder'' reactors as ``civil,'' it did not 
promise to do so.
    Are there any understandings regarding future power 
reactors, or agreed criteria by which to determine whether a 
future power reactor is to be ``civil'' or ``military?''

    Answer. India has said publicly that it will declare and 
safeguard all future civil thermal and breeder reactors. India 
retains the sovereign right to determine whether future 
indigenous reactors serve a civil or military function--as it 
does today. However, neither we nor our international partners 
will cooperate with non-civil or non-safeguarded facilities. 
All externally-supplied reactors and other controlled 
technologies will by necessity be civil and subject to IAEA 
safeguards. We would also note that India has indicated 
repeatedly that it intends to significantly increase its 
nuclear energy production. As such, it has a strong incentive 
to declare future reactors, including its thermal reactors, as 
civil and thus bring them under safeguards, as this is the only 
way that foreign material and technology could be made 
available for the construction and operation of such 
facilities.


    Question (4)(a). Aside from agreeing to subject an 
additional 8 civil reactors to international safeguards, what 
specific Indian actions/commitments from the July 18 Joint 
Statement were something that India had not or was not already 
committed to doing?

    Answer. Prior to the July 18, 2005 Joint Statement, India 
had undertaken some nonproliferation measures that provided a 
solid foundation for the Civil Nuclear Cooperation Initiative. 
For example, it had passed new legislation, consistent with 
India's obligation under UN Security Council Resolution 1540, 
to enhance controls over the export and transit of weapons of 
mass destruction, associated delivery systems, and related 
technology. Moreover, the U.S.-India Next Steps in Strategic 
Partnership (NSSP) sought, inter alia, India's harmonization of 
its control lists with and unilateral adherence to the Nuclear 
Suppliers Group (NSG) and the Missile Technology Control Regime 
(MTCR). This commitment by India was reflected in the July 18, 
2005 Joint Statement. Under the July 18 Joint Statement, India 
made the following new commitments:

   Identifying and separating its civil and military 
        nuclear facilities and programs;

   Accepting IAEA safeguards in perpetuity on its civil 
        nuclear facilities (including not only the 8 facilities 
        noted in this Question, but also all future civil 
        reactors--both breeder and thermal);

   Signing and adhering to an Additional Protocol with 
        the IAEA;

   Strengthening its national export control system 
        through harmonization with and unilateral adherence to 
        the NSG and MTCR Guidelines;

   Refraining from the transfer of enrichment and 
        reprocessing technologies to states that do not have 
        them and supporting international efforts to limit 
        their spread;

   Working with the U.S. for the conclusion of a 
        multilateral Fissile Material Cutoff Treaty.

    While UN Security Council Resolution 1540 required India to 
establish appropriate and effective export control measures, it 
did not specifically require harmonization of national export 
controls with specific regimes, such as the NSG and MTCR. 
Adherence to these regimes is a significant step. It not only 
indicates the seriousness of India's commitment to prevent 
onward proliferation, but it represents a commitment on India's 
part to implement the export controls on sensitive items in the 
same manner as the members of the NSG and the MTCR.
    In addition, prior to the U.S.-India Civil Nuclear 
Cooperation Initiative, India had undertaken a unilateral 
moratorium on nuclear weapons testing. India has committed 
under this Initiative to continue this unilateral moratorium. 
Including the testing moratorium among India's commitments 
under this Initiative will create substantial new economic and 
energy incentives for India to maintain that moratorium.
    Each of these commitments is significant in its own right. 
Taken together, we believe these commitments represent a net 
gain for global nonproliferation efforts.


    Question (4)(b). Which of these does the administration 
believe India will not implement if Congress does not approve 
the deal as currently configured?

    Answer. We believe that the U.S.-India Civil Nuclear 
Cooperation Initiative is a sound arrangement that Congress 
should support. The commitments India has made will, when 
implemented, align India more closely than at any previous time 
with international nuclear nonproliferation standards and 
practices and thereby strengthen the global nonproliferation 
regime.
    We cannot speculate on what India might or might not do if 
Congress does not approve legislation to facilitate the 
implementation of this Initiative, but firmly believe that if 
Congress does not permit the Initiative to proceed, the U.S.-
India strategic relationship would suffer. We believe the best 
course is to lock-in the significant gains reached and then 
seek to achieve further nonproliferation results as our 
strategic partnership advances. We would urge that Congress 
resist the temptation to take actions that will prejudice our 
ability to realize the important and long-standing 
nonproliferation objectives embodied in the Initiative. The 
commitments India has made under the Initiative are a 
significant gain over the status quo.


    Question (5)(a). India refused to declare the CIRUS reactor 
as either ``civil'' or ``military.'' Instead, it will continue 
to use the reactor as a military facility until sometime in 
2010, when it will shut down the reactor.
    Did India violate its prior pledges to the United States 
and Canada when it used the CIRUS reactor to supply plutonium 
for its nuclear weapons program?

    Answer. In response to a United States request, the Indian 
government committed to taking the CIRUS reactor out of 
commission by 2010 as part of its plan to separate civil and 
military nuclear facilities and programs.
    With respect to CIRUS, the U.S. Government examined this 
matter around the time of India's 1974 test and was unable to 
reach a conclusive answer whether or not India had violated the 
1956 contract for heavy water supply to the CIRUS reactor. 
Legally, there was a lack of mutual understanding between the 
U.S. and India on the scope of the language of the 1956 
contract. Factually, there was uncertainty as to whether U.S.-
supplied heavy water contributed to the production of the 
plutonium used for India's nuclear explosive device.


    Question (5)(b). India refused to declare the CIRUS reactor 
as either ``civil'' or ``military.'' Instead, it will continue 
to use the reactor as a military facility until sometime in 
2010, when it will shut down the reactor.
    Even though the State Department did not declare India in 
violation of its pledges at the time, don't we know now that:

  -- the 1974 test was a nuclear weapon test;

  -- it used plutonium produced in a reactor that used U.S.-
        supplied heavy water; and

  -- the United States had made clear to India, well before the 
        test, that the use of that heavy water to produce a so-
        called ``peaceful nuclear explosive device'' would be 
        in contravention of Indian commitments?

    Answer. While the United States does not accept the concept 
of a ``peaceful nuclear explosion,'' India maintained in 1974 
that its test was a peaceful nuclear explosion rather than a 
nuclear weapon test. At the time, there was a disagreement 
between the United States and India on the scope of the 
language in the 1956 contract to supply heavy water to the 
CIRUS Reactor. The U.S. made its view clear to India before the 
test; India responded that it had a different view. Agreements 
for peaceful nuclear cooperation subsequent to India's 1974 
test have referred to ``nuclear explosive device'' without 
regard to the purported distinction between ``peaceful'' and 
``military'' purposes.
    Even in 1976, just two years after the test, it was not 
possible to reach a definitive determination as to whether 
U.S.-supplied heavy water contributed to the production of the 
plutonium used in the 1974 detonation. U.S. experts concluded 
at that time that India was not dependent upon the U.S. for the 
heavy water used in the CIRUS reactor during much of the period 
leading up to the 1974 test. Since the exact time at which the 
plutonium utilized in the test was produced remained 
undetermined, there was no basis for determining irrefutably 
that U.S.-supplied heavy water was present in the reactor when 
the plutonium was produced.


    Question (5)(c). India refused to declare the CIRUS reactor 
as either ``civil'' or ``military.'' Instead, it will continue 
to use the reactor as a military facility until sometime in 
2010, when it will shut down the reactor.
    How will you guard against similar conduct by India in the 
future?

    Answer. All bilateral agreements for peaceful nuclear 
cooperation with non-nuclear weapon states (as India is treated 
under U.S. law consistent with the nuclear Non-Proliferation 
Treaty) now specify that U.S.-exported items cannot be used for 
any ``nuclear explosive device.'' Under the U.S.-India Civil 
Nuclear Cooperation Initiative, the United States will not 
transfer nuclear technology, equipment, or material to an 
Indian nuclear facility that is not under IAEA safeguards, in 
accordance with our NPT obligations. Moreover, the Joint 
Statement provides for effective measures to minimize any risk 
of diversion, including commitments by India to accept IAEA 
safeguards in perpetuity on its civil nuclear facilities and 
activities and to sign and adhere to an Additional Protocol. 
The IAEA safeguards required by this Initiative are designed to 
detect--and thereby prevent--the diversion to military use of 
any materials, technologies, or equipment provided to India's 
civil nuclear facilities.
    In the July 18, 2005 Joint Statement, India committed to 
continuing its nuclear testing moratorium and we believe that 
India takes this commitment seriously. Should India nonetheless 
decide at some future time to revisit this commitment, in our 
view it will face a number of disincentives to detonate another 
nuclear explosive device.
    If India detonated a nuclear explosive device after the 
proposed legislation was enacted, the Presidential 
determination under that law would no longer be effective. 
Peaceful nuclear cooperation with India would be subject to the 
prohibition in section 129 of the Atomic Energy Act. In 
addition, the broad sanctions under the Glenn Amendment 
(section 102(b) of the Arms Export Control Act) would be 
reinstated, as the waiver authority for those sanctions (under 
the Brownback II amendment) would lapse upon India's detonation 
of a nuclear explosive device. Sanctions would also apply under 
the Export-Import Bank Act (section 2(b)(4)). Finally, section 
123(a)(4) of the Atomic Energy Act provides that any agreement 
for cooperation with a non-nuclear weapon state shall include 
``a stipulation that the United States shall have the right to 
require the return of any nuclear materials and equipment 
transferred pursuant thereto and any special nuclear material 
produced through the use thereof if the cooperating party 
detonates a nuclear explosive device.''


    Question (5)(d). India refused to declare the CIRUS reactor 
as either ``civil'' or ``military.'' Instead, it will continue 
to use the reactor as a military facility until sometime in 
2010, when it will shut down the reactor.
    By letting India finesse this issue, do we set a precedent 
that other states could cite in the future?

    Answer. We would not describe the CIRUS matter as a case of 
India ``finessing'' the issue. Nor do we believe that the CIRUS 
matter sets a precedent. The disagreement over the scope of the 
language in the 1956 contract was specific to the language of 
that contract. As a result of lessons learned after India's 
1974 test, the U.S. adopted language in its agreements for 
peaceful nuclear cooperation that eliminates any ambiguity over 
the permissible uses of U.S.-supplied nuclear items. We do not 
believe that this dispute from 30 years ago over the 1956 
contract will have a negative effect on the current actions of 
India or any other state.


    Question (6)(a). India says that it adheres to a ``minimum 
credible deterrent'' policy regarding its nuclear weapons.
    How many nuclear weapons does India have now? How many does 
it think it needs?

    Answer. Unclassified estimates on the number of warheads 
possessed by India vary considerably; none of these are 
authoritative. We would be happy to discuss India's nuclear 
weapons program, including these specific queries, in an 
appropriate classified setting.


    Question (6)(b). India says that it adheres to a ``minimum 
credible deterrent'' policy regarding its nuclear weapons.
    Is India committed to building a triad of nuclear forces 
(land, sea and air) to match the force structures of China, 
Russia and the United States?

    Answer. India has been open about its pursuit of land- and 
sea-based nuclear-capable ballistic missiles based on the 
Prithvi (liquid fuel) and the Agni (solid fuel).
    We would be happy to discuss India's nuclear weapons 
program, including these specific queries, in an appropriate 
classified setting.


    Question (6)(c). India says that it adheres to a ``minimum 
credible deterrent'' policy regarding its nuclear weapons.
    How ``minimal'' can its deterrent be, if India is unwilling 
to stop its fissile material production or to set a future cap?

    Answer. What constitutes a ``minimal'' deterrence for India 
can only be determined by the Government of India. We would be 
happy to discuss India's nuclear weapons program, including 
these specific queries, in an appropriate classified setting.


    Question (6)(d). India says that it adheres to a ``minimum 
credible deterrent'' policy regarding its nuclear weapons.
    Would Indian announcement of a conditional fissile material 
cap (e.g., tied to its neighbors' weapons numbers) be a useful 
step?
    Answer. While in theory such an announcement could be a 
``useful step,'' it would be unwise to hold up the significant 
nonproliferation gains afforded by this Initiative in order to 
seek a fissile material cap that India indicates it cannot 
agree to absent a similar commitment by Pakistan and China.
    The curtailment of the production of fissile material for 
weapons was discussed as part of the Civil Nuclear Cooperation 
Initiative, but India maintained that it could not agree to a 
unilateral cap at this time. The U.S. has achieved an important 
objective by obtaining India's commitment to work toward the 
conclusion of a multilateral Fissile Material Cutoff Treaty 
(FMCT). Moreover, we remain willing to explore other 
intermediate options that might also serve such an objective. 
We also continue to call on all states that produce fissile 
material for weapons purposes to observe a voluntary production 
moratorium, as the United States has done for many years.


    Question (7)(a). India agreed to safeguards in perpetuity, 
but also said that they would be ``India-specific'' safeguards. 
India added that safeguards on its spent fuel reprocessing 
facility would be ``in a campaign mode.''
    What are ``India-specific'' safeguards?

    Answer. It will be incumbent on India to clarify what it 
means by ``India-specific'' safeguards in the context of its 
negotiations with the IAEA. In our view, the safeguards 
agreement for India will be unique to India because India 
presents a unique set of circumstances. India has agreed to 
place all its civil nuclear facilities under safeguards in a 
phased manner, along with future civil facilities, but India is 
not an NPT party and will have non-civil facilities and 
material outside of safeguards. However, there is an accepted 
IAEA framework for safeguards (INFCIRC/66) that pre-dates the 
NPT and is suited to safeguarding material in a non-NPT party 
without full-scope safeguards. In its separation plan, India 
has committed to safeguards in perpetuity.


    Question (7)(b). India agreed to safeguards in perpetuity, 
but also said that they would be ``India-specific'' safeguards. 
India added that safeguards on its spent fuel reprocessing 
facility would be ``in a campaign mode.''
    If we don't know yet, how can Congress be expected to 
approve an ``India exemption'' from Atomic Energy Act 
requirements?

    Answer. The details of the Indian commitment to place 
facilities under safeguards, and the basic principles and 
technical means by which the IAEA will carry out safeguards for 
those facilities and the materials they produce, are known. The 
IAEA and India will negotiate and agree upon a safeguards 
regime covering the facilities that India identifies as civil. 
In our view, that safeguards agreement best conforms to 
existing safeguards standards incorporated in the Agency's 
safeguards system (INFCIRC/66). The safeguards agreement must 
be approved by the IAEA Board of Governors, including, of 
course, the United States.


    Question (7)(c). India agreed to safeguards in perpetuity, 
but also said that they would be ``India-specific'' safeguards. 
India added that safeguards on its spent fuel reprocessing 
facility would be ``in a campaign mode.''
    If India plans to allow its spent fuel reprocessing plant 
to be safeguarded only intermittently, and safeguards will be 
lifted whenever the plant is used for military work, how 
effective will those safeguards be?

    Answer. Safeguards have been applied by the IAEA 
successfully in this manner to the PREFRE reprocessing plant at 
Tarapur before. Such temporary safeguards are foreseen in non-
NPT (INFCIRC/66) safeguards arrangements. When safeguards are 
applied in a campaign mode, the facility is safeguarded while 
safeguarded material is in the facility. The IAEA will monitor 
the spent fuel that arrives at the plant, take independent 
measurements of the amount of material fed into the process, 
account for all nuclear material in the process, and measure 
the product material, which will remain under safeguards.
    It is true that this is not the most efficient way to 
operate for the facility or for safeguards implementation, but 
``campaign mode'' safeguards on associated upstream and 
downstream facilities can be applied effectively based on 
agreed IAEA procedures.


    Question (7)(d). India agreed to safeguards in perpetuity, 
but also said that they would be ``India-specific'' safeguards. 
India added that safeguards on its spent fuel reprocessing 
facility would be ``in a campaign mode.''
    If the same facility is used for both civil and military 
purposes, how can any nuclear commerce involving that facility 
be considered strictly ``civil'' and peaceful?

    Answer. As noted in the answer to (e) below, any 
cooperation would occur only while the facility is being 
safeguarded by the IAEA. For practical purposes this precludes 
meaningful cooperation with the facility itself. The United 
States does not intend to supply reprocessing (or, for that 
matter, enrichment) technology, equipment, or components to 
India.


    Question (7)(e). India agreed to safeguards in perpetuity, 
but also said that they would be ``India-specific'' safeguards. 
India added that safeguards on its spent fuel reprocessing 
facility would be ``in a campaign mode.''
    Would either the administration's proposed legislation or 
its proposed NSG resolution prevent the United States or other 
countries from providing assistance to this facility?

    Answer. The NPT, NSG Guidelines, and, in the case of the 
United States, provisions of U.S. domestic law which the 
proposed legislation does not seek to waive, permit the supply 
of equipment and components only to facilities under IAEA 
safeguards in India.
    The current NSG Guidelines only allow for transfers of 
Trigger List items for peaceful purposes to non-nuclear weapon 
states with full-scope IAEA safeguards in place, unless there 
is an imminent radiological hazard that cannot be otherwise met 
(the safety exemption), or if the arrangement is grandfathered. 
Even in those rare cases, the facility would still have to be 
safeguarded.
    Thus, supply of such items to the PREFRE reprocessing 
facility could only take place if PREFRE were under IAEA 
safeguards at the time of supply. If India wished to then 
reprocess unsafeguarded spent fuel in an unsafeguarded campaign 
mode, it would have an obligation to the supplier under the 
terms of supply to remove any such supplied components or 
equipment from PREFRE before operating the facility in that 
mode. Removal would not appear to be a practical option if the 
components or equipment were important to the operation of the 
plant. Moreover, as a matter of policy, the United States does 
not intend to supply enrichment or reprocessing technology, 
equipment, or components to India. We expect that the bilateral 
agreement for peaceful nuclear cooperation with India will 
reflect this.


    Question (8)(a). In response to a question for the record 
from the committee's hearing of November 2, 2005, regarding the 
CIRUS reactor, you stated: ``Were the plant to be placed under 
safeguards, those safeguards would be applicable in perpetuity 
to any material produced by, used by, or stored in the plant 
after the effective date of the agreement.'' This principle 
would appear to be called into question, however, by the 
discussion (in the separation plan document tabled in the 
Indian Parliament on March 7, 2006) of a tie between safeguards 
and uninterrupted foreign fuel supply.
    Will all spent fuel from safeguarded reactors be 
safeguarded?

    Answer. While India has indicated that it intends to 
continue campaign mode operation of particular downstream 
facilities, it has agreed to safeguards in perpetuity on its 
civil reactors, including on nuclear material used or produced 
in those facilities.


    Question (8)(b). In response to a question for the record 
from the committee's hearing of November 2, 2005, regarding the 
CIRUS reactor, you stated: ``Were the plant to be placed under 
safeguards, those safeguards would be applicable in perpetuity 
to any material produced by, used by, or stored in the plant 
after the effective date of the agreement.'' This principle 
would appear to be called into question, however, by the 
discussion (in the separation plan document tabled in the 
Indian Parliament on March 7, 2006) of a tie between safeguards 
and uninterrupted foreign fuel supply.
    What prior approval rights will the United States have 
regarding the disposition of spent fuel derived from U.S.-
provided reactor fuel?

    Answer. We are proposing to waive only section 123(a)(2)--
the full-scope IAEA safeguards requirement--of the conditions 
and controls required by Section 123(a) of the Atomic Energy 
Act (AEA) to be included in an agreement for peaceful nuclear 
cooperation. We are seeking to include in the agreement to be 
negotiated with India the approval rights required, inter alia, 
by AEA section 123(a)(7), which would include a U.S. right to 
approve the reprocessing or other alteration in form or content 
of spent fuel subject to the agreement, and by AEA section 
123(a)(5), which would include a U.S right to approve the 
retransfer of U.S.-obligated spent fuel from India to a third 
country for reprocessing or other disposition. It should be 
noted that these U.S. consent rights would apply not just to 
spent fuel derived from U.S.-provided reactor fuel, but to any 
spent fuel in a U.S.-supplied reactor, even if the fresh fuel 
had been India's own or supplied by a third party. (Strictly 
speaking, the U.S. retransfer approval right would apply only 
to the special nuclear material produced in the non-U.S.-
obligated fresh fuel through the use of the U.S.-supplied 
reactor; but as a practical matter it would affect the entirety 
of the spent fuel prior to reprocessing.)


    Question (9)(a). India's separation plan document also said 
that safeguards would be tied to an uninterrupted supply of 
reactor fuel and provide ``for corrective measures that India 
may take to ensure uninterrupted operation of its civilian 
nuclear reactors in the event of disruption of foreign fuel 
supplies,'' and that the United States would help India to 
create a nuclear fuel reserve for use in case there was any 
interruption in supply.
    What, exactly, did the United States agree to, regarding 
reactor fuel supplies for India? Is the separation plan 
document tabled in the Indian Parliament on March 7, 2006, an 
accurate record of the agreement?

    Answer. The Indian separation plan presented to the Indian 
Parliament on March 7 is India's plan. While that is not a 
U.S.-origin document, and while we would have presented 
particular issues somewhat differently, that document 
accurately reflects the general discussions between the United 
States and India. Our negotiators were very clear that, while 
the U.S. would be willing to provide reasonable fuel assurances 
designed to counter market imperfections, fuel assurances are 
not a ``condition'' to any of India's commitments under the 
plan--including, in particular, safeguards in perpetuity.
    Specific details in some areas of the separation plan, for 
example, on an implementation schedule, have not yet been 
released by India. Other issues have not yet been finally 
determined, such as those issues which require negotiation with 
the IAEA. Moreover, particular concerns, such as fuel supply 
assurances, have been discussed but no detailed agreement has 
yet been reached; the Indian plan accurately reflects the types 
of issues we have discussed in this area. Finally, the initial 
discussions on the bilateral agreement for peaceful nuclear 
cooperation have only just begun.


    Question (9)(b). India's separation plan document also said 
that safeguards would be tied to an uninterrupted supply of 
reactor fuel and provide ``for corrective measures that India 
may take to ensure uninterrupted operation of its civilian 
nuclear reactors in the event of disruption of foreign fuel 
supplies,'' and that the United States would help India to 
create a nuclear fuel reserve for use in case there was any 
interruption in supply.
    How can safeguards be ``in perpetuity,'' if they can be 
lifted whenever there is an interruption in reactor fuel 
supply? How does India's approach comport with your answer to a 
question for the record from the committee's hearing of 
November 2, 2005, in which you stated: ``We do not view a 
safeguards agreement that would allow India to withdraw 
facilities or material from safeguards as acceptable?''

    Answer. It will be incumbent on India to clarify what it 
means by the ``corrective measures'' it claims it may seek 
should fuel supply become disrupted. India will need to clarify 
its intent in this respect in its discussions with the IAEA. 
While India has indicated that it intends to continue campaign 
mode operation of particular downstream facilities, it has 
agreed to safeguards in perpetuity on its civil reactors. The 
U.S. position remains that safeguards must be applied in 
perpetuity, including on nuclear material used or produced in 
those facilities. We have just begun to engage with India 
regarding the details of the question of fuel supplies. We 
believe that India can be provided with the assurances it seeks 
for fuel supply without compromising the need for safeguards in 
perpetuity.


    Question (9)(c). India's separation plan document also said 
that safeguards would be tied to an uninterrupted supply of 
reactor fuel and provide ``for corrective measures that India 
may take to ensure uninterrupted operation of its civilian 
nuclear reactors in the event of disruption of foreign fuel 
supplies,'' and that the United States would help India to 
create a nuclear fuel reserve for use in case there was any 
interruption in supply.
    Wouldn't a reactor fuel reserve enable India to ride out 
any U.S. or international sanctions that might be imposed if 
some future Indian government were to test or use nuclear 
weapons, divert U.S. equipment for military purposes, or 
proliferate nuclear weapons technology? Would it make sense to 
impose limits on India's use of any fuel reserve?

    Answer. Secretary Rice has noted clearly that we ``reserve 
the right'' to take appropriate action should India violate our 
understanding. As we have made clear to the Indian government, 
the Initiative is contingent on India's continued testing 
moratorium and compliance with its safeguards arrangements. We 
believe that the Indian government intends to uphold the 
continuation of the test moratorium it committed to in the July 
18, 2005 Joint Statement, and that it will act in good faith to 
uphold the safeguards agreements it has committed to undertake 
with the IAEA.
    As indicated above, we have just begun to engage with India 
regarding the details of any fuel supplies. Any U.S. exports of 
fuel to India would require an export license from the NRC, the 
issuance of which must be based in part on a judgment by the 
Executive Branch that the proposed export will not be inimical 
to the common defense and security, in accordance with the 
provisions of the AEA. Such a license could be denied, 
suspended, or terminated if such a result is legally required 
or circumstances otherwise warrant.

          INDIA'S ``URANIUM CRUNCH'' AND U.S. NPT OBLIGATIONS

    Question (10)(a). K. Subrahmanyam, a prominent Indian 
strategist, wrote in December that ``the country is short of 
uranium'' and that it was necessary to ``get imported uranium 
for'' India's power reactors, so as ``to conserve all our 
indigenous uranium for weapon production purposes.'' But some 
commentators have questioned this.
    To what extent does India lack enough uranium to meet both 
its civil and military needs over the next 20 years?

    Answer. The IAEA recently reported India's estimated 
uranium stocks to be approximately 95,000 metric tons, 
predicated on data provided by the Indian government. Of this 
sum, scientists from India's Department of Atomic Energy 
estimate that about 54,600 metric tons are reasonably-assured 
uranium resources, and roughly 40,000 metric tons in probable 
(but unproven) reserves. A definitive response to the specific 
question of whether India has enough uranium to meet both its 
civil and military needs, and when it might run out, can only 
be provided by the Government of India.
---------------------------------------------------------------------------
    \1\ IAEA-TECDOC-1463, September 2005.
    \2\ A.B. Awati and R.B. Grover, ``Demand and Availability of 
Uranium Resources in India,'' in Recent Developments in Uranium 
Exploration, Production, and Environmental Issues (Vienna, Austria: 
International Atomic Energy Agency, September 2005).


    Question (10)(b). K. Subrahmanyam, a prominent Indian 
strategist, wrote in December that ``the country is short of 
uranium'' and that it was necessary to ``get imported uranium 
for'' India's power reactors, so as ``to conserve all our 
indigenous uranium for weapon production purposes.'' But some 
commentators have questioned this.
    Is it true that plutonium production for nuclear weapons 
requires more uranium than does power production?

    Answer. Megawatt for megawatt--yes. Operating a reactor for 
production of weapons-grade plutonium generally uses more 
uranium than operating a reactor optimized for production of 
electricity. But in terms of entire national programs--no. A 
modest nuclear power program would use far more uranium than a 
modest nuclear weapons program. Whereas a modest nuclear power 
program of several gigawatts electric would require hundreds of 
tons of uranium per year, a nuclear weapons program may require 
on the order of several tens of tons of uranium per year to 
produce several nuclear weapons per year.


    Question (10)(c). K. Subrahmanyam, a prominent Indian 
strategist, wrote in December that ``the country is short of 
uranium'' and that it was necessary to ``get imported uranium 
for'' India's power reactors, so as ``to conserve all our 
indigenous uranium for weapon production purposes.'' But some 
commentators have questioned this.
    Won't the U.S. nuclear deal and foreign suppliers of 
``civil'' reactor fuel thus be helping India's nuclear weapons 
program, by enabling it to conserve its domestic uranium 
supplies for that purpose?

    Answer. The Initiative does not cap Indian nuclear weapons 
production, but nothing to be provided to India under the 
Initiative will be used to enhance India's military capability 
or add to its military stockpile. 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.
    Based on our discussions with the Indian government, we do 
not believe that India plans to increase significantly its 
nuclear weapon production. India 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.


    Question (10)(d). K. Subrahmanyam, a prominent Indian 
strategist, wrote in December that ``the country is short of 
uranium'' and that it was necessary to ``get imported uranium 
for'' India's power reactors, so as ``to conserve all our 
indigenous uranium for weapon production purposes.'' But some 
commentators have questioned this.
    During the negotiations leading up to the July 18 Joint 
Statement and the March 2 separation offer, did the Department 
of State seek intelligence estimates of the status of India's 
nuclear weapons program and the likely impact of this agreement 
on that program? If so, please arrange for the committee to 
receive copies of those estimates.

    Answer. The Department of State, together with other 
Executive branch departments and agencies, engaged as 
appropriate with the Intelligence Community on issues relating 
to India's nuclear program--both its nuclear energy- and 
nuclear weapons-related dimensions. These interactions were not 
in the nature of a National Intelligence Estimate, but rather 
topical briefings, discussions, and reports.


    Question (11)(a). Arguably, the India deal and proposed NSG 
guidelines changes will enable India to devote all its domestic 
uranium to military purposes.
    What are the implications of that for U.S. compliance with 
its obligation, under Article I of the Nuclear Non-
Proliferation Treaty, ``not in any way to assist, encourage, or 
induce any non-nuclear weapon State to manufacture or otherwise 
acquire nuclear weapons or other nuclear explosive devices?''

    Answer. The U.S.-India Initiative is about civil nuclear 
cooperation, not about India's strategic weapons program. 
Nothing that we are proposing would violate our NPT 
obligations, including the Article I obligations cited above. 
We remain fully committed to upholding all of our NPT 
obligations.
    Under Article I of the NPT, nuclear-weapon states such as 
the U.S. undertake, inter alia: ``. . . not in any way to 
assist, encourage, or induce any non-nuclear weapon State to 
manufacture or otherwise acquire nuclear weapons or other 
nuclear explosive devices.'' Under Article III(2) of the NPT, 
all state parties undertake not to provide certain nuclear 
material and equipment to any non-nuclear weapon state (which 
includes non-parties, such as India) for peaceful purposes 
unless the nuclear material will be subject to safeguards.
    The NPT does not treat peaceful nuclear cooperation under 
safeguards as assisting a non-nuclear weapon state to 
manufacture nuclear weapons. Indeed, Article III(2) establishes 
the basis under which NPT parties may engage in nuclear 
cooperation with safeguarded facilities in countries that are 
not parties and do not have full-scope safeguards. The practice 
of the parties confirms this view, as a number of countries--
the United States, Canada, Russia, France, China--have provided 
fuel to India's safeguarded facilities, both before and after 
the NPT entered into force (and before and after India's 1974 
detonation of a nuclear explosive device). Russia is also 
currently providing two light water reactors for India's civil 
nuclear energy program.
    In The Nuclear Non-Proliferation Treaty (the leading 
treatise on the negotiation of the NPT), Mohamed Shaker reached 
the same conclusion: ``Almost any kind of international nuclear 
assistance is potentially useful to a nuclear-weapon program. 
However, the application of safeguards to all peaceful nuclear 
assistance to non-nuclear weapon States, as required by Article 
III, provides a means to establish and clarify the peaceful 
purposes of most international nuclear assistance.''
    This conclusion is also supported by the practice of the 
parties to the NPT. The U.S. and Canada engaged in nuclear 
cooperation with India before and after the NPT entered into 
force. The supply of fuel under facility-specific (INFCIRC/66) 
safeguards agreements was understood to satisfy our obligations 
under the NPT. Even after India's 1974 detonation, fuel was 
provided to India's safeguarded Tarapur reactors by the United 
States, France, and Russia. Such fuel supply was understood to 
be consistent with the NPT. The Nuclear Suppliers Group did not 
make the political decision to adopt full-scope safeguards as a 
condition of supply until 1992.
    The argument that foreign fuel supply could allow India to 
devote its domestic uranium substantially or even exclusively 
to its weapons program, should India so desire, does not change 
this legal conclusion. As previously noted, nothing in the NPT, 
its negotiating history, or the practice of the parties 
supports the notion that fuel supply to safeguarded reactors 
for peaceful purposes could be construed as ``assisting in the 
manufacture of nuclear weapons'' for purposes of Article I. 
Nuclear material and equipment exported by the U.S. would not 
be involved in any stage of the process of manufacturing 
nuclear weapons.
    In essence, nuclear cooperation under safeguards does not 
fundamentally differ from other forms of energy cooperation 
(e.g., oil supply, clean coal technology, alternative fuels). 
All such energy assistance would arguably relieve India of its 
reliance on domestic uranium for energy production. Yet such 
energy assistance clearly could not be viewed as assisting 
India in the manufacture of nuclear weapons.


    Question (11)(b). Arguably, the India deal and proposed NSG 
guidelines changes will enable India to devote all its domestic 
uranium to military purposes.
    Has the Department prepared or acquired any legal analysis 
of the implications of this deal for our NPT obligations? If 
so, please provide copies of such analyses to the committee. If 
not, please commission such an analysis and provide the 
results.

    Answer. The answer to 11(a) above sets forth the 
Department's conclusions as to whether the proposed peaceful 
nuclear cooperation with India is compatible with our NPT 
obligations. Nothing that we are proposing under this 
Initiative would violate our NPT obligations.

                         REGIONAL IMPLICATIONS

    Question (12)(a). Indian production of more nuclear weapons 
could have repercussions in Pakistan and China.
    Isn't Pakistan likely to see India's declaration of 8 
``military'' reactors as a threat? Won't that increase the 
pressure on Pakistan to increase its own nuclear weapons 
production?

    Answer. 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. Indeed, by 
bringing nearly two-thirds of India's nuclear facilities under 
safeguards 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 could be used for this purpose.
    We have kept the Pakistani government informed about our 
discussions with India at every appropriate stage. Moreover, 
both India and Pakistan have publicly and privately indicated 
their unilateral commitments to pursue only what they term 
credible minimum deterrents.
    Any potential for an Indo-Pakistani arms competition will 
be determined by bilateral relations between India and 
Pakistan. We would note that their current bilateral relations 
appear to be improving. Indian Prime Minister Singh recently 
offered a treaty of peace, security, and friendship to 
Pakistan. Pakistan's Foreign Office immediately welcomed the 
offer as a ``positive acknowledgement'' of the need to move 
forward on Kashmir and other bilateral issues, and said that 
both countries needed to take ``bold steps to resolve the 
outstanding issues.'' As part of their Composite Dialogue, 
India and Pakistan are discussing an agreement concerning 
prevention of nuclear accidents and other confidence building 
measures.


    Question (12)(b). Indian production of more nuclear weapons 
could have repercussions in Pakistan and China.
    Won't India's protection of its nuclear weapons program 
make it more difficult for China to refrain from assisting 
Pakistan again?

    Answer. China became a party to the Nuclear Non-
Proliferation Treaty in 1992; it is obligated under Article I 
not in any way to assist, encourage, or induce any non-nuclear-
weapon state to manufacture or acquire nuclear weapons. China 
pledged in 1996 not to provide assistance to any unsafeguarded 
nuclear facilities in any country. As part of its joining the 
Nuclear Suppliers Group (NSG) in 2004, China disclosed its 
intention to continue cooperation with Pakistan under the 
grandfathering exception to the NSG Guideline provisions 
requiring full-scope safeguards as a condition of nuclear 
supply. This cooperation would include life time support and 
fuel supply for the safeguarded Chasma I and II nuclear power 
plants, supply of heavy water and operational safety service to 
the safeguarded Karachi nuclear power plant, and supply of fuel 
and operational safety service to the two safeguarded research 
reactors at PINSTECH. As a member of the NSG, China has 
pledged--and is expected--to abide by the NSG Guidelines on the 
transfers of nuclear equipment, technology and material.
    If China did seek to provide additional reactors to 
Pakistan, it would need NSG accommodation. The NSG operates by 
consensus, so China would need the support of all other 
participating governments to proceed. We do not believe that 
the 45 member states of the Nuclear Suppliers Group would agree 
to such an accommodation, and we do not support such an 
Initiative with Pakistan.


    Question (13)(a). Pakistan has reacted adversely to the 
notion that India will get civil nuclear commerce, while 
Pakistan is denied that benefit.
    What repercussions will this have in other policy areas, 
such as our effort to get Pakistan to crack down on all 
terrorist groups in that country (rather than just on al 
Qaeda)?

    Answer. There are no indications that the Civil Nuclear 
Cooperation Initiative will have an impact on other policy 
areas related to Pakistan. We have kept the Pakistani 
government informed about our ongoing discussions with India, 
and explained our reasons for not exploring a similar 
arrangement with Pakistan. At the same time, we continue to 
build upon a strong counterterrorism foundation to further 
extend our relationship with Pakistan. Foreign Secretary Riaz 
Khan and a delegation will visit Washington in the last week of 
April to initiate the U.S.-Pakistan Strategic Dialogue. The 
parties will discuss a broad range of areas for cooperation, 
including in education, energy, economics, nonproliferation, 
and other issues.
    Pakistan continues to maintain its unilateral commitment to 
undertake what it calls a ``credible minimum deterrent.''


    Question (13)(b). Pakistan has reacted adversely to the 
notion that India will get civil nuclear commerce, while 
Pakistan is denied that benefit.
    How will the United States act if China presses for a 
``Pakistan exception'' similar to the ``India exception'' that 
the United States proposes in the Nuclear Suppliers Group?

    Answer. Of the three states that have never been parties to 
the Nuclear Non-Proliferation Treaty, India's circumstances are 
unique. It faces real and growing energy needs; it has an 
advanced civil nuclear infrastructure and program; it has a 
solid record in refraining from nuclear exports; and it has 
made enhanced nonproliferation commitments that, when 
implemented, will more closely align it with the global 
nonproliferation mainstream than at any previous time.
    The United States is joined by other states, such as 
France, the United Kingdom, Russia, and Australia, in viewing 
India as a special case. Because the NSG works on the basis of 
consensus, any participating government, including the United 
States, can block consensus on actions by the group. There must 
be a consensus of all 45 NSG countries in order for there to be 
an accommodation to the NSG Guidelines for India, or for any 
other state that may seek such treatment.
    Thus, any other NSG participating government that might 
seek similar accommodations for a partner state--for example, 
as some have suggested, the hypothetical case of China seeking 
an accommodation for Pakistan--would need the support of all 
other participating governments to implement such 
accommodation. We do not believe that the 45 member states of 
the Nuclear Suppliers Group would reach consensus on such an 
accommodation, and we do not support such an Initiative with 
Pakistan.
    While news reports have cited Pakistani officials as also 
seeking normalization of nuclear trade and commerce, the 
factors that make the Joint Statement appropriate in India's 
case are not present in either Pakistan or Israel--and 
certainly not in NPT violators such as North Korea or Iran.


    Question (13)(c). Pakistan has reacted adversely to the 
notion that India will get civil nuclear commerce, while 
Pakistan is denied that benefit.
    How will the United States act if China makes such a 
``Pakistan exception'' its price for approval of an ``India 
exception'' in the NSG?

    Answer. We have no information to indicate that the Chinese 
government is The Proposed Legislation even considering such a 
position and it would not be prudent to speculate.

                        THE PROPOSED LEGISLATION

    Question (14)(a). Section 1(a) of the proposed legislation 
begins: ``Notwithstanding any other provision of law. . . . ''
    Why was that phrase included?

    Answer. That phrase was used because the provisions of the 
proposed legislation are intended to supplant certain 
provisions of existing law that would otherwise apply to 
peaceful nuclear cooperation with India.


    Question (14)(b). Section 1(a) of the proposed legislation 
begins: ``Notwithstanding any other provision of law. . . . ''
    What other laws do you wish to supersede? Please be 
specific.

    Answer. (1) Section 123 of the Atomic Energy Act of 1954 
(AEA) with respect to the congressional action necessary to 
bring into effect a bilateral agreement for peaceful nuclear 
cooperation exempted by the President from one or more of the 
provisions of section 123(a);

    (2) Section 128 of the AEA with respect to the requirement 
for a waiver annually of the requirement that the country to 
receive a nuclear export under NRC license have IAEA full-scope 
safeguards; and

    (3) Section 129 of the AEA with respect to the procedure 
and standard for Presidential waiver of the any of the 
sanctions in section 129.

    We have not identified any other current statutory 
provisions that would be superseded by this provision, but 
nonetheless wish to ensure that these modifications to the 
procedures under section 123 and the waiver authority under 
sections 128 and 129 are effective notwithstanding any 
provisions of law that would require otherwise.


    Question (15)(a). In response to a question for the record 
from the committee's hearing of November 2, 2005, you stated 
that `` `full civil nuclear cooperation' with India will not 
include enrichment or reprocessing technology. We have not yet 
determined whether such a prohibition would extend to heavy 
water production.''
    Why does the administration's proposed legislation not 
reflect the enrichment and reprocessing limitation?

    Answer. The determination in the proposed legislation 
incorporates elements of the U.S.-India Joint Statement; this 
was not one of those elements. Moreover, it is not necessary 
for the legislation to reflect that limitation, which will be 
embodied in the bilateral agreement for peaceful nuclear 
cooperation.


    Question (15)(b). In response to a question for the record 
from the committee's hearing of November 2, 2005, you stated 
that `` `full civil nuclear cooperation' with India will not 
include enrichment or reprocessing technology. We have not yet 
determined whether such a prohibition would extend to heavy 
water production.''
    Why does its proposed NSG resolution not include such a 
limit, either?

    Answer. The transfer of enrichment and reprocessing 
equipment and technology is addressed in the NSG Guidelines, 
INFCIRC/254/Rev.7/Part 1. Therefore, it was not deemed 
necessary for the proposed resolution to address the matter. We 
have indicated to our NSG partners that we do not intend to 
supply enrichment and reprocessing technologies.


    Question (15)(c). In response to a question for the record 
from the committee's hearing of November 2, 2005, you stated 
that ```full civil nuclear cooperation'' with India will not 
include enrichment or reprocessing technology. We have not yet 
determined whether such a prohibition would extend to heavy 
water production.''
    What was the final decision regarding heavy water 
production?

    Answer. The U.S. does not foresee transferring heavy water 
production equipment or technology to India, and the draft 
bilateral peaceful nuclear cooperation agreement accordingly 
makes no provisions for such transfers.
    While we seek consensus on an accommodation to allow NSG 
suppliers to enter into peaceful nuclear cooperation with 
India, including supply of civil nuclear reactors and fuel for 
nuclear power production, we have no indication of current 
plans on the part of any of the NSG Participating Governments 
to transfer heavy water production equipment or technology to 
India.


    Question (16)(a). Paragraph 1(b)(1) of the proposed 
legislation requires the President to certify that India has 
provided ``a credible plan'' for separating civil and military 
facilities ``and has filed a declaration regarding its civil 
facilities with the IAEA.''
    Does the administration believe that the March 2 plan meets 
the first test of that paragraph, even though it does not list 
all facilities to be declared ``civil?''

    Answer. With respect to 1(b)(1), India's plan to separate 
its civil and military facilities and plans has been submitted 
to the U.S. Government and in our view meets this criterion. 
For it to be credible and defensible from a nonproliferation 
standpoint, it had to capture more than just a token number of 
Indian nuclear facilities, which it did by encompassing nearly 
two-thirds of India's current and planned thermal power 
reactors as well as all future civil thermal and breeder 
reactors. Importantly, for the safeguards to be meaningful, 
India had to agree to apply IAEA safeguards in perpetuity; it 
did so. Once a reactor is under IAEA safeguards, it will remain 
there permanently and without any conditions. Further, in our 
view the plan also needed to include the upstream and 
downstream facilities associated with the safeguarded reactors 
to provide a true separation of civil and military programs. 
India committed to these steps, and we have concluded that its 
separation plan meets the criteria established: it is credible, 
transparent, and defensible from a nonproliferation standpoint.


    Question (16)(b). Paragraph 1(b)(1) of the proposed 
legislation requires the President to certify that India has 
provided ``a credible plan'' for separating civil and military 
facilities ``and has filed a declaration regarding its civil 
facilities with the IAEA.''
    Will a declaration filed with the IAEA meet the second 
test, if it is not yet complete?

    Answer. We fully expect that India in the near future will 
provide the IAEA with a detailed list of all civil facilities, 
along with anticipated timelines for the application of 
safeguards to those facilities. Senator Joseph R. Biden (#17a) 
Question:The Proposed Legislation


    Question (17)(a). Paragraph 1(b)(2) of the proposed 
legislation requires the President to certify that an agreement 
between India and the IAEA has entered into force ``requiring 
the application of safeguards in accordance with IAEA practices 
to India's civil nuclear facilities....''
    Would safeguards ``in a campaign mode'' be ``in accordance 
with IAEA practices?''

    Answer. As noted in the answer to 7c, safeguards have been 
applied in this mode before to the Tarapur reprocessing plant.


    Question (17)(b). Paragraph 1(b)(2) of the proposed 
legislation requires the President to certify that an agreement 
between India and the IAEA has entered into force ``requiring 
the application of safeguards in accordance with IAEA practices 
to India's civil nuclear facilities....''
    Would safeguards tied to uninterrupted reactor fuel supply 
be ``in accordance with IAEA practices?''

    Answer. Except for the facility-specific agreements already 
in place, India's safeguards agreement has not yet been 
negotiated with the IAEA. The U.S. position remains that 
safeguards must be applied to India's civil nuclear facilities 
in perpetuity. We have had discussions with India regarding the 
question of fuel supplies, and those discussions will continue. 
We believe that India can be provided with appropriate fuel 
supply assurances without compromising the requirement that 
there be safeguards in perpetuity.


    Question (18)(a). Paragraph 1(b)(3) of the proposed 
legislation requires the President to certify that ``India and 
the IAEA are making satisfactory progress toward implementing 
an Additional Protocol that would apply to India's civil 
nuclear program.''
    Does the administration interpret that paragraph as 
requiring that an Additional Protocol have been signed or 
ratified? Or would ongoing negotiations suffice?

    Answer. The administration would prefer that India sign an 
Additional Protocol with the IAEA prior to the initiation of 
civil nuclear cooperation, but does not expect an Additional 
Protocol to be signed prior to submitting the bilateral 
agreement for peaceful nuclear cooperation to the U.S. 
Congress. Under the language of paragraph 1(b)(3), it would be 
a judgment call for the President whether the progress achieved 
by India and the IAEA in working out the terms of an Additional 
Protocol was satisfactory. This approach takes account of the 
fact that India's Additional Protocol will necessarily be 
tailored to its safeguards agreement, and therefore is likely 
to be negotiated after that safeguards agreement. 
Implementation of the Additional Protocol may also take some 
time.


    Question (18)(b). Paragraph 1(b)(3) of the proposed 
legislation requires the President to certify that ``India and 
the IAEA are making satisfactory progress toward implementing 
an Additional Protocol that would apply to India's civil 
nuclear program.''
    What standards has the administration suggested for an 
Indian Additional Protocol with the IAEA?

    Answer. The negotiation of the terms of an Additional 
Protocol will be a matter between India and the IAEA. The 
negotiated document will need to be approved by the IAEA Board 
of Governors, which includes the United States.
    Since India will have a military nuclear program that it 
does not declare to the IAEA, its Additional Protocol would 
differ from the Model Additional Protocol. Nevertheless, it 
should advance the IAEA's ability to track potential nuclear 
proliferation worldwide. In that regard, reporting of exports 
listed in Annex II of the Model Additional Protocol would be of 
greatest value. India has pledged to conclude an Additional 
Protocol with respect to its civil facilities, and the Model 
Additional Protocol has provisions that deal with the ``sites'' 
of nuclear facilities. India has also listed as civil a number 
of research and development and other facilities that would not 
normally be subject to safeguards, but could be subject to the 
reporting and access provisions of an Additional Protocol.


    Question (18)(c). Paragraph 1(b)(3) of the proposed 
legislation requires the President to certify that ``India and 
the IAEA are making satisfactory progress toward implementing 
an Additional Protocol that would apply to India's civil 
nuclear program.''
    Could ``satisfactory progress'' be achieved if the 
Additional Protocol were similar to China's very limited 
protocol, rather than to the one the United States has signed?

    Answer. India pledged in the July 2005 Joint Statement to 
conclude an Additional Protocol with respect to its civil 
nuclear facilities. This goes beyond what is included in 
China's Additional Protocol, which covers only certain 
cooperation with other countries. China, of course, is 
recognized as a nuclear weapon state, while India is not. The 
details of India's Additional Protocol remain to be determined 
and negotiated between India and the IAEA. Like India's 
safeguards agreement, the Additional Protocol to that agreement 
would be tailored to India's specific circumstances.


    Question (19). Paragraph 1(b)(5) of the proposed 
legislation requires the President to certify only that ``India 
is supporting international efforts to prevent the spread of 
enrichment and reprocessing technology.'' Don't we want India 
to commit more specifically not to provide enrichment or 
reprocessing technology to any country that does not already 
have a full-up capability?

    Answer. Paragraph 1(b)(5) captures part of the Indian 
commitment with regard to enrichment and reprocessing 
technology as expressed in the July 18, 2005 Joint Statement 
(i.e., to ``support international efforts to prevent the spread 
of enrichment and reprocessing technology.'') We expect India 
to fulfill the other part of this Joint Statement commitment as 
well by refraining from the transfer of enrichment and 
reprocessing technologies to states that do not already have 
them.


    Question (20)(a)-(c). David Albright of the Institute for 
Science and International Security warns that Indian 
procurement tenders for equipment to be used in its own uranium 
enrichment facility can be used by other countries to learn how 
to produce components for such a facility.

          (a) What do you make of his findings?

          (b) What are the implications of the fact that one or 
        more firms in the A.Q. Khan network also assisted 
        India?

          (c) What is the administration doing to convince 
        India to act more responsibly in its procurement of 
        equipment for its nuclear weapons program?

    Answer. We would be happy to discuss these allegations in a 
classified setting, as appropriate.


    Question (21)(a). Paragraph 1(b)(6) of the proposed 
legislation requires the President to certify that India ``is 
ensuring that the necessary steps are being taken to secure 
nuclear materials and technology'' through ``the application'' 
of new laws and regulations and through ``harmonization and 
adherence to'' NSG and MTCR guidelines.
    Why not require that India's laws and regulations be as 
good as ours?

    Answer. The practice of states is to seek conformity to 
established international standards, and India has agreed to 
meet those international standards with respect to the NSG and 
MTCR. This approach is reflected in the guidelines of the 
various supplier groups, including the NSG and MTCR. UN 
Security Council Resolution 1540 establishes a mechanism for 
achieving this goal. This widely accepted approach was taken 
with India.


    Question (21)(b). Paragraph 1(b)(6) of the proposed 
legislation requires the President to certify that India ``is 
ensuring that the necessary steps are being taken to secure 
nuclear materials and technology'' through ``the application'' 
of new laws and regulations and through ``harmonization and 
adherence to'' NSG and MTCR guidelines.
    Why is there no mention of ``enforcement,'' as opposed to 
the more ambiguous word ``application?''

    Answer. In the context of this Presidential determination, 
the term ``application'' would have the same meaning and effect 
as ``enforcement.''


    Question (22)(a). Paragraph 1(b)(7) of the proposed 
legislation requires the President to certify that supply to 
India ``is consistent with United States participation in the 
Nuclear Suppliers Group.''
    What does that mean?

    Answer. The language of 1(b)(7) requires an objective 
determination that peaceful nuclear cooperation with India is 
consistent with our status as a member of the Nuclear Suppliers 
Group (NSG), including our commitment to adhere to the NSG 
Guidelines. This means that the NSG will have to have made a 
policy decision to accommodate such civil nuclear cooperation 
with India. Such decisions are taken by consensus of all 45 
member states.


    Question (22)(b). Paragraph 1(b)(7) of the proposed 
legislation requires the President to certify that supply to 
India ``is consistent with United States participation in the 
Nuclear Suppliers Group.''
    Would the administration be able to make such a 
certification absent a formal NSG decision, adopted by 
consensus, to permit such supply to India?

    Answer. We will not undercut the NSG. Consistent with NSG 
Guidelines, Participating Governments of the NSG act by 
consensus. It would not be appropriate to speculate on the 
nature or timing of members' action to address the question of 
nuclear supply to India. Paragraph 1(b)(7) reflects this 
context, including the understanding that the NSG will operate 
on a consensus basis.


    Question (22)(c). Paragraph 1(b)(7) of the proposed 
legislation requires the President to certify that supply to 
India ``is consistent with United States participation in the 
Nuclear Suppliers Group.''
    If one or more countries were to hold out against a change 
in the guidelines, could the administration (perhaps with the 
support of other countries) reinterpret NSG rules to allow an 
informal ``India exception'' to go into effect?

    Answer. As previously noted, paragraph 1(b)(7) is based on 
the understanding that the NSG operates on a consensus basis.


    Question (23)(a). Subsection 1(d) of the proposed 
legislation says: ``A determination under subsection (b) shall 
not be effective if the President determines that India has 
detonated a nuclear explosive device after the date of 
enactment of this Act.''
    What is the effect of this provision?

    Answer. Under the proposed legislation, if the President 
made the determination in subsection 1(b), the operation of 
certain requirements of the Atomic Energy Act would be modified 
with respect to U.S.-India civil nuclear cooperation. However, 
subsection 1(d) provides that the President's determination 
``shall not be effective'' in modifying the operation of these 
legal requirements if India is found to have detonated a 
nuclear explosive device after enactment of the legislation. In 
other words, if India detonated a device after enactment of the 
legislation, U.S.-India civil nuclear cooperation would be 
subject to the Atomic Energy Act without modification. However, 
previously completed transactions (e.g., nuclear exports that 
were legal when made) would not be rendered invalid. Issues 
relating to the ``right of return'' of any such exports would 
be subject to the bilateral agreement for peaceful nuclear 
cooperation.
    Detonation would also invalidate the waiver under Brownback 
II (P.L. 106-79, section 9001). This would reinstate a wide 
range of sanctions under the Glenn amendment (Arms Export 
Control Act, section 102(b)), as well as sanctions under the 
Export-Import Bank Act (section 2(b)(4)).


    Question (23)(b). Subsection 1(d) of the proposed 
legislation says: ``A determination under subsection (b) shall 
not be effective if the President determines that India has 
detonated a nuclear explosive device after the date of 
enactment of this Act.''
    If India were to conduct a nuclear test after the date of 
enactment, but before the submission to Congress of a peaceful 
nuclear cooperation agreement, would such an agreement once 
again require a Presidential waiver under section 128 of the 
Atomic Energy Act?

    Answer. Any waiver of section 128 based on the proposed 
legislation would become ineffective upon a finding of 
detonation. Any subsequent NRC licensing of nuclear exports to 
India would be subject to section 128 without modification, as 
set forth in the Atomic Energy Act. The timing of any Indian 
nuclear test (before or after submission of the agreement for 
nuclear cooperation) would not affect this outcome.
    Question (23)(c. Subsection 1(d) of the proposed 
legislation says: ``A determination under subsection (b) shall 
not be effective if the President determines that India has 
detonated a nuclear explosive device after the date of 
enactment of this Act.''
    If India were to conduct a nuclear test after the 
submission to Congress of a peaceful nuclear cooperation 
agreement, but before its entry into force, would that 
agreement require the approval of both houses of Congress?

    Answer. Indian detonation of a nuclear explosive device 
would be inconsistent with the fundamental premises of the 
U.S.-India Civil Nuclear Cooperation Initiative, including 
India's commitment under the July 18, 2005 Joint Statement to 
continue its unilateral nuclear testing moratorium which India 
has had in place since 1998. We believe India takes this 
commitment seriously, and that it intends to uphold it.
    Should India nonetheless take such action while Congress 
was engaged in reviewing the bilateral peaceful nuclear 
cooperation agreement, the political conditions necessary to 
bring that agreement into force would no longer exist. In 
addition, as a legal matter, Congressional review of the 
agreement would no longer be subject to the proposed 
legislation, but would be subject to section 123 of the Atomic 
Energy Act without modification.


    Question (23)(d). Subsection 1(d) of the proposed 
legislation says: ``A determination under subsection (b) shall 
not be effective if the President determines that India has 
detonated a nuclear explosive device after the date of 
enactment of this Act.''
    If India were to conduct a nuclear test after a peaceful 
nuclear cooperation agreement had entered into force, would the 
peaceful nuclear cooperation agreement be null and void? Or 
would it remain in effect?

    Answer. The bilateral peaceful nuclear cooperation 
agreement would remain in effect as a matter of international 
law. However, exports of nuclear equipment and material to 
India under that agreement would be prohibited under section 
129 of the Atomic Energy Act (which provides for such a 
prohibition if a country detonates a nuclear explosive device); 
any prior waiver of section 129 based on a Presidential 
determination under the proposed legislation would no longer be 
effective.


    Question (24)(a)-(c) How would the implementation of a 
peaceful nuclear cooperation agreement be affected if India 
were to engage in other conduct of concern, such as diversion 
of U.S. equipment or proliferation of nuclear weapons 
technology, if India were to suspend or end its phased 
separation of nuclear facilities, which will stretch out until 
2014, or if India were to end or suspend its acceptance of IAEA 
safeguards?

          (a) Would all nuclear-related export licenses be 
        suspended?

          (b) Would equipment or material received from the 
        United States have to be returned?

          (c) Would India become subject to any fines or other 
        penalties?

    Answer. Since the U.S.-India agreement for peaceful nuclear 
cooperation is under negotiation, it is premature to discuss 
how specifically it will be implemented. However, 
administration officials have told Congress that we are seeking 
an agreement that satisfies all current requirements of U.S. 
law except for the full-scope IAEA safeguards requirement in 
section 123(a)(2) of the Atomic Energy Act (AEA). Section 
123(a)(4) of the AEA--hich will be applicable--rovides that any 
agreement for peaceful nuclear cooperation with a non-nuclear 
weapon state (which an agreement with India would be, in 
accordance with U.S. law) must include ``a stipulation that the 
United States shall have the right to require the return of any 
nuclear materials and equipment transferred pursuant thereto 
and any special nuclear material produced through the use 
thereof if the cooperating party detonates a nuclear explosive 
device or terminates or abrogates an agreement providing for 
IAEA safeguards.''
    In addition, such activities by India would likely trigger 
a cut-off of nuclear cooperation under section 129 of the AEA. 
The proposed legislation would allow for waiver of this 
prohibition based on the Presidential determination in 
subsection 1(b). In this regard, the President would take into 
account that the activities described in the question would 
likely call into question the fundamental premises upon which 
the Civil Nuclear Cooperation Initiative is based.
    In addition, several nonproliferation sanctions laws 
provide for measures against countries that: detonate a nuclear 
explosive device; terminate, abrogate, or materially violate a 
safeguards agreement with the IAEA; or materially violate a 
nuclear cooperation agreement with the U.S. (See section 102(b) 
of Arms Export Control Act; section 2(b)(4) of Export-Import 
Bank Act; section 530 of Foreign Relations Authorization Act 
(P.L. 103-236)).


    Question (25)(a). The administration's proposed legislation 
would exempt India from the provisions of section 123 of the 
Atomic Energy Act. Under current law, given that the President 
would have to waive the requirement of section 123.a(2) of that 
Act, such an agreement would require approval by both houses of 
Congress.
    Under this proposed legislation, could Congress stop such 
an agreement unless, within 60 days of continuous session, it 
enacted a joint resolution of disapproval, including voting to 
override a Presidential veto?

    Answer. Congress would have 90 days of continuous session 
to enact legislation disapproving the agreement for 
cooperation. If the President vetoed the legislation and 
Congress wanted nonetheless to disapprove, it would be able to 
vote on whether to override.


    Question (25)(b). The administration's proposed legislation 
would exempt India from the provisions of section 123 of the 
Atomic Energy Act. Under current law, given that the President 
would have to waive the requirement of section 123.a(2) of that 
Act, such an agreement would require approval by both houses of 
Congress.
    Does the administration intend to submit a peaceful nuclear 
cooperation agreement that would require the waiver of any 
requirement other than that in section 123.a(2)? If so, please 
explain.

    Answer. No. The administration intends to submit an 
agreement for peaceful nuclear cooperation that satisfies the 
requirements set forth in section 123(a) of the AEA with the 
sole exception of section 123(a)(2). The draft legislation 
proposed by the administration would also provide for a 
Presidential waiver, on the basis of specified determinations, 
of provisions of AEA sections 128 and 129 in the specific case 
of India.

   GUARDING AGAINST DIVERSION OF CIVIL COMMERCE TO MILITARY PURPOSES

    Question (26)(a). The Indian separation offer puts some 
Canadian-type reactors under safeguards and leaves others of 
the same type declared ``military.'' It also proposes only 
intermittent safeguards over the spent fuel reprocessing 
facility and perhaps, if there were imported fuel 
interruptions, over reactors as well.
    Under these circumstances, how can the United States ensure 
that nuclear equipment or technology sold to India is not 
diverted or otherwise assists its nuclear weapons program?

    Answer. The IAEA safeguards required by this Initiative are 
designed to detect, with a view to preventing, the diversion to 
military use of any materials, technologies, or equipment 
provided to India's civil nuclear facilities.
    The United States and other suppliers will insist that 
nuclear items supplied to India, and special nuclear material 
produced through their use, remain under IAEA safeguards. This 
is a separate issue from whether India will maintain IAEA 
safeguards in perpetuity on the facilities on its civil list. 
While India has not yet completed negotiations with the IAEA, 
the U.S. position is well-known.


    Question (26)(b). The Indian separation offer puts some 
Canadian-type reactors under safeguards and leaves others of 
the same type declared ``military.'' It also proposes only 
intermittent safeguards over the spent fuel reprocessing 
facility and perhaps, if there were imported fuel 
interruptions, over reactors as well.
    Did the administration obtain any intelligence analysis on 
this matter? If so, please arrange for the committee to receive 
copies of such analysis.

    Answer. The Intelligence Community has considered this 
issue, and has already briefed Senate Foreign Relations 
Committee and other Congressional staff. We would be happy to 
further discuss this and other related issues in a classified 
session, as appropriate.


    Question (26)(c).The Indian separation offer puts some 
Canadian-type reactors under safeguards and leaves others of 
the same type declared ``military.'' It also proposes only 
intermittent safeguards over the spent fuel reprocessing 
facility and perhaps, if there were imported fuel 
interruptions, over reactors as well.
    Will the United States have clear rights to inspect Indian 
use of U.S. exports? Should there be similar requirements in an 
NSG context?

    Answer. 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. Moreover, an Additional 
Protocol will provide for broadened IAEA access to facilities 
and information regarding nuclear-related activities. These 
steps are designed to detect, with a view to preventing, 
diversion of any civil nuclear cooperation to India's military 
program.


    Question (26)(d). The Indian separation offer puts some 
Canadian-type reactors under safeguards and leaves others of 
the same type declared ``military.'' It also proposes only 
intermittent safeguards over the spent fuel reprocessing 
facility and perhaps, if there were imported fuel 
interruptions, over reactors as well.
    How much additional funds will the IAEA need for 
safeguards? How much of that amount will India pay? Will the 
United States have to put up more money for this?

    Answer. Under the Indian separation plan announced in 
March, the major additional facilities that would come under 
safeguards will be 10 reactors: 8 heavy-water reactors and 2 
Russian-supplied light-water reactors, which will be placed 
under safeguards between 2006 and 2014. Moreover, while no 
specific plans have been announced, the Indian government has 
indicated that it will also seek to purchase additional civil 
reactors over the next several years and all such reactors will 
come under safeguards.
    Safeguards costs are difficult to estimate precisely, but 
in the past the IAEA has ascribed direct safeguards costs 
(staff time, cost of travel, cost of equipment used in 
inspections, cost of sample analysis) to similar heavy water 
reactors of about $200,000--250,000 per year per facility, and 
about $50,000 per year per facility for light water reactors.
    The total safeguards budget of the IAEA for 2004 was about 
$100 million. As a general rule, safeguards applied subject to 
legally binding agreements are paid for out of the IAEA's 
general budget, to which all member states contribute. In a 
number of cases states, or groups of states such as EURATOM, 
have voluntarily shared some safeguards costs with the Agency, 
for example by purchasing equipment installed in facilities in 
those states.

   THE NSG AND ASSURING A LEVEL PLAYING FIELD FOR AMERICAN COMPANIES

    Question (27)(a). What was China's reaction to the U.S. 
proposal at the NSG consultative group meeting in Vienna?
    Answer. Since NSG deliberations are generally of a 
confidential nature, we would be happy to brief the committee 
in an appropriate setting on our discussions with NSG partners, 
including China, regarding the U.S. proposal to accommodate 
civil nuclear cooperation with India.


    Question (27)(b). Is it true that some states suggested not 
lifting restrictions on nuclear trade with India until it stops 
fissile material production for weapons and signs the 
Comprehensive Test-Ban treaty? If so, which states were these?

    Answer. NSG members have discussed many specific issues in 
this context, including the prospect for India suspending 
fissile material production or signing the Comprehensive Test 
Ban Treaty. Since NSG deliberations are generally of a 
confidential nature, we would be happy to brief the committee 
in an appropriate setting on our discussions with NSG partners 
regarding the U.S. proposal to accommodate civil nuclear 
cooperation with India.


    Question (28). The draft proposal that the United States 
submitted to the NSG experts meeting would enter into force as 
soon as it was adopted by the NSG. But U.S. firms would be 
unable to sell to India until a peaceful nuclear cooperation 
agreement entered into force. That could give foreign firms a 
head start of many months, considering that an agreement with 
India has not even been negotiated. How should the timing of 
U.S. action and NSG action be adjusted so that companies from 
all countries get to make sales at about the same time?

    Answer. In part to ensure that U.S. firms are not 
disadvantaged with respect to their foreign competitors, we are 
moving forward in parallel on the measures that are required 
for the civil nuclear cooperation to commence: (a) obtaining 
NSG consensus on civil nuclear cooperation with India, (b) the 
negotiation of a U.S.-India agreement for peaceful nuclear 
cooperation, and (c) Congressional consideration of the 
Initiative and any necessary legislative changes. While it is 
not possible to ensure that these separate actions occur at the 
same time, in order to ensure a level playing field for U.S. 
business, we believe in principle that Congressional action 
should precede NSG action.


    Question (29)(a). The U.S. proposal to the NSG would allow 
each member to approve sales to ``safeguarded civil nuclear 
facilities in India as long as the participating Government 
intending to make the transfer is satisfied that India 
continues to fully meet'' its commitments under the July 18 
Joint Statement.
    Why should other countries become independent judges of how 
faithfully India was fulfilling commitments made to the United 
States? Why not require suppliers to consult with the United 
States, or with the NSG, on the question of whether India 
continues to fully meet its commitments?

    Answer. As is the case with all of the multilateral 
nonproliferation regimes, implementation of the NSG Guidelines 
by Participating Governments, including nuclear export 
approvals, is a matter of national discretion, and subject to 
each Participating Government's national laws, regulations, and 
policies. Participating Governments make a political commitment 
to have in place laws and regulations that ensure effective 
implementation of the NSG Guidelines. The NSG Guidelines also 
call for consultations regarding implementation of the 
Guidelines, especially in sensitive cases.
    After a consensus policy decision is reached in the NSG 
context to allow nuclear cooperation with India, it would be up 
to each supplier to continue to satisfy itself that India 
continued to meet its various nonproliferation and safeguards 
commitments. If a supplier developed a concern that the 
criteria were not being met, then the supplier would be 
expected to raise the issue in the NSG with other partners.


    Question (29)(b). The U.S. proposal to the NSG would allow 
each member to approve sales to ``safeguarded civil nuclear 
facilities in India as long as the participating Government 
intending to make the transfer is satisfied that India 
continues to fully meet'' its commitments under the July 18 
Joint Statement.
    Why did you not exclude enrichment and reprocessing 
facilities from those to which sales could be made? Under this 
NSG proposal, could sales be made to the reprocessing facility 
that is used for both civil and military purposes?

    Answer. Within the NSG, there has been no discussion of 
possible transfers of enrichment and reprocessing technology to 
India or any Indian requests for such technology. As indicated 
above, we do not intend to transfer such technology, and our 
bilateral agreement for peaceful nuclear cooperation will 
reflect this. Moreover, NSG Participating Governments have made 
clear that they currently are not contemplating any new 
transfers of enrichment and reprocessing technology and in fact 
have been considering strengthening controls over such 
transfers.
    Transfers of reprocessing equipment or technology for use 
in an unsafeguarded Indian reprocessing facility that is used 
for military purposes would not be permissible under the NPT, 
the NSG Guidelines, or U.S. law.
    With respect to possible transfers to an Indian 
reprocessing facility that is used alternately for military and 
civil purposes, and that is intermittently under IAEA 
safeguards (i.e., when being used for a civil purpose), as 
noted in our answer to question 7(e), the supply of items could 
only take place if the facility were under safeguards at the 
time of supply. Therefore, if India wished to then reprocess 
unsafeguarded spent fuel in an unsafeguarded campaign mode, it 
would have an obligation to the supplier under the terms of 
supply to remove any such supplied components or equipment from 
the facility before operating the facility in that mode. 
Removal would not appear to be a practical option if the 
components or equipment were important to the operation of the 
plant. Moreover, as a matter of policy, the United States does 
not intend to supply enrichment or reprocessing technology, 
equipment, or components to India.


    Question (30). What is the administration's position on 
Russia's recent proposal to supply fuel to the Tarapur 
reactors, which the administration opposed in 2001?

    Answer. We expressed our strong disappointment to both 
Russia and India regarding the Russian decision to once again, 
as in 2001, supply nuclear fuel to the Tarapur reactors. The 
United States and the great majority of other NSG Participating 
Governments strongly disagreed with the Russian position that 
the safety exemption to the full-scope safeguards supply policy 
in the NSG Guidelines applied to Tarapur. We also expressed 
concern to both Russia and India that the Russian decision to 
supply without prior NSG consultation would lead NSG 
Participating Governments to be less open-minded when 
considering the U.S. proposal for civil nuclear cooperation 
with India.

                  STATEMENTS BY UNDER SECRETARY BURNS

    Question (31)(a). Secretary Burns, you told the U.S. 
Chamber of Commerce on March 14 that ``India has . . . promised 
that all of the upstream and downstream nuclear research 
facilities . . . shall come under safeguards.'' But the 
separation plan document tabled in the Indian Parliament on 
March 7, 2006, did not contain a full list of such facilities.
    Where is India's promise made clear?

    Answer. In paragraph 14 of India's separation plan, 
sections (v) and (vi) address the issue of upstream and 
downstream facilities. To date, a full list of the facilities 
to be safeguarded has not been made public by the Indian 
government. We fully expect that India will make such a list 
available in the near future.


    Question (31)(b). Secretary Burns, you told the U.S. 
Chamber of Commerce on March 14 that ``India has . . . promised 
that all of the upstream and downstream nuclear research 
facilities . . . shall come under safeguards.'' But the 
separation plan document tabled in the Indian Parliament on 
March 7, 2006, did not contain a full list of such facilities.
    Will you provide the committee with the negotiating record 
of this agreement, so that we can understand precisely what the 
two parties have agreed to?

    Answer. We would be happy to brief the committee on our 
understanding of the scope of the undertakings in the U.S.-
India Civil Nuclear Cooperation Initiative, including 
discussions between the U.S. and India related to it.


    Question (31)(c). Secretary Burns, you told the U.S. 
Chamber of Commerce on March 14 that ``India has . . . promised 
that all of the upstream and downstream nuclear research 
facilities . . . shall come under safeguards.'' But the 
separation plan document tabled in the Indian Parliament on 
March 7, 2006, did not contain a full list of such facilities.
    Has India also promised that the fuel used in its civil 
reactors and the spent fuel removed from them will be under 
safeguards?

    Answer. Under the Initiative, India has committed to place 
its current and planned civil reactors under IAEA safeguards. 
The fuel used in all the reactors designated as civil will be 
safeguarded after entry into force of the safeguards agreement 
with respect to that facility, and the safeguards will follow 
the material if it is removed from the reactor facility (for 
example, to a repository). Under current arrangements, India's 
four safeguarded reactors and associated spent fuel are already 
under IAEA safeguards. We would not expect that spent fuel that 
was removed from civil reactors before the Initiative goes into 
effect and IAEA safeguards are applied would be safeguarded.


    Question (31)(d). Secretary Burns, you told the U.S. 
Chamber of Commerce on March 14 that ``India has . . . promised 
that all of the upstream and downstream nuclear research 
facilities . . . shall come under safeguards.'' But the 
separation plan document tabled in the Indian Parliament on 
March 7, 2006, did not contain a full list of such facilities.
    If so, why is only one spent fuel repository noted in the 
plan tabled in India's Parliament?

    Answer. Spent fuel pools are for temporary storage of spent 
fuel. Most spent fuel pools are located at reactors and 
considered part of the reactor facility, but the two 
specifically identified in India's separation plan--paragraph 
14, section (vi)--are ``away from reactor'' spent fuel storage 
pools that would also be safeguarded. We would expect that 
spent fuel storage pools of reactors declared as civil would be 
safeguarded, consistent with IAEA practice. (Separate, away-
from-reactor spent fuel storage facilities would be safeguarded 
if they contain safeguarded spent fuel from civil reactors.)


    Question (32)(1). Secretary Burns, you told the U.S. 
Chamber of Commerce that ``India has decided--to adhere to the 
Australia Group and the Wassenaar Arrangement.'' That would be 
an important, positive step; India has previously declined to 
bar chemical weapons-usable exports unless the items were on 
the smaller lists in the Chemical Weapons Convention.
    Has any Indian official announced this decision?

    Answer. We have discussed with India the importance of 
India harmonizing its control lists with those of the Australia 
Group and Wassenaar Arrangement. To date, we have not received 
an official announcement by the Indian government indicating it 
has harmonized its control lists or unilaterally adhered. We 
continue to discuss these issues with the Indian government in 
the context of our bilateral discussions.


    Question (32)(b). Secretary Burns, you told the U.S. 
Chamber of Commerce that ``India has decided--to adhere to the 
Australia Group and the Wassenaar Arrangement.'' That would be 
an important, positive step; India has previously declined to 
bar chemical weapons-usable exports unless the items were on 
the smaller lists in the Chemical Weapons Convention.
    Can you provide the committee any paper that documents this 
decision?

    Answer. We will inform Congress of any developments 
concerning India's harmonization or unilateral adherence as 
they occur.


    Question (32)(c). Secretary Burns, you told the U.S. 
Chamber of Commerce that ``India has decided--to adhere to the 
Australia Group and the Wassenaar Arrangement.'' That would be 
an important, positive step; India has previously declined to 
bar chemical weapons-usable exports unless the items were on 
the smaller lists in the Chemical Weapons Convention.
    Has India prepared legislation to conform its export 
control law to those regimes? Are you assisting India in that 
regard?

    Answer. India's May of 2005 ``Weapons of Mass Destruction 
and Their Delivery Systems (Prohibition of Unlawful Activities) 
Act'' (WMD Act) and subsequent implementing regulations greatly 
strengthen India's export control capabilities. On the whole, 
the Act and implementing regulations bring Indian export 
controls closer in line with widely accepted export control 
standards for preventing WMD proliferation and are consistent 
with the kinds of measures that UNSCR 1540 requires states to 
implement. We continue to discuss with the Indian government 
the steps for bringing its export control standards and 
practices fully in line with those of the international 
regimes, including issues relating to implementation and 
enforcement. We also continue to engage with India in 
cooperative programs under the Export Control and Related 
Border Security (EXBS) program.

                          TEXTS OF AGREEMENTS

    Question (33)(a). Please provide to the committee copies of 
any signed or initialed documents between the United States and 
India on this matter.
    Please provide also any agreed minutes, exchanges of 
letters, or memoranda documenting each country's understanding 
of the agreements that have been reached.

    Answer. The U.S.-India Civil Nuclear Cooperation Initiative 
is set out in the July 18, 2005 and March 2, 2006 Joint 
Statements, which are political statements and were neither 
signed nor initialed. The separation plan was not a bilateral 
document, but a unilateral document issued by India, following 
discussions with the United States. There are no other 
documents of the sort described in the question.


    Question (33)(b). Please provide to the committee copies of 
any signed or initialed documents between the United States and 
India on this matter.
    Please also provide, and up-date periodically, the rolling 
text of the U.S.-India peaceful nuclear cooperation agreement.

    Answer. We have begun initial discussions on the bilateral 
agreement for peaceful nuclear cooperation with India. We would 
be happy to arrange briefings for the committee on the outlines 
of what is contained in the text. In this regard, we note that 
the texts of the section 123 agreements with non-nuclear weapon 
states that are currently in force and previously reviewed by 
Congress are illustrative of the content we are seeking in an 
agreement with India (with the exception of a provision for 
full-scope IAEA safeguards in India). Congress will have an 
opportunity to fully review the agreement once negotiations are 
complete and the agreement has been submitted for congressional 
review.

                              ----------                              


VII.--Hearing of the U.S. Senate Committee on Foreign Relations, April 
                                5, 2006

                              ----------                              




                 U.S.-INDIA ATOMIC ENERGY COOPERATION:

                   THE INDIAN SEPARATION PLAN AND THE

                 ADMINISTRATION'S LEGISLATIVE PROPOSAL

                              ----------                              


                       WEDNESDAY, APRIL 5, 2006,

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:32 a.m. in Room 
SH-216, Hart Senate Office Building, Hon. Richard G. Lugar, 
chairman of the committee, presiding.
    Present: Senators Lugar [presiding], Chafee, Allen, 
Alexander, Biden, Sarbanes, Kerry, Feingold, Boxer, Bill 
Nelson, and Obama.

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

    The Chairman. This meeting of the Senate Foreign Relations 
Committee is called to order.
    The committee meets today to examine the United States-
India Civilian Nuclear Agreement. The Indian Nuclear Agreement 
is one of the most ambitious foreign policy initiatives to come 
before Congress in many years. In view of the importance of the 
committee's work on this agreement, we're especially pleased to 
welcome Secretary of State Condoleezza Rice. We look forward to 
this public opportunity to explore, in depth, the agreement and 
its implications.
    Last Wednesday, the committee met in closed session with 
Under Secretary Nick Burns and Under Secretary Bob Joseph to 
hear the Bush administration's views with regard to the India 
Nuclear Agreement. The briefing was well attended, and members 
listened carefully to the presentation. The briefing 
encompassed a broad range of topics, but I believe we have only 
scratched the surface of this intricate agreement and the 
national security questions it has raised. Indeed, some months 
ago, I submitted to the State Department 82 questions related 
to the agreement as the initial step toward establishing a 
dialogue that would help Congress make an informed decision. 
The State Department has provided answers to all 82 of these 
questions. A copy of this lengthy exchange has been provided to 
members of the committee, and it can be accessed on my office 
Web site by the public.
    I expect, however, that this hearing will generate many 
additional questions from members. Given the complexity and 
importance of the issue, the administration must continue to be 
responsive to this committee and to the entire Congress.
    The committee is cognizant of how valuable a closer 
relationship with India could be for the United States. I 
believe we will find little argument in Congress with the 
general premise that the national security and economic future 
of the United States would be enhanced by a strong and enduring 
partnership with India. Our nations share common democratic 
values, and the potential of our economic engagement is 
limitless. The progress made by India in the last decade is one 
of the world's major success stories. With a well-educated 
middle class that is larger than the entire United States 
population, India can be an anchor of stability in Asia and an 
engine of global economic growth.
    Despite this success, the Indian Government recognizes that 
much of its growing population still lives in poverty; and to 
overcome these conditions, it will need more trade, more 
scientific and technical cooperation, and, most of all, more 
energy.
    India's energy needs are expected to double by 2025. The 
United States has an interest in expanding energy cooperation 
with India to develop new technologies, cushion supply 
disruptions, cut greenhouse gas emissions, and prepare for 
declining global fossil-fuel reserves.
    The United States' own energy problems will be exacerbated 
if we do not forge energy partnerships with India, with China 
and other nations experiencing rampant economic growth. That is 
why I've introduced Senate bill 2435, the Energy, Diplomacy, 
and Security Act, which would encourage international energy 
dialogues and advance a broad range of energy diplomacy goals.
    But in pursing a nuclear relationship with India, we must 
deal with some fundamental facts. India has not signed the 
Nuclear Non-Proliferation Treaty. It has built and tested 
nuclear weapons, and it has declared its intention to continue 
its nuclear weapons programs and the production of fissile 
material. Although the U.S.-India Civilian Nuclear Agreement 
would move India into a closer relationship with the 
International Atomic Energy Agency, and would put more Indian 
reactors under safeguards, it would not prevent India from 
expanding its nuclear arsenal. If Congress approves this 
agreement, we'll be establishing a new course after decades of 
declining any cooperation with India's nuclear program.
    It was apparent, from our earlier briefing, that the Bush 
administration considered the implications of this agreement on 
our international nonproliferation posture. After weighing many 
factors, the President and his team came down on the side of 
concluding the agreement with the Indian Government. They 
judged that the deal could be implemented without undercutting 
our nonproliferation advocacy and that its benefits included 
stronger Indian cooperation with international nonproliferation 
efforts.
    Now Congress must undertake its own exhaustive 
deliberations, and we must reach our own conclusions. No one 
should suggest that the answers to our questions are either 
easy or obvious. What is required is a thorough bipartisan 
review of this agreement in the context of nonproliferation 
goals, global energy requirements, environmental concerns, and 
our geostrategic relationship with India.
    We especially thank Secretary Rice for joining us today 
after a long and successful trip, and for this opportunity to 
engage with her on this very important agreement.
    And, indeed, Secretary Rice, we are honored that you are 
here. I'll recognize my distinguished colleague Senator Biden 
for his opening statement, at the time that he comes to the 
hearing this morning. But, for the moment, we would like to 
proceed with your testimony, and we ask that it be as 
comprehensive as you wish. Do not worry about time limits. We 
are here to hear you, and then to have an opportunity to raise 
questions with you.

    STATEMENT OF HON. CONDOLEEZZA RICE, SECRETARY OF STATE, 
                      DEPARTMENT OF STATE

    Secretary Rice.  Well, thank you very much, Senator Lugar.
    Mr. Chairman, members of the committee, thank you very much 
for this opportunity to come and discuss with you this, indeed, 
pathbreaking U.S.-India Civil Nuclear Cooperation Agreement. 
And it obviously deserves the support of the U.S. Senate, but 
we also understand that it deserves the thorough review of the 
Senate before giving that support. And so, that is why I'm 
here. And I want to note that we are prepared to continue our 
discussions and our briefings to the point that you feel that 
you have the information that you need to make this 
determination.
    Let me note that I have longer, more--a fuller testimony 
that I would like to have entered into the record.
    The Chairman. It will be made part of the record in full.
    Secretary Rice.  Thank you very much.
    India's society is open and free. It is transparent and 
stable. It is multiethnic. It is multi---a multireligious 
democracy that is characterized by individual freedom and the 
rule of law. It is a country with which we share common values.
    India will soon be the world's most populous nation, and 
America's exports to India have doubled in only the past 4 
years. And, of course, India is a rising global power that we 
believe can be a pillar of stability in a rapidly changing 
Asia. In other words, in short, India is a natural partner for 
the United States.
    But, for too long during the past half century, during the 
cold war, in particular, because of both domestic policies and 
foreign policies, India and the United States were estranged. 
And one element of this estrangement was India's complete 
disregard--or India's complete isolation from the policies that 
the United States was concerned about concerning proliferation 
of weapons of mass destruction.
    Now, as a result of India's decision to have a nuclear 
program, to test nuclear weapons, to build a nuclear program, 
as did Pakistan, India's adversary in that region, we adopted 
nonproliferation policies to try and constrain and change 
Indian behavior. But I think that it is entirely clear now that 
those past nonproliferation policies did not achieve their 
goals. In fact, they had no effect on India's development of 
nuclear weapons. They didn't prevent India and Pakistan from 
testing nuclear weapons in 1998. They contributed little to 
lessening regional tensions, which brought India and Pakistan 
repeatedly to the brink of war. And all of this simply resulted 
in a more isolated India, especially isolated from the 
standards and practices of the nuclear nonproliferation 
establishment that have been development and maturing over the 
last decades?
    Now let us consider the future that we could have instead. 
The initiative that we are putting before you and asking for 
legislation to amend the Atomic Energy Act of 1954 will advance 
international security, enhance energy security, further 
environmental protection, and increase business opportunities 
for both our countries. All of these benefits must be viewed in 
this larger context, of course, of how the initiative itself 
elevates the U.S.-India relationship to the new strategic level 
that we desire.
    The initiative, first and foremost, will deepen that 
strategic partnership. The United States and India are laying 
the foundation for cooperation on major issues in the region 
and beyond, building on and building up a broad relationship 
between our peoples and governments.
    I was just with President Bush in India, and I can tell you 
that the discussion was broad and multifaceted. It was a 
discussion not just between governments, but between peoples, 
discussions about how to improve agriculture in India, much as 
we helped to spur the Green Revolution in India of the '60s. We 
talked about the ability for India to access the new 
technologies to increase its agricultural production. There 
were discussions about Indian education and the desire for all 
of India's people to be able to access the new knowledge-based 
economy that is growing so rapidly in India. And, of course, 
there were discussions between CEOs of Indian companies and 
American companies, showing that this is a broad relationship 
that is not just government-to-government relationship, but one 
that is fundamentally affecting our societies.
    Now, in order to fully realize the potential of this vision 
for India, we do have to deal with the longstanding impediments 
associated with civil nuclear cooperation, and we need to 
resolve them once and for all. We believe that this initiative 
will unlock the progress of our expanding relationship in other 
areas.
    The initiative will clearly enhance energy security. India 
is a nation of over a billion people, with an economy growing 
at approximately 8 percent each year. It has a massive and 
rapidly growing appetite for energy. It is now the world's 
sixth largest consumer of energy. Diversifying energy's--
India's energy sector will help it to meet its ever increasing 
needs and, more importantly, ease its reliance on hydrocarbons 
and unstable sources, like Iran. This is good for the United 
States.
    Secondly, the initiative will benefit the environment. 
Nuclear energy is, after all, clean energy. And providing India 
with an environmentally friendly energy source like nuclear 
energy is an important goal. India's carbon emissions increased 
61 percent between 1990 and 2001. That number is surpassed only 
by China.
    This initiative will create opportunities for American 
jobs. Nuclear cooperation will provide a new market for 
American nuclear firms, as well as assist India's economic 
development. The initiative may add as many as three to five 
thousand new direct jobs in the United States, and about 10,000 
to 15,000 indirect jobs in the United States, as the United 
States is able to engage in nuclear commerce and trade with 
India. By helping India's economy to grow, we would, thus, be 
helping our own.
    Finally, this initiative does strengthen the international 
nuclear nonproliferation regime. I know that there has been a 
lot of concern about the Non-Proliferation Treaty and India's 
refusal to join, and, indeed, the view that India should not 
join as a nuclear-weapons state, a view that we continue to 
hold.
    I want to say to the chairman and to the committee that the 
United States values greatly the Non-Proliferation Treaty. It 
is one of the cornerstones of our nonproliferation policy. But, 
of course, there is a broader nonproliferation regime, as well. 
And we believe that the continued isolation of our strategic 
partner from that regime is the wrong policy choice. The 
initiative is, thus, a strong net gain for nonproliferation, in 
general.
    I might just note that the custodian of the 
nonproliferation regime, Mohammed ElBaradei, has been, from the 
very beginning, a strong supporter of this initiative, and he 
remains so. I should note, also, that Great Britain and France 
are strong supporters, and Russia supports it, as well. Both 
Prime Minister Blair and President Chirac have issued 
statements in that regard.
    Now, I want to take just a moment to take, head-on, if you 
will, several criticisms that have been made of the initiative. 
And let me associate myself with what the chairman said, it is 
a pathbreaking agreement, and, of course, one always has to 
balance the various factors in deciding whether or not it is 
worth pursuing. We believe that the criticisms can be 
addressed. And I will address them here.
    First, India would never accept a unilateral freeze or cap 
on its nuclear arsenal. We raised this with the Indians, but 
the Indians said that its plans and policies must take into 
account regional realities. No one can credibly assert that 
India would accept what would amount to an arms control 
agreement that did not include other key countries, like China 
and Pakistan.
    Second, the initiative with India does not seek to 
renegotiate or amend the NPT. India is not, and is not going to 
become, a member of the NPT as a nuclear-weapons state. We are 
simply seeking to address an untenable situation. India has 
never been party to the NPT, and this agreement does not 
bring--but this agreement does bring India into the 
nonproliferation framework, and thus strengthen the regime.
    Third, civil nuclear cooperation with India will not lead 
to an arms race in South Asia. Nothing we or any other 
potential international suppliers provide to India under this 
initiative will enhance its military capacity or add to its 
military stockpile. Moreover, the nuclear balance in the region 
is a function of political and military--the political and 
military situation in the region. We are far more likely to be 
able to influence those regional dynamics from a position of 
strong relations with India, and, indeed, with Pakistan.
    Fourth, this initiative does not complicate our policies 
toward countries like North Korea or Iran. It is simply not 
credible to compare India to North Korea or to Iran. While Iran 
and North Korea are violating their IAEA obligations, India is 
making new obligations by bringing it--the IAEA into the Indian 
program and seeking peaceful international cooperation. Iran, 
and especially North Korea, are, of course, closed, 
nondemocratic societies. India is a democracy. In fact, India 
is increasingly doing its part to support the international 
community's efforts to curb the dangerous nuclear ambitions of 
Iran.
    In sum, the U.S.-India Civil Nuclear Cooperation Initiative 
is a strategic achievement. It's good for America. It's good 
for India. And it's good for the international community.
    I know that there is a history that we are trying to 
overcome. But the time comes when you must deal with the 
realities and, indeed, overcome that history. President Bush 
and I look forward to Congress as a full partner in this 
initiative. Your support for this legislation is crucial, and 
we ask you to lend it.
    Together, we can seize this tremendous opportunity to 
solidify a key partnership that will advance American 
interests, the ideals of peace and prosperity and liberty, for 
which we stand.
    Thank you, Mr. Chairman. I very much look forward to 
answering the questions of the distinguished members of the 
committee.
    Thank you.

    [The prepared statement of Secretary Rice follows:]

       Prepared Statement of Secretary of State Condoleezza Rice

    Mr. Chairman and Members of the committee, thank you for the 
opportunity to testify today. I am pleased to discuss with you why 
President Bush and I think that the U.S.-India Civil Nuclear 
Cooperation Initiative deserves the support of the United States 
Senate.
    On March 2 in New Delhi, the United States and India reached a 
historic understanding on civil nuclear cooperation. This strategic 
achievement will advance energy security, further environmental 
protection, foster economic and technological development in both of 
our countries, bolster international security, and strengthen the 
global nonproliferation regime. All of these benefits, however, must be 
viewed in a still larger, still greater context: What this initiative 
does to elevate the U.S.-India relationship to a new, strategic height.
    Recall for a moment where we were before this initiative. For too 
long during the past half century, differences over domestic policies 
and international objectives kept India and the United States 
estranged. We had a bedeviled relationship, a structural ambivalence 
between the world's leading democracy and the world's largest 
democracy. For years, relations between our two countries were 
constrained, thereby limiting America's ability to shape a productive 
future for South and Central Asia, which will be one of the most 
dynamic regions in the 21st century.
    Our past nonproliferation policies toward India had not achieved 
their purposes. They had no effect on India's development of nuclear 
weapons. Nor did they prevent India and Pakistan from testing nuclear 
weapons in 1998. They had contributed little to lessening regional 
tensions, which brought India and Pakistan repeatedly to the brink of 
war.
    These policies also left us with a more dangerous energy future. 
They effectively forced India to rely on oil and gas from Iran and the 
Persian Gulf, or on destabilizing competition over waterways to produce 
hydroelectric power.
    All of this resulted in a more isolated India--isolated especially 
from the standards of the nuclear nonproliferation establishment, 
prevented from reaping the benefits of a long history of global 
cooperation. This left India fostering insular and resentful attitudes, 
protecting a sheltered nuclear industry.
    When President Bush came into office, he judged that our relations 
with India would be central to the future success of U.S. foreign 
policy in South Asia and around the world. He resolved to transform our 
relationship with India, and in the past five years, that is exactly 
what we have done. The world's oldest democracy is now building a 
global partnership with the world's largest democracy. As the President 
said in New Delhi: ``India in the 21st century is a natural partner of 
the United States because we are partners in the cause of human 
liberty.''
    This partnership is founded on common interests and shared ideals:

   Democracy: India's society is open and free, transparent and 
        stable. It is a vibrant, multi-ethnic, multi-religious 
        democracy characterized by individual freedom, the rule of law, 
        and a constitutional government that owes its power to free and 
        fair elections. It is a positive model in the international 
        community.

   Security: India is a rising global power and a pillar of 
        stability in a rapidly changing Asia. India will continue to 
        possess sophisticated military forces that, just like our own, 
        remain strongly committed to the principle of civilian control, 
        and will in the future help to promote peace in Asia and across 
        the world.

   Prosperity: India is committed to economic liberty and 
        strong growth. It has an immense, skilled, and youthful 
        workforce. It will soon be the world's most populous nation, 
        with the world's largest and fastest growing middle class. By 
        2025, India will most likely rank among the world's five 
        largest economies. American exports to India have doubled in 
        only the last four years.

    Developing civil nuclear cooperation with India represents the 
promise of this new partnership--a partnership that will become one of 
the most important we have with any country in the 21st century. Recall 
again where we were with India before we launched this initiative: a 
conflicted relationship, the wrong energy incentives, and a failed 
nonproliferation policy. Today, I want to discuss what we can have 
instead: a strategic partnership, enhanced energy security, greater 
environmental protections, increased business opportunities, and of 
course, a more secure future.
    Taken together, the before and after comparison is compelling: This 
initiative is good for America. It is good for India. And it is good 
for the international community. So let us move forward with it.
          the u.s.-india civil nuclear cooperation initiative
    Before I turn to the benefits of our Civil Nuclear Cooperation 
Initiative, let me first run through the specifics of the initiative 
itself. The basic agreement is this: India has pledged, for the first 
time in 30 years, to submit its entire civil nuclear program to 
international inspection and to take on significant new 
nonproliferation commitments in exchange for full civil nuclear 
cooperation with the international community. With this initiative, the 
world is expecting India to be a full partner in nonproliferation, and 
India is expecting the world to help it meet its growing energy needs.
    Specifically, India has agreed to place all future civil reactors--
both breeder and thermal--under permanent International Atomic Energy 
Agency (IAEA) safeguards and to continue its unilateral moratorium on 
nuclear testing. India will also place a majority (14 out of 22) of its 
existing and planned power reactors under safeguards by 2014. Under 
this initiative, 65 percent of India's thermal reactors will be brought 
under safeguards, a figure that the Indian government has said could 
rise as high as 90 percent as India procures more civil reactors in the 
next 15 years. To put this in perspective, imagine the alternative: 
Without this initiative, 81 percent of India's current power reactors--
and its future power and breeder reactors--would continue to remain 
outside of IAEA safeguards. The Indian nuclear power program would 
remain opaque, a nuclear black box.
    Once this initiative is implemented, potential American and 
international suppliers will be able to invest in India's safeguarded 
civil facilities solely for energy production and other peaceful 
purposes. The safeguards required by this initiative are designed to 
help detect, and thereby help prevent, the diversion to military use of 
any materials, technologies, or equipment provided to India's civil 
nuclear facilities. Once a reactor is under IAEA oversight, safeguards 
will be in place permanently and without any conditions.
    But that is not all. The Indian government will negotiate and sign 
an Additional Protocol with the IAEA, and it will work with the United 
States to conclude a multilateral Fissile Material Cutoff Treaty. India 
has also agreed to create a robust national export control system that 
includes harmonization with and adherence to the Missile Technology 
Control Regime and Nuclear Suppliers Group guidelines. Finally, India 
will continue its unilateral moratorium on testing and refrain from 
transferring enrichment and reprocessing technologies to states that do 
not possess them. Just last June, as part of our ongoing discussions on 
civil nuclear cooperation, India's parliament passed a landmark WMD 
export control law that significantly upgraded and improved India's 
ability to counter the proliferation of materials related to weapons of 
mass destruction. This law makes such proliferation a crime in India, 
just as it is in the United States.
    For this initiative to go forward now, both parties must meet their 
obligations. For our part, President Bush is committed to work with the 
U.S. Congress to amend relevant domestic laws--the Atomic Energy Act of 
1954--and to seek agreement within the Nuclear Suppliers Group to 
accommodate this cooperation. The United States will also negotiate an 
agreement on peaceful nuclear cooperation with India, which we will 
submit to the Congress, and seek to assure the reliable supply of 
nuclear fuel to India through multiple avenues and instruments.
    India has commitments as well, and it is already acting on them. In 
fact, the Chairman of India's atomic energy commission is traveling to 
Vienna this week to begin negotiations with the IAEA on both a 
safeguards agreement and an Additional Protocol. India has delivered to 
us a list of specific reactors to be placed under safeguards and a 
general timeline for doing so. Under this plan, all 14 reactors will be 
offered for safeguards by 2014. In addition, India will place 
associated upstream and downstream facilities under safeguards and has 
declared nine research facilities as civilian. India has also provided 
initial verbal comments on our draft agreement for peaceful nuclear 
cooperation.
    In the coming months, we hope that India will also take a number of 
additional measures to further strengthen its commitment to global 
nonproliferation. In addition to adhering to the Missile Technology 
Control Regime and Nuclear Suppliers Group Guidelines, as India 
committed in the July 18 Joint Statement, these additional measures 
include, for example, announcing its intention to participate in the 
Proliferation Security Initiative and harmonizing its export control 
lists with the Wassenaar Arrangement and the Australia Group. We are in 
constant discussion with our Indian counterparts and will continue to 
press these and other nonproliferation measures through the course of 
our strategic partnership.
    Mr. Chairman, as you know, implementing this initiative will 
require a carefully orchestrated series of events involving the 
coordination of not only the two governments, including the U.S. 
Congress, but also the IAEA and the Nuclear Suppliers Group. It is our 
vision and our hope that progress can be achieved on several fronts 
simultaneously.
    Once implemented, this initiative with India will benefit the 
United States in five important and linked ways.
1. The Initiative Will Deepen Our Strategic Partnership
    This initiative is a key element of our growing strategic 
partnership with India: we believe it will help make India one of our 
most valuable global partners and help make possible significant 
achievements in many other areas of cooperation.
    More than two million Indians, many of them now U.S. citizens, live 
in the United States. More Indians study in our universities than 
students from any other foreign country. India is the largest source of 
skilled temporary workers coming to the United States and the second 
largest source of legal migration. The United States and India have 
committed to doubling bilateral trade within three years.
    The explosive growth of private ties between our peoples is 
magnified by new initiatives between our governments. Last summer's 
historic summit between the President Bush and Prime Minister Singh 
embodied the strategic achievements of the first four years of our 
nations' new relationship. The President's recent visit to India has 
shown how much more can be accomplished. Both leaders committed 
themselves to fostering a second Green Revolution in agriculture, to 
advancing space exploration, and to establishing a new science and 
technology partnership. They pledged to increase democracy promotion 
efforts, to invest in energy security, and to double bilateral trade 
within three years. And they decided to expand defense cooperation 
through a new maritime security initiative.
    In other words, the United States and India are laying the 
foundation for cooperation on major issues in the region and beyond, 
building on and building up a broad relationship between our peoples 
and our governments. We will not fully realize this vision, however, 
unless the impediments associated with civil nuclear cooperation, which 
have complicated all efforts to improve bilateral relations during the 
last thirty years, are resolved once and for all. The structural 
ambivalence must be resolved. This initiative is the key that will 
unlock the progress of our expanding relationship.
    And imagine, Mr. Chairman, what would happen if this initiative 
were defeated, or changed in a way that fundamentally alters its 
substance. All the hostility and suspicion of the past would be 
redoubled. And think of Prime Minister Singh, who has braved the 
shouted dissent of his anti-American critics. We would hand the enemies 
of this new relationship a great victory--We would slide backward when 
we should be striding forward.
2. The Initiative Will Enhance Energy Security
    The global search for new and stable sources of energy is now a 
defining issue in all aspects of international life. Civil nuclear 
cooperation with India will help it meet its rising energy needs 
without increasing its reliance on unstable foreign sources of oil and 
gas, such as nearby Iran. Diversifying India's energy sector will help 
to alleviate the competition among India, the United States, and other 
rapidly expanding economies for scarce carbon-based energy resources, 
thereby lessening pressure on global energy prices.
    India--a nation of over a billion people, with an economy growing 
at approximately 8 percent each year--has a massive and rapidly growing 
appetite for energy. Huge population growth, expanding industrial 
production, economic development, urbanization, and increased motor 
vehicle ownership are all driving this insatiable energy demand. 
Between 1980 and 2001, demand increased by 208 percent. By contrast, 
China, often thought of as the next big energy consumer, saw a 130 
percent increase over the same period. In 2003, India was the sixth 
largest consumer of energy in the world behind only the United States, 
China, Russia, Japan, and Germany.
    To meet its mounting power demands, the Indian government plans to 
double its capacity to produce electricity within the next eight years. 
With Congressional endorsement of the U.S.-India Civil Nuclear 
Cooperation Initiative, a large proportion of that growth would be in 
clean nuclear technology.
    Currently, over 50 percent of India's total energy, and 70 percent 
of India's electric power generation, is derived from coal. Of the 
remaining 50 percent, nearly 35 percent is derived from oil; seven 
percent from natural gas; five percent from hydro-electric power; and 
about one percent from renewable sources like solar and wind. Only two 
percent of India's total power generation comes from nuclear energy. 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, and France roughly 78 
percent.
    India's operating civil nuclear power plants currently have 
approximately 3,310 megawatts of installed capacity. Given the 
opportunity, India plans to invest quickly in additional civil nuclear 
reactors so that, by 2020, its capacity to produce electricity from 
clean nuclear technology would reach 20,000 megawatts--a six-fold 
increase. Under this plan and further long-term objectives, 
approximately 20 percent of India's total energy production would 
eventually be met by nuclear technology, thus significantly decreasing 
the growth in its reliance on fossil fuels.
    Since the historic March 2 announcement, senior officials in 
India's atomic energy establishment have indicated their desire to 
exceed the 20,000 megawatts target through the accelerated import of 
high-unit capacity foreign reactors to further reduce their dependence 
on dirty coal and fossil fuels. This decrease will be welcome, as 
India's demand for oil and natural gas is immense and will only 
increase as its economy grows and industrializes. In 2005, India's net 
imports of oil totaled approximately 1.7 million barrels per day. Even 
with conservative estimates, these imports are predicted to grow to 2 
million barrels per day within only the next four years. Much of that 
oil is imported from unstable sources. As part of the newly launched, 
U.S.-India Energy Dialogue, the United States has committed to help 
India secure other stable sources of energy. The Civil Nuclear 
Cooperation Initiative is one significant element of that commitment.
3. The Initiative Will Benefit The Environment
    Civil nuclear cooperation, along with the deployment of cleaner 
fossil fuel technologies, will not only help India meet its energy 
needs, but it will do so in an environmentally-friendly way. India's 
heavy dependence on coal and oil for electricity generation has another 
negative side effect: high levels of carbon emissions, which have made 
India a major contributor to greenhouse gas emissions and global 
climate change. 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. According to the Department of Energy, between 2001 and 
2025, India's carbon emissions will grow by 3 percent annually, twice 
the predicted emissions growth in the United States. Air pollution and 
growth in greenhouse gases is a visible and significant fact of life in 
India's major cities.
    India's dependence on its domestically-produced coal raises many 
other environmental concerns. Indian coal is extremely energy 
inefficient. It produces about twice as much ash and particulate matter 
as American coal. And it emits far more nitrogen oxide (an element in 
photochemical smog) and carbon monoxide (a poisonous gas) than American 
coal does. Power plants are also the main source of Indian emissions of 
carbon dioxide, the most important greenhouse gas. In addition, mercury 
emissions from India's inefficient coal-fired plants can enter the food 
chain.
    These high emissions, along 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. Emissions from power 
plants are thought to be the prime contributor to the Atmospheric Brown 
Cloud now hovering over the Bay of Bengal and polluting many coastal 
areas. if this cloud grows and moves overland, as is currently 
expected, the resulting effects on public health would be disastrous. 
The health risks associated with India's pollution are thus negatively 
affecting not only the Indian population, but the population of the 
entire region.
    While the United States is working with India to integrate cleaner, 
more efficient, coal-burning technologies into its power plants, a 
rapid expansion of India's coal-fired generating capacity, just to meet 
basic energy needs, would make that work much more challenging. Slowing 
this expansion will help us achieve our aggressive objectives for 
slowing the growth in Indian pollution.
    To the extent that India expands its use of cleaner energy 
technology, the result will be reduced air pollution locally, 
regionally, and globally. Nuclear plants do not emit greenhouse gases. 
While some opponents of nuclear energy point to the problems associated 
with disposing of spent nuclear waste, the technology is readily 
available to store nuclear waste safely for thousands of years and 
prevent it from contaminating the surrounding environment. India's 
commitment to a closed cycle also permits it to manage its nuclear 
waste far more effectively while simultaneously utilizing the energy 
potential of its feedstock far more effectively.
    Of course, the Civil Nuclear Cooperation Initiative alone will not 
fully address Indian emissions of air pollution and greenhouse gases. 
It does, however, take a sizeable step in the right direction. Civil 
nuclear cooperation will advance the goals of the Asia-Pacific 
Partnership on Clean Development and Climate and is also an important 
piece of our Energy Dialogue, which aims to address India's energy 
needs from every perspective. As a critical step in reducing the growth 
of India's heavy dependence on coal and its greenhouse gas emissions, 
our civil nuclear initiative would be one of the greenest parts of 
India's new Green Revolution.
4. The Initiative Will Create Opportunities For U.S. Business
    This is a time of renaissance in the Indian-American relationship, 
punctuated by our tremendous growth in trade. In the past year alone, 
Boeing announced a $13 billion sale to India, and Cisco, Intel, and 
Microsoft all made major investments in India's high-tech sector. In 
July, when Prime Minister Singh visited Washington, he and President 
Bush announced the most ambitious strategic leap ever undertaken by our 
two governments, illustrated by joint ventures in 18 different fields, 
including the Civil Nuclear Cooperation Initiative.
    At its core, our initiative with India is not simply a government-
to-government effort. It was crafted with the private sector firmly in 
mind. Because it will fully open the door to civil nuclear trade and 
cooperation, this initiative is good for American business.
    India currently has 15 operating thermal power reactors, with seven 
under construction, but it intends to increase this number 
significantly. Meeting this ramp-up in demand for civil nuclear 
technology, fuel, and support services holds the promise of opening new 
business opportunities for American firms, which translates into new 
jobs, new incomes, and new markets for the United States. Indian 
officials indicate they plan to import at least eight new 1,000 
megawatt power reactors by 2012, as well as additional reactors in the 
years ahead. Preliminary private studies suggest that if American 
vendors win just two of these reactor contracts, American industry 
estimates it may add 3,000-5,000 new direct jobs and about 10,000-
15,000 indirect jobs in the United States.
    At the same time, participation in India's market will help make 
the American nuclear industry globally competitive, thereby benefiting 
our own domestic nuclear power sector. This legislation, and the 
associated bilateral peaceful nuclear cooperation agreement now being 
negotiated, will permit U.S. companies to enter the lucrative and 
growing Indian market--something they are currently prohibited from 
doing.
    An expanded Indian civil nuclear power industry will also help to 
take the pressure off the long-term global demand for energy. 
Increasing demand for natural resources causes our own energy prices to 
rise as well. To the extent that we can reduce the demand for fossil 
fuels, it will help the American consumer.
    Furthermore, this initiative will also significantly help India's 
economic development. Human development and economic growth depend on 
the reliable, affordable, and environmentally-friendly supply of energy 
to allow for the full production of goods and services. India is 
struggling to keep up with its energy demands, with many urban areas 
currently subject to unscheduled black-outs and routine daily 
interruptions of power. In 2005, there was an average electricity 
shortage of 10 percent and a peak excessive power demand of 15 percent. 
These shortages are expected to become more severe, thus preventing 
India's growing business and industry from functioning effectively. 
Such unreliability is detrimental to India's economic growth and its 
prospects for greater foreign investment. The Civil Nuclear Cooperation 
Initiative would provide India access to a privatized and more 
efficient nuclear energy market, enabling its economy to grow to its 
full potential. Needless to say, as India grows, it provides an ever 
bigger market for American exports. So by helping India's economy, we 
are in turn helping our own.
5. The Initiative Will Enhance The International Nuclear 
        Nonproliferation Regime
    Mr. Chairman, let me address the issue that has received the most 
attention since this initiative was announced: nuclear 
nonproliferation. I will start by saying unequivocally that this 
initiative is a net gain for global nonproliferation efforts. We better 
secure our future by bringing India into the international 
nonproliferation system, not by allowing India to remain isolated for 
the next thirty years the way it has been for the last thirty. We are 
clearly better off having India most of the way in rather than all the 
way out.
    There are some who doubt this, and I would now like to discuss some 
of the questions that have been raised about this initiative.
    First, I must address the belief that somehow this initiative could 
have been used to force India to accept a unilateral freeze or cap on 
its nuclear arsenal. The U.S. has achieved an important strategic 
objective by obtaining India's commitment to work toward a multilateral 
Fissile Material Cut-off Treaty. But India's plans and politics must 
take into account regional realities. No one can credibly assert that 
India would accept an arms control agreement that did not include the 
other key countries, namely China and Pakistan. Therefore trying to use 
American leverage to get India to make this unilateral move is an idea 
that is certain to fail. It is a poison pill to kill any possibility 
for change.
    Second, some have expressed concern that civil nuclear cooperation 
with India will weaken the NPT, or undermine global nonproliferation 
efforts. Dr. Mohamed ElBaradei, the Director General of the IAEA--the 
agency responsible for applying safeguards - does not share this 
concern. Just the opposite. Dr. ElBaradei publicly praised the 
initiative the day it was announced, stating that it will ``bring India 
closer as an important partner in the nonproliferation regime. . . . It 
would be a milestone, timely for ongoing efforts to consolidate the 
nonproliferation regime, combat nuclear terrorism and strengthen 
nuclear safety.'' Four of the five NPT-defined nuclear weapon states 
have also endorsed the initiative. In fact, British Prime Minister Tony 
Blair and French President Jacques Chirac even released public 
statements in which both refer to the benefits that this initiative has 
for international nonproliferation efforts.
    The global nonproliferation regime is a remarkable diplomatic 
achievement. Since its inception, the NPT and related international 
mechanisms have helped keep the number of nuclear-armed states to a 
minimum while spreading the benefits of civil nuclear technology to all 
who joined the treaty. We want India to participate more fully in 
sharing this global responsibility. This initiative aligns India more 
closely with international nuclear nonproliferation standards.
    Our initiative with India does not seek to renegotiate or amend the 
NPT. India is not, and is not going to become, a member of the NPT as a 
nuclear weapon state. Nothing we are proposing would violate our NPT 
obligations that we not ``in any way assist'' India's nuclear weapons 
program. We are seeking to address an untenable situation: India has 
never been a party to the NPT. It did not cheat. It simply developed 
nuclear weapons outside this context, a long time ago, finishing a 
program that was well underway before the NPT had been signed. India 
then found itself frozen for a generation in this anomalous state. It 
now faces substantial energy needs ahead that can be partly met through 
nuclear energy.
    Despite India's strong nuclear nonproliferation export record, its 
continued existence outside the global nonproliferation regime 
undermines the regime's interests and U.S. security goals over the long 
term. The real choice is this: do we want a state that intends to 
expand significantly its civil nuclear power production in the years 
ahead to remain outside the international nonproliferation regime? Or 
do we instead want it to adopt global nonproliferation practices while 
increasing our insight into its civil nuclear program? President Bush 
has made his choice, and it is the correct one.
    Third, others have asserted that this initiative permits India to 
expand its nuclear arsenal significantly. This is just not the case. 
The initiative does not cap Indian nuclear weapons production, but 
nothing under this initiative will directly enhance its military 
capability or add to its military stockpile. India could already build 
additional weapons within the limits of its capabilities if it so 
desired, with or without this deal. But the Indian government has 
repeatedly confirmed in public that it intends to expand its civil 
nuclear energy capability.
    Fourth, we believe that civil nuclear cooperation with India will 
not lead to an arms race in South Asia. In our view, the prospects for 
such an arms race will be determined by bilateral relations between 
India and Pakistan, not the Civil Nuclear Cooperation Initiative. It 
should be noted that these relations have been consistently improving 
for the past three years. The ongoing Composite Dialogue between India 
and Pakistan has significantly reduced tensions and built confidence on 
both sides. Just last week, Prime Minister Singh spoke of the 
desirability of a treaty of peace, security, and friendship between 
India and Pakistan, which Pakistan immediately welcomed.
    To further improve relations and ensure strategic restraint on both 
sides, the United States is prepared to intensify significantly our 
diplomatic effort with both India and Pakistan. Continuing to improve 
our relations with both India and Pakistan will allow us to promote 
peace and counsel restraint in their military procurement plans.
    Fifth, some have argued that the initiative with India will 
undermine our efforts to curb Iran and North Korea's nuclear ambitions, 
because it creates an alleged ``double standard.'' This is simply not 
credible, because comparing India to the North Korean or the Iranian 
regime is not credible. India is a democracy, transparent and 
accountable to its people, which works within the international system 
to promote peace and stability and has a responsible nuclear 
nonproliferation record. The regime in Iran is a state sponsor of 
terrorism, with a long record of cheating on its nuclear obligations to 
the international community, and it is violating its own nuclear 
obligations at present. North Korea is the least transparent government 
in the world, which threatens its neighbors and proliferates dangerous 
weapons. While Iran and North Korea are violating their IAEA 
obligations, India is making new ones and seeking peaceful 
international cooperation. So we do indeed treat India differently from 
the way we, and the international community, treat Iran and North 
Korea.
    France, the United Kingdom, and Russia support our initiative with 
India, and we are all working closely together to curb the dangerous 
nuclear ambitions of the Iranian regime. India is increasingly doing 
its part to support the international community's efforts. Recall that 
India not once, but twice, stood with the United States and other 
nations against illegal proliferation by voting in the IAEA to find 
Iran not in compliance with its obligations and, later, to report 
Iran's nuclear violations to the UN Security Council. Prime Minister 
Singh faced down his anti-American critics at home to take these 
actions.
    It's important to keep in mind that this initiative was not easy 
for Prime Minister Singh, though he has won support for it across 
India's major parties. But it is worth thinking about why this was 
tough for him. It was not because of the concerns mentioned here. The 
opposition in India wants to keep more distance from America. It wants 
to keep India's industry sheltered and protected. Surely those are not 
our goals. Surely Congress will not want to inadvertently miss this 
opportunity to make this strategic leap forward.
                   seizing our opportunity with india
    I want to thank you, Mr. Chairman, for introducing S. 2429, which 
represents President Bush's proposed legislation to facilitate 
authorization of civil nuclear cooperation with India. This legislation 
asks Congress to amend the 1954 Atomic Energy Act. This will let 
American firms provide nuclear goods and services to India's civil 
nuclear program, something that is prohibited by current law. In 
addition, we will ask the Nuclear Suppliers Group to make a special 
exception for India to allow for full civil nuclear cooperation.
    Congressional action on this legislation is critical in our efforts 
to secure broader international support for this new relationship with 
India. Foreign governments are looking to Congress to determine whether 
the United States stands solidly behind a new relationship with India. 
Prompt Congressional action will ensure that there is a solid basis for 
reliable, long-term cooperation with India. It will also assure U.S. 
industry of a solid framework for civil nuclear trade with India, at no 
competitive disadvantage with other nations.
    Mr. Chairman: During his speech in New Delhi last month, President 
Bush spoke of his desire to ``strengthen the bonds of trust between our 
two great nations.'' As we forge this bond, President Bush and I look 
to the Congress as a full partner in this initiative. Your support is 
crucial for this legislation. And we ask that you offer it. Together, 
we can seize this tremendous opportunity to solidify a key partnership 
that will advance American interests, and the ideals of peace, 
prosperity, and liberty for which we stand.
    Thank you, Mr. Chairman, distinguished members of the committee. I 
would now be eager to respond to your questions.

    The Chairman. Thank you very much, Secretary Rice, for your 
statement and for your reaching out to meet objections that 
have been offered publicly and constructively.
    I wanted to recognize, at this moment, the distinguished 
ranking member of our committee, Senator Biden, for his opening 
statement.

               STATEMENT OF HON. JOSEPH R. BIDEN,
                   U.S. SENATOR FROM DELAWARE

    Senator Biden.  Madam Secretary, I apologize. As I came 
down today on the train, unfortunately, someone was struck on 
the tracks. And so, we switched to an automobile and drove, and 
I apologize for being late for such an important hearing.
    The President and you have built on, I think, the good work 
that our former President made, in making a major strategic 
decision to develop a close partnership with India. And I 
believe most Members of the United States Senate embrace that 
effort. But many of us have questions about the wisdom of 
creating an Indian exception to the existing law on nuclear 
exports.
    I sympathize with what the President is trying to do. India 
has maintained its democracy for more than half a century in a 
land of great religious and political diversity. India has 
built a dynamic middle class in the last 15 years, and embraced 
a global economy. And India is a dominant regional power and a 
respected international voice, and it's working to improve 
relations with China, as well as Pakistan. And India soon will 
become, as you know better than I, the most populous country in 
the world.
    I can think of no relationship that's more important to 
develop than the U.S.-Indian relationship. I think it's good 
for both of us. It's not a zero-sum game.
    But India's nuclear weapons raise difficult questions. 
India refused to sign the Nuclear Non-Proliferation Treaty, and 
then built nuclear weapons. And the question we're going to ask 
you about, to state the obvious, is, What impact will India's 
nuclear deal have on the NPT regime?
    The plutonium for India's first weapons came from a 
Canadian reactor, using heavy water from the United States, 
that India had promised to use only for peaceful purposes. The 
question is, Will the current deal lead to a diversion from 
civil to military uses? I would hope, and expect, that may not 
be the case, but I think we're obliged to plumb that.
    There are allegations India has engaged in covert 
procurement of equipment for its nuclear weapons program. If 
so, then is India really prepared to crack down on 
proliferation? I'd like to talk about those reports.
    Isolating India's nuclear program for over 30 years failed 
to make India give up its nuclear weapons, but I take some 
issue with your comment in your opening statement saying our 
nonproliferation policies had been no affect on India's 
development of nuclear weapons. I would argue they succeeded in 
limiting the size and sophistication of India's nuclear weapons 
program and nuclear power programs. And the question is, What 
impact will this deal have on India's nuclear weapons program?
    I had the opportunity to spend some considerable time with 
India's Foreign Secretary, and I asked him that question 
directly. After all these years, it's probably time we admit, 
in my view, that India will keep its nuclear weapons, and to 
help India find a new relationship in the world in nuclear 
matters.
    But the India nuclear deal was made by the administration, 
acting often in understandable haste, as I understand it, I'm 
not sure you yet had a deal when you got to India. And there 
are certain lines that can't be crossed. We must not assist 
India's nuclear weapons program, to state the obvious, not 
because India's an adversary, which it is not, but because 
nuclear nonproliferation is a vital U.S. interest, as well as a 
formal treaty obligation. And we must not undermine the world's 
support for a nuclear nonproliferation regime by saying that 
nuclear weapons are fine for our friends.
    I would point out that Nick Burns came to see us. He made a 
very compelling case on each of these points. But I think we 
should be talking about them in public.
    We must not encourage rogue states--and I know that's not 
your intention, and I stress that India is not a rogue state--
by creating a sense that we only oppose proliferation until it 
succeeds, and then make our peace with the new nuclear power. 
Congress should not give up its power under existing law 
without knowing what the U.S.-India peaceful nuclear 
cooperation agreement and India's safeguards agreement with the 
IAEA will contain, which is something that I do want to talk a 
little bit about, as well.
    I'd like to be clear: the India nuclear deal could go 
forward without changing the law. Peaceful nuclear cooperation 
agreement with India would simply require approval of a joint 
resolution, by a majority of each of the houses. But the 
administration seeks a special exemption from the law to allow 
the agreement to proceed, unless Congress enacts a resolution 
of disapproval, which would require a two-thirds vote in each 
house to override a presidential veto. I realize this is 
procedure, and many of the listeners will get lost in this. But 
the question I'm going to ask you is, Why does the President 
want to change the law? Does he doubt that he could get a 
majority to approve the agreement? And, if so, why?
    I look forward to having an exchange with you, Madam 
Secretary, and, again, apologize to you for being late. I will 
read your statement as the questions are being asked. America 
needs to, and should, pursue close relations with India. It has 
been in the offing for decades. We should build that friendship 
on a firm foundation of mutual interest and trust and 
international support. But we should do it right.
    And one of the things I should tell you now, in conclusion, 
Madam Secretary, that I said to the Indian Foreign Secretary--
although this is not required in a sequence in the deal that 
has been made, to the degree that India moves forward on these 
side agreements that they have, while I'm not suggesting we 
mandate this, but ideally if they could work that out before we 
went to a final vote, it would enhance the sense of confidence, 
I think, here, that, in fact, the deal was as good as you say. 
But I will get into that, as well.
    Again, I thank you, Mr. Chairman, for allowing me to, in a 
sense, go out of order here.
    And I thank you, Madam Secretary, for being here. You've 
had long travels. And we ought to see if we can get you two 
cots on that plane--so you don't have to be on the floor.
    [Laughter.]
    Senator Biden. Thank you.
    The Chairman. Well, thank you very much, Senator Biden.
    We'll have a round of questioning, and we'll have a 10-
minute time for each Senator. And I'll ask each of my 
colleagues to try to be careful in observing that time, because 
we might be joined by other Senators during the course of this 
questioning, and we want to make certain that all are heard and 
their questions are answered.
    Let me just amplify, again, our admiration, as a committee, 
for your committed diplomacy. I think that the travels you have 
undertaken, on specific missions, maybe even involving changes 
in schedule as you proceeded, were tremendously important. The 
dialogue, certainly with the Iraqi leadership, is critically 
important. And, likewise--and I don't mean to demean any of 
your stops--but I noted your own willingness to go with Jack 
Straw into the hustings of Great Britain, an arduous procedure, 
one with which many of us, as campaigners, are acquainted, and 
you are, too. You handled those chores admirably. It was 
important.
    Senator Biden.  Mr. Chairman, a lot of people on my side 
are wondering whether she's getting in practice.
    [Laughter.]
    Senator Biden.  I don't know what to--what the----
    The Chairman. Well, let's----
    Senator Biden.  She'd be a formidable presidential 
candidate, I----
    [Laughter.]
    The Chairman. Let's not go there, this morning.
    Senator Biden.  Okay.
    The Chairman. We'll continue with India and the 
relationship we're forging that is even stronger there.
    [Laughter.]
    The Chairman. Let me just say, at the outset, that we've 
had a moment of conversation about Senate bill 1949, the so-
called Lugar-Obama Arms Control bill. We share, obviously, both 
in the Senate and the administration, some problems with regard 
to budget and money. But we're looking, really, at this point, 
toward the State Department's support for what is essentially 
an authorization of additional activity. And would you affirm 
that the Department supports those efforts and will continue to 
work with us in refining the legislation?
    Secretary Rice.  I do, Mr. Chairman. Thank you very much. 
And we do support----
    The Chairman. I appreciate that.
    Now, I've mentioned, also, in my opening statement, another 
piece of legislation, Senate bill 2545. This originates because 
of our mutual discussion of the problems of energy in this 
world, and suggests, among other things, that the State 
Department, as a major focus, will want to take a look at the 
diplomatic possibilities in the energy field dealing with 
India, with China, with Brazil, with a number of countries. As 
I mentioned to you in our conversation, Under Secretary 
Zoellick, knowing my interest in this and the comments that 
I've made, had affirmed that this is an interest of his and of 
the Department. At the same time, you had not had a chance, 
during your travels, to undertake study of this specific 
legislation, but I would encourage you and the Under Secretary, 
and those that you might delegate, to lift this, as you have 
been doing in reorganizing the Department, maybe to a proper 
focus, as you can.
    Secretary Rice.  Absolutely. Thank you very much. We will 
do that, yes.
    The Chairman. Now, let me just say, for the record, that I 
want to put two pieces in the record--one, a letter from our 
former colleague, Senator Bill Cohen of Maine, who has written 
to me, understanding we were going to have this important 
hearing today.
    Essentially, Secretary Cohen mentions that he believes that 
this particular bill we're discussing today will enhance the 
nonproliferation regime in a major way. I ask that we'll put 
that letter into the record, because that's an important 
affirmation.

    [The information previously referred to appears in the 
appendix to this hearing.]

    The Chairman. Likewise, and this is not necessarily an 
affirmation, but I think seven salient questions have been 
raised by a memo given to me by the Center for Nonproliferation 
Studies in Monterey. This is a group with which you're well 
acquainted, and I am, too, as a member of their advisory 
committee, with Dr. Bill Potter and my former colleague Sam 
Nunn. They have raised, it seems to me, not in a benign 
fashion, but, nevertheless, in an objective fashion, seven 
considerations
    I'm going to put those in the record and ask, at your 
disposal, to try to respond to those specific questions, which 
I think are emblematic of the nonproliferation community.

    [The information previously referred to appears in the 
appendix to this hearing.]

    The Chairman. For my own part, let me just say that I 
believe that the undertaking, as I said in the opening 
statement, of a new relationship with India is a cardinal 
point. That, all by itself, has to be considered. It has not 
been a good relationship, on some occasions, or at least only 
mildly satisfying, for reasons that we all understand. After 9/
11 of 2001, Secretary Powell called some of the members that 
are here today to S-407 and said, ``As a point of national 
policy, you, ladies and gentlemen, must lift all the sanctions 
that we have imposed, political and economic, with regard to 
India and Pakistan, both--and now.'' And some members said, 
``Forever?'' And he said, ``Forever. It is a new world.''
    Now, this was a tall order, for many, who had been watching 
the India nuclear tests, and those followed quickly by 
Pakistan. Some members around this table will recall meetings 
around the Cabinet table with President Clinton, as we all 
thought, together, ``What can we say to Pakistan that might 
forestall that?'' And even as we were talking, word came that 
it was too late. So, that occurred. And it led to a number of 
sanctions being imposed, which many of us voted for and 
supported. Now, suddenly all these were removed, because we 
had, in fact, a new world and a new set of strategic 
relationships, vis-a-vis Afghanistan and our allies that we 
were working with.
    Now, from that rather difficult start, much has happened. 
And I compliment you and the President for your initiatives. I 
suspect the dilemma for all of us will be to weigh this factor: 
How important is the relationship with India? How important is 
India? And, therefore, we're all in an educational experience, 
understanding how big India is, how extraordinary the growth 
is, what the promise may be, what our relationships may be. But 
this is a big experience for each one of us, trying to discover 
India and the importance. I think you understand that, and your 
advocacy hopefully will continue to help us.
    Now, one way in which India is very important, leaving 
aside all of the commercial transactions often mentioned--and 
they are substantial--is in the field of energy. I suppose 
that's the second point that I tried to make in my opening 
statement. I'm not the only person in the Congress who has been 
involved in nonproliferation work, and deeply concerned about 
this. With my former colleague, Senator Nunn, we have explored 
the hinterlands of Belarus, Ukraine, Kazakhstan, quite apart 
from most of the stretches of Russia, even up into the 
mountains in Albania recently, and so forth. So, at least I'm a 
reasonable competitor for anybody who is interested in 
nonproliferation, finding it and trying to get rid of it.
    This is why I have referenced Bill Potter's group, for 
example, a responsible group, trying to think through, Where 
are we with the NPT, with India and the assurances that we 
believe it has given?
    Now, having said that, I've become equally enthusiastic 
about what we must be doing in the world with regard to energy 
resources. I believe this is the source, presently, of 
potential conflict as great as the nonproliferation danger. 
This may not seen by all. But I've advocated that, 
inadvertently, perhaps, Russia, by shutting off the gas to 
Ukraine, has indicated to the world that countries can be 
hobbled by turning off the gas--without nuclear weapons, 
without anybody coming across the lines with tanks or guns or 
so forth. Now, this is the new security strategic weapon, and 
it is powerful.
    As I visited in Libya this summer, I saw, in the Corinthia 
Hotel, a hotel relatively filled with Chinese and Indians, and 
they all had one objective, to pin down the last acre in Libya. 
We may not be that avid, but they are. And throughout Africa, I 
saw this. This is not news to you. But the fact is that the 
search, for a dynamic economy like India, which is talking 
about doubling its energy needs, for a billion people or more 
in just a very short period of time, less than a generation--
and that may understate it--means that there are going to have 
to be alternative supplies.
    Now, one may say, well, there's surely easier ways of 
finding energy for India than getting into nuclear power. Well, 
I'm not certain I see them. It appears to me that, leaving 
aside the strategic problems of proliferation, the problems of 
energy are extraordinarily important here.
    I would comment that, just nearby, while we've been 
discussing this, Russia and China have been talking about oil 
and gas lines from Russia to China. There has been further talk 
about lines from Russia to Japan, even Russia to Korea, but all 
with the same characteristics of Russia to Ukraine, for 
example, or Russia to Germany.
    We're going to have to think about these things. And I 
don't demean, for a moment, my friends in the nonproliferation 
community, who are busy still working through the fine points 
of that. But this is a world of a dynamic India, and dynamic 
energy needs for India, for us, in the United States, for 
Russia, for everybody. So, those two areas are important as I 
take a look at it.
    You have to judge this, and you have, and the President's 
visited there--but the question is, Is there a sense of mutual 
trust that we are both on the path of nonproliferation? We 
trust, as a matter of fact, that even if India has to have, in 
their judgment, a nuclear deterrent, vis-a-vis Pakistan, China, 
Russia, whoever else in the world, that we all understand that 
the course of history is not going to be kind to us if we are 
involved in an arms race. And the Indians, in their offering of 
assurances to us, begin to offer assurances to the rest of the 
world.
    I will cease fire at this point, having exhausted my 10 
minutes, but I just simply wanted to take this opportunity to 
express what I think are important arguments, or, for that 
matter, affirmations. And I suspect you would agree with most 
of that. So, I will not ask for a simple yes or no, but if you 
have a short comment, I would like it.
    Secretary Rice.  Well, thank you very much, Senator Lugar. 
Let me just underscore a couple of things that you have 
mentioned.
    First of all, we do have a growing strategic relationship 
with India, and I think it is one that is increasingly based on 
trust and mutual interest, and common values. It's a trifecta, 
if you will. And I think that that's an important foundation 
for the relationship to move forward.
    We do have to do something about the energy problem. I can 
tell you that nothing has really taken me aback more, as 
Secretary of State, than the way that the politics of energy 
is--I will use the word ``warping'' diplomacy around the world. 
It has given extraordinary power to some states that are using 
that power in not very good ways for the international system, 
states that would otherwise have very little power.
    It is sending some states that are growing very rapidly in 
an all-out search for energy, states like China, states like 
India, that is really sending them into parts of the world 
where they've not been seen before, and challenging, in--I 
think, for our diplomacy.
    It is, of course, an energy supply that is still heavily 
dependent on hydrocarbons, which makes more difficult our 
desire to have growth, environmental protection, and reliable 
energy supply, all in a package.
    We've tried, in our diplomacy, to be attentive to that. For 
instance, we have a new Asia-Pacific Partnership on Energy and 
Climate, of which India is a member. We are looking to 
technological solutions for the energy appetite of growing 
countries. And, of course, being able to cooperate with India 
on civil nuclear cooperation would help us to pursue that goal.
    And, finally, I'll just note that we also are looking very 
hard for good partners in the nonproliferation work. I, myself, 
Senator, come from the arms-control community. You know that. I 
know the people of the nonproliferation community very well. I 
consider myself part of the nonproliferation-concerned 
community. So, you have to recognize that the NPT is the 
cornerstone, but one part of a maturing nonproliferation 
framework in which we are also working to have rules of the 
game that the Nuclear Suppliers Group has on certain standards 
of behavior--India is agreeing to adhere to those unilaterally-
- to the missile control technology regime, which India is 
agreeing to adhere to unilaterally, efforts to get states to 
give up enrichment and reprocessing for assured fuel supplies, 
something that we are working with the IAEA on, and--and I 
might just notice--note here, making certain that those who 
signed the NPT and then violate it and disregard it are really 
the ones who come under punishment from the international 
system. And there, I have to say, there's a very big difference 
between the behavior of Iran and North Korea, who callously 
signed the NPT and then have not been in compliance with it. 
India never signed the NPT, but we are asking India to adhere 
to many of the important elements of the guidelines that are 
making up the nonproliferation regime.
    And so, I have--I think we have to think about the energy 
and nonproliferation as two halves of this same walnut. But I 
would be very much in agreement with you that, on the energy 
side, we have simply got to do something about the warping, 
now, of diplomatic effort by the all-out rush for energy 
supply.
    The Chairman. Thank you very much.
    Senator Biden?
    Senator Biden.  Madam Secretary, to those of us who have 
spent our careers, as at least the three of us have--we're the 
oldtimers here--not referring to you--on matters relating to 
nonproliferation and arms control, this is a big deal. No pun 
intended. This is a big deal. And I think if we cut through it 
all, it comes down to a simple bet we're making. It's a bet 
that India appreciates, as much as we do, that our two nations 
have the potential to be the anchors for stability and security 
in the world going into the 21st century. Not alone, but two of 
the anchors. And I tried to communicate to the Foreign 
Secretary how fundamental an impact India's reaction to this 
deal would be--how much is based upon our trusting them not to 
be seeking this deal for purpose of advancing their nuclear 
weapons capability.
    I'd respectfully suggest, if this goes through and we are 
wrong about their intentions, that they will have mortgaged the 
21st century, literally, in a way that few nations will be held 
accountable for having done. They will have squandered--I don't 
anticipate this, but they will have squandered what I think to 
be an opportunity to begin to build a new century. I literally 
think it's that fundamental. And it relates to trust, as 
implied, or stated, by my chairman.
    We are faced with a dilemma all the time here, to state the 
obvious, but for the record, that sometimes administrations--
and I've had the pleasure of serving with seven Presidents--
administrations and Presidents bring agreements to us that we 
would have done differently, we think, that we would not have 
moved forward with in the same way. And we're faced with a 
dilemma. The dilemma is, although the deal we're presented 
with, and required under the Constitution to ratify or reject, 
may not be one that we like, the downside of failing to ratify 
it, because of the circumstances created by the negotiation, 
sometimes is greater than any downside might come from the 
mistakes that the agreement may embody.
    And so, I just want to state, at the outset here, that I am 
probably going to support this. I'm going to ask you some very 
specific questions, in this round and next, mainly for the 
record, but I want you to know that I believe and appreciate 
that this is much bigger than the sum of the questions I'm 
going to ask you. And it really does--and I hope our Indian 
friends are listening--it requires not a leap, but a jump of 
faith here. This is a step of faith that they, in fact, are 
going to adhere to many of the things they heretofore have said 
they would not sign onto, that they're voluntarily going to do 
it. And the bottom line is, at the end of the day, they are not 
going, 5 years or 10 years from now, to have increased their 
nuclear capacity and sophistication in a significant way that 
begins to unravel the prospects of peace and security in the 
21st century.
    So, let me ask a couple of questions, if I may.
    I am concerned, because members of the Nuclear Suppliers 
Group have contacted me, I've met with some of them--and 
they're concerned. They are not opposed, but they are very 
concerned. The NPT obliges us not, in any way, to assist, 
encourage, or induce any non-nuclear-weapons states to 
manufacture or otherwise acquire nuclear weapons or other 
nuclear explosive devices, yet there is a uranium shortage in 
India now. This agreement would open up the ability, for the 
first time, for the world's suppliers of uranium to be 
available for the civilian nuclear reactors India plans on 
building. But based on the information I've been given, it will 
ease India's uranium crunch--they have one now--and thereby 
enable India to take that uranium, rather than, the argument 
goes, having to choose between using the limited amounts they 
have for their civil nuclear reactors or for their weapons 
program.
    W hat's your response to the international community in 
saying that this doesn't, at least indirectly, assist or 
provide the avenue for India to be able to further enhance its 
nuclear weapons capability?
    Secretary Rice.  Well, thank you very much, Senator Biden. 
And thank you also for the context in which you put this, 
because we do believe that this is a very big deal. And we have 
also said to the Indian Government that this is more about its 
relationship not just with us, but with the international 
system. And that's something to be valued and safeguarded. And 
in a great democracy like India, I'm sure there are going to be 
plenty of people watching to see how this is carried out.
    On the question of the Indian nuclear weapons program, 
first of all, the Indian program, we believe, just in terms of 
what India's incentives or disincentives are to grow its 
nuclear weapons program, its strategic program, are more 
related to the conditions in the region, the political/military 
conditions in the region, than to any quantity of available 
nuclear material. And the program for India has been restrained 
over the number of years. I think most people would argue that 
it's a relatively restrained, kind of, minimum-deterrent 
program. Their words, not mine.
    Secondly, the region is one in which the political 
situation has improved and, we hope, is going to continue to 
improve. There's no doubt that when, I'm sure, Colin Powell was 
briefing all of you about the near nuclear--near war experience 
in 2001, and then later in 2002, none of us would have foreseen 
where we are now with a comprehensive dialogue between Pakistan 
and India, talks of a peace treaty, even discussions about the 
future of Kashmir. And so, we believe that by strengthening our 
relationships with these countries, we can actually contribute 
to that environment. And that's the real guarantor of trying to 
stop an arms race.
    But, third, I think it's the assessment that we have that 
India has some 50,000, give or take, tons of uranium available 
to it in its reserves, and it would need a very small 
percentage of that on the military nuclear side. And, in fact, 
we do not believe that the absence of uranium is really the 
constraint on the nuclear weapons program. On the other hand, 
on the civil side, the amount of fuel that one would need to 
run a civil program for years and years and years is far in 
excess of what India can mine indigenously. So, we think the 
incentives, or the crunch, if you will, is really on the civil 
side. And it, therefore, gives India incentives to safeguard 
future reactors. It gives India incentives to safeguard fuel 
supply, and to get that fuel supply under a nonproliferation--
international nonproliferation regime.
    Senator Biden.  If I could interrupt you, because you've 
answered the question, I'd like to go to one last question, in 
the 2 minutes or so I have left.
    Secretary Burns, for whom I have an inordinately high 
regard, told the U.S. Chamber of Commerce, that, quote, ``India 
has decided to adhere to the Australia Group, the Wassenaar 
Agreement''--and let me make sure I quote this exactly--``The 
Australia Group established joint controls over CW and BW 
materials, equipment, and technology. The Wassenaar Agreement 
works to limit the sales of advanced conventional weapons. 
Adhering to these groups would be an important positive step. 
In the past, India has refused to bar chemical weapons exports 
unless the terms were listed in the Chemical Weapons 
Convention.''
    Now, here's my question. The Under Secretary has stated 
that. Has India officially announced that it will adhere to the 
Australia Group? Have you gotten a guarantee?
    Secretary Rice.  India has told us that it wishes to adhere 
to the Wassenaar Group, also to the MTCR guidelines, to the NSG 
guidelines. We are still discussing with India its potential 
participation in the Proliferation Security Initiative. And so, 
yes, they have told us that they wish to adhere.
    Senator Biden.  Well, my time is up, 35 seconds up. I would 
send a message, if anybody in India is listening, that to the 
degree to which that can be solidified and made as an 
assertion, in terms of Indian policy, it would enhance the 
prospects of smoother sailing for this agreement here in this 
body now.
    But I thank the Secretary.
    Secretary Rice.  Thank you, Senator.
    The Chairman. Thank you very much, Senator Biden.
    Senator Chafee?
    Senator Chafee.  Thank you very much, Mr. Chairman, and 
good to join you. Madam Secretary.
    In your opening statement, you said that--and throughout 
your comments, you mentioned, frequently, the reliance on 
Iranian energy. And you said they effectively force India to 
rely on oil and gas from Iran. What confidence do we have that 
if this amendment of the 1954 Atomic Energy Act occurs, that 
that reliance on Iranian energy won't go forward anyway, that a 
pipeline won't be built anyway?
    Secretary Rice.  Thank you, Senator.
    Well, I can't be assured that it will not. But let me just 
note that India is, of course, not the only country with a oil 
and gas relationship with Iran. Some of our closest allies--
Japan has an oil and gas relationship with Iran. The 
Europeans--Italy is Iran's largest trading partner. So, most 
countries have a different relationship with Iran than we do. 
But what we are saying to everyone--and I think it is now 
getting--gaining resonance--is that Iran is not really a 
reliable, in the long run, supplier, because of the behavior of 
Iran in--concerning the entire international community about 
what its intentions are toward a nuclear program. The 
unreliability of that Iranian oil and gas supply has got to be 
taken into account. The nature of Iranian policies have got to 
be taken into account.
    And the one point that I would make is that I think you 
will see everybody taking a harder and harder look at their 
relationships and reliances on some of these states that from 
time to time talk about using oil and gas as a weapon when they 
are confronted with policies that they do not like. And so, 
while I can't tell you that if India has access to civil 
nuclear they are going to forgo other relationships, it does 
give them, in many ways, a better option for a more reliable 
energy supply than being dependent on states that from time to 
time brandish the oil and gas weapon when they don't like the 
behavior of other states.
    Senator Chafee.  Would you--since this--you had talked 
about the lack of reliability of Iranian energy. Was this our 
initiative or an Indian initiative?
    Secretary Rice.  I'm sorry, the----
    Senator Chafee.  This proposed amendments to the 1954 
Atomic Energy Act.
    Secretary Rice.  This----
    Senator Chafee.  Because it seems as though it's our 
initiative. If they are concerned about the reliance and the 
sustainability of Iranian energy, that it would be their 
initiative. But that doesn't seem to be the case.
    Secretary Rice.  Well, the initiative to amend the law is 
simply because we need to change American law, so it comes from 
the American administration. But the civil nuclear----
    Senator Chafee.  Who approached whom on this?
    Secretary Rice.  On the civil nuclear cooperation?
    Senator Chafee.  Yes.
    Secretary Rice.  Oh. Well, this goes back to our 
discussions with India, going all back--almost back to the 
beginning of the administration, where they began to talk about 
their energy needs, about their desire to be able to engage in 
civil nuclear cooperation. At the time, we were not ready to 
discuss that, and we had next steps in the strategic 
partnership that allowed us to talk about some other aspects of 
energy. But the Indians raised, some time ago, their desire to 
begin to diversify their energy, because right now they are 
very heavily dependent either on oil and gas or on coal, which, 
for the environment, of course, is a real problem.
    Senator Chafee.  My question has to do with in whose best 
interest is this? It seems as though we want to break the 
association between India and Iran and their oil, that the 
driving force behind----
    Secretary Rice.  Oh----
    Senator Chafee [continuing]. These amendments to the 1954 
Atomic Energy Act.
    Secretary Rice.  Senator, it's not the driving force. The 
driving force is the strategic partnership with India and 
having a full-scale partnership with India that can fully deal 
with technological cooperation, energy cooperation, economic 
cooperation, all of which, we believe, are hindered by the 
absence of our ability to do civil nuclear cooperation.
    I only make the Iran point as one, among many, that 
reliable energy supply is a problem for countries like India 
that are growing at 8 percent, that need energy supply, and 
they're looking for it anywhere that they can. And, from our 
point of view, for states first to be less reliant on 
hydrocarbons, including ourselves, is a good thing, because of 
environment and energy supply, but it is also a good thing, 
because many of these hydrocarbon sources, these oil and gas 
sources, are in states that I think we would consider to have 
problematic foreign policies.
    Senator Chafee.  From us, in the Congress, it seems to me 
we're abdicating a lot of power in these amendments. And if 
they're--if that relationship between India and Iran is going 
to continue anyway--there's no guarantee the pipeline won't be 
built--we've abdicated power to--what? A game.
    Secretary Rice.  Well, Senator, I don't--I don't think 
you're--
    Senator Chafee.  Most of these amendments give more power 
to the President and take away congressional oversight.
    Secretary Rice.  Well, the amendment to the Atomic Energy 
Act, we believe, is necessary so that we can have a reliable 
and predictable nuclear commercial trade with India. The 
Congress, of course, can--the Congress has, up front--and 
that's why we're coming to you now--the ability to assess the 
deal, to look at its upsides and downsides, and then to affirm, 
in a vote, yes or no, to amend the legislation that you wish to 
do so. We will also submit the bilateral nuclear cooperation 
agreement that we would make with India in support of this 
civil nuclear cooperation, so-called 123 Agreement, would come 
to the Congress even before the legislation. We have offered to 
brief the Congress on where we are in the negotiation of this 
bilateral deal, which is a technical deal to try and implement 
this civil nuclear cooperation agreement.
    So, we believe that there is a lot of congressional 
oversight. We've tried to come up and do briefings. But we are 
making a rather fundamental choice, as a country. And that's 
why we thought that it was important to make the choice up 
front, in terms of amending the legislation.
    Senator Chafee.  And you mentioned in your statement that 
Great Britain, France, and Russia have expressed support for 
this agreement. And you said there's letters from Tony Blair 
and Jacques Chirac. How about the Russians? Is there any----
    Secretary Rice.  There were----
    Senator Chafee [continuing]. Copies of support?
    Secretary Rice.  Well, there was--there were actually 
public statements.
    Senator Chafee.  In follow-up, also how about China, also?
    Secretary Rice.  Yes. There were actually----
    Senator Chafee.  Where are they----
    Secretary Rice [continuing]. Public statements----
    Senator Chafee [continuing]. On this?
    Secretary Rice.  Oh, certainly, Senator. There were public 
statements from President Chirac and Prime Minister Blair. The 
Russians have told us that they support.
    The Chinese have said that they have some questions. I 
would note that, of course, there is a history of Chinese/
Indian relations to take into account here, not just China's 
relationship to the Nuclear Suppliers Group. It is, of course, 
the case that we engage in the--in civil nuclear cooperation 
with China, despite our many differences with China, but we are 
not currently able to engage in civil nuclear cooperation with 
India, despite our considerable interests in common. And so, 
that is perhaps one of the explanations for China's concerns. 
They have not said that they will not support it. They have 
said that they have some concerns.
    I've also talked, Senator, for instance, with the 
Australians, who--Prime Minister Howard has said that he 
supports the deal, believes it's a--on balance, a good deal. 
And I would just point, again, to Mohamed ElBaradei, who is the 
guardian of the nonproliferation regime and the Non-
Proliferation Treaty, who's been a strong supporter of it.
    Senator Chafee.  And how hard did you try to negotiate a 
deal that could possibly keep the 1954 Atomic Energy Act 
intact, that would--you don't have to amend it? Was there an 
effort to negotiate some kind of deal to accomplish that?
    Secretary Rice.  Well, Senator, the nuclear trade and 
commerce with India, because India is a--not a member of the 
NPT, we would have had to do something with the legislation. 
Now, it's true, as Senator Biden was saying, we could have 
relied on a year-to-year licensing, which we think would simply 
disrupt the predictability that is needed for, for instance, 
companies that wish to deal in the nuclear trade with India. 
But our goal here was to negotiate an agreement that kept us 
firmly in compliance with our Nuclear Supplier Group 
obligations, that kept us firmly in compliance with our IAEA 
obligations, that did not run afoul of our obligations to the--
as members of the Non-Proliferation Treaty. And we were 
particularly concerned about the permanence of these 
safeguards. I can tell you that the Indians wanted to negotiate 
safeguards, for instance, that were not necessarily permanent. 
That was a red line for us.
    So, the negotiation of the deal was in regards to being 
able to firmly be able to say to you, ``We are maintaining our 
obligations under all of these very important arrangements that 
we have and treaties that we have, but there will need to be 
some change made to existing laws and regulations in order for 
us to be able to engage in nuclear commerce with India.''
    Senator Chafee.  Thank you.
    Secretary Rice.  Thank you.
    Senator Chafee.  The buzzer has sounded.
    The Chairman. Thank you very much, Senator Chafee.
    Senator Sarbanes?
    Senator Sarbanes.  Thank you. Thank you very much, Mr. 
Chairman.
    Madam Secretary, I join my colleagues in welcoming you back 
before the committee.
    I want to try to understand more clearly some aspects of 
this understanding you've reached. As I understand it, there 
will be a safeguards regime arrived at with the IAEA, is that 
correct----
    Secretary Rice.  Yes.
    Senator Sarbanes [continuing]. For civilian nuclear 
facilities?
    Secretary Rice.  That's correct, Senator.
    Senator Sarbanes.  Now, that's an important dimension, I 
take it, of this agreement, is that correct?
    Secretary Rice.  That's correct, Senator.
    Senator Sarbanes.  Are we in a position to examine those 
safeguards and see what's been agreed to?
    Secretary Rice.  Well, at this point----
    Senator Sarbanes.  This is going to be an India-unique set 
of safeguards, is that correct?
    Secretary Rice.  There will be, but it--it will be India-
unique, in the sense that the Indian case is unique. I might 
just note that the negotiations we--will begin shortly with the 
IAEA. There are three kinds of safeguards available. They're 
voluntary safeguards. We've made very clear that we do not--
would not favor, in our role in the NSG, voluntary safeguards, 
because we believe they need to be permanent. Secondly, there 
are safeguards that are full-scope safeguards. But because 
India will maintain a strategic program, that is not a civilian 
program, full-scope safeguards would not apply. And then there 
is a--this third category, which the Indians and the IAEA will 
have to negotiate. But I would expect that there--one of the, 
kind of, indicators of what they might look like is, there are 
actually four civilian reactors that are currently under IAEA 
safeguards. We might look to those. But we fully expect these 
negotiations to take place. And since we are members of the 
Board of Governors of the IAEA, we would have to approve them 
in that framework, as well.
    Senator Sarbanes.  But you're not in a position today to 
spell out for us what the safeguard regime will be, is that 
correct?
    Secretary Rice.  That's correct, Senator. We do have to 
have the safeguards, though. We have to have an agreement on 
the safeguards--or the Indians and the IAEA have to have an 
agreement--before this legislation would actually go into 
effect.
    Senator Sarbanes.  What about before it was passed?
    Secretary Rice.  We believe that the----
    Senator Sarbanes.  You want us to pass it, not knowing what 
the safeguards are?
    Secretary Rice.  Well, Senator, we would like to have the 
legislation passed. We think that the timing----
    Senator Sarbanes.  Well, I----
    Secretary Rice [continuing]. The sequence----
    Senator Sarbanes [continuing]. Understand that, but we're 
trying to get a full picture here, and do a proper evaluation.
    Secretary Rice.  We do think that the safeguards 
negotiation could take some time. Those safeguards will be 
clear to everyone at the time that they're undertaken. And, 
again, nothing in this legislation can take effect until the 
President determines that there is an acceptable agreement with 
the IAEA.
    Senator Sarbanes.  Well, I understand that, but that's the 
President's determination, not a congressional determination, 
as to the adequacy of the safeguards, is that correct?
    Secretary Rice.  Well, Senator, it is a presidential 
determination as to the safeguards. But, again, the safeguards 
will have to pass not just IAEA muster of the technical 
negotiations, but also the IAEA Board of Governors. We think 
there are plenty of----
    Senator Sarbanes.  You're prepared to substitute----
    Secretary Rice [continuing]. Safeguards on the safeguards.
    Senator Sarbanes.  You're prepared to substitute the IAEA 
Board of Governors for the Congress, is that correct?
    Secretary Rice.  We believe, Senator, you will have a 
very--we will keep you apprised of the safeguards as they are 
being negotiated. But we think it could take some time. And we 
believe that the proper sequence is to go ahead and pass the 
legislation, to negotiate the bilateral agreement, which will 
be submitted to the Congress, and will then give you a very 
strong sense of what is being done, in terms of the nuclear 
cooperation, and then to have the IAEA safeguards fully 
negotiated before this could go into effect.
    Senator Sarbanes.  I would like to try to understand why 
you didn't proceed down the path of using the waiver authority 
which the President has under the existing Atomic Energy Act, 
and why you are seeking legislation. As I understand the Atomic 
Energy Act, the President has a waiver authority, which would 
enable him to move ahead on this proposal.
    Secretary Rice.  Well, our understanding, Senator, is that 
in order to engage in the nuclear commerce--that is, the trade 
and the transactions--there would have to be congressional 
action if we didn't amend the law. There would actually have to 
be congressional action each time a transaction was going to 
occur. And we think that would actually undermine the stability 
or the regularity that is needed in developing trade, nuclear 
trade.
    Senator Sarbanes.  You mean congressional action to approve 
the waiver?
    Secretary Rice.  To approve each transaction.
    Senator Sarbanes.  The waiver that would go with each 
transaction----
    Secretary Rice.  With each transaction.
    Senator Sarbanes.  Now, under your proposed legislation, is 
congressional action part of the arrangement?
    Secretary Rice.  It is, Senator, because we have to submit 
to the Congress, after it is negotiated, a so-called 123 
Agreement, which is an agreement that is a bilateral agreement 
between the United States and India on civil nuclear 
cooperation that comes to the Congress for assent. As I 
understand it, it's 90 continuous days that the Congress can 
object, in joint session. But it is--there will be a submission 
of that document to the Congress. In addition, we are--we want 
to continue to brief the Congress as this goes forward, so that 
you are fully apprised of what we are doing in the bilateral 
agreement. But the bilateral agreement does have to come to 
Congress. And it would come in conformance with the way that 
this has been done with others, because of the amendment to the 
law.
    Senator Sarbanes.  Well, I want to pursue that for a 
moment. The congressional power, then, would be to disapprove 
the bilateral agreement?
    Secretary Rice.  The congressional power would be to either 
assent or, by two-thirds--is that correct?--or by two-thirds, 
to disapprove within the 90 days, although the 90 days has to 
be in continuous session, so that's probably not 90 days----
    Senator Sarbanes.  I don't----
    Secretary Rice [continuing]. But much longer.
    Senator Sarbanes [continuing]. Understand this two-thirds 
disapproval requirement.
    Secretary Rice.  Senator, the----
    Senator Sarbanes.  I think you're going to get some----
    Secretary Rice.  Yeah, let me----
    Senator Sarbanes [continuing]. Help on this issue.
    Secretary Rice [continuing]. Let me just read it here. Yes. 
Right. So, effectively, it's a two-thirds--yes, they're just 
going to refine it for me. The--there would have to be a 
disapproval. And then, of course, the President could override. 
So, that's----
    Senator Sarbanes.  So, what you've done, or what you're 
proposing to do, is to shift from the Atomic Energy Act, in 
which the President could give a waiver to move ahead, but that 
would require approval by the Congress, to a situation in which 
the Congress would have to disapprove, in which case the 
President could veto the disapproval, thereby requiring a two-
thirds vote in both houses of the Congress. Is that correct?
    Secretary Rice.  Well, Senator, the first approval, of 
course, has to be to amend the act. And so----
    Senator Sarbanes.  Well, I understand that. But I'm looking 
at the consequences of amending the Act.
    Secretary Rice.  Well, we thought that the--we think that 
the proper sequence is that, first of all, up front, Congress 
has the decision before it to approve the amendment to the Act, 
or not. At that point, once the Act is either amended or not, 
we would submit the 123 Agreement to Congress. If we do not 
amend the Act, then every transaction has to come for 
congressional approval. And we think that that will disrupt the 
very basis and the very--the very need here, on an annual 
basis, of the trade that is actually needed.
    Senator Sarbanes.  I thought the waiver and its approval 
was on a----
    Secretary Rice.  An annual basis.
    Senator Sarbanes [continuing]. On an annual basis----
    Secretary Rice.  Right.
    Senator Sarbanes [continuing]. Not every transaction.
    Secretary Rice.  No, an annual basis. The list of 
transactions----
    Senator Sarbanes.  You just said every----
    Secretary Rice [continuing]. On an annual----
    Senator Sarbanes [continuing]. Transaction.
    Secretary Rice.  Well, let me rephrase. An annual--on an 
annual basis, the list of transactions.
    Now, the problem with that, Senator, is that what we're 
trying to do is to free up the capacity of India and the United 
States to cooperate in civil nuclear cooperation. Almost all of 
that is in the private sector, not in the government sector. 
And the very unreliability and unpredictability of an annual 
process of the approval of all transactions, we think, would be 
a pall over the ability of the commercial entities to actually 
engage. That's not how commercial entities plan. It's not how 
commercial entities work.
    Senator Sarbanes.  So, your solution to that problem is to 
move Congress out of the decisionmaking process.
    Secretary Rice.  No, Senator----
    Senator Sarbanes.  I mean, except for the one decision 
right at the outset.
    Secretary Rice.  Well, the decision at the outset really is 
the critical decision, because, at the outset, I think, what 
we're deciding, as a country, is, Do we believe that the 
benefits of having civil nuclear cooperation and civil nuclear 
trade with India outweigh the downsides?
    Senator Sarbanes. I'm sympathetic to that point of view. 
And it's one of the things I'm trying to wrestle with here. But 
you just told me, a moment ago, that you're backing the 
Congress out of this process. As----
    Secretary Rice.  Senator----
    Senator Sarbanes [continuing]. I understand it, for 
example, you want the agreement approved before we know what 
the safeguard arrangements are.
    Secretary Rice.  Senator----
    Senator Sarbanes.  And your answer to that is, ``Well, the 
President will know what the safeguards arrangements are, 
because it can't go into place until he makes the determination 
that the safeguard regime is adequate.'' But shouldn't there be 
a congressional determination that the safeguard regime is 
adequate?
    Secretary Rice.  Senator, the IAEA safeguards that are 
negotiated with the--between India and the IAEA----
    Senator Sarbanes.  Has to be approved by the Board of 
Directors of the IAEA----
    Secretary Rice.  Well----
    Senator Sarbanes [continuing]. Correct?
    Secretary Rice.  That's right. But----
    Senator Sarbanes. Well----
    Secretary Rice [continuing]. Of course, that's----
    Senator Sarbanes. I don't know that they should be 
substituted for the Congress.
    Secretary Rice.  But, of course, Senator, in any agreement 
that we engage in civil nuclear cooperation or bilateral 
cooperation, the process is the same. The safeguards are IAEA's 
safeguards. The 123 Agreement is by assent, not by a vote. And 
so, the difference here is that we are asking Congress, up 
front, to treat India as we treat other partners in civil 
nuclear cooperation. So, the decision is, Are we going to treat 
India as we treat other partners in civil nuclear cooperation? 
At the point that that determination----
    Senator Sarbanes.  This----
    Secretary Rice [continuing]. Is made, we would treat----
    Senator Sarbanes.  This is----
    Secretary Rice [continuing]. India----
    Senator Sarbanes.  This is further complicated, because 
other partners, as I understand it now, have undertaken not to 
produce fissile materials. Is that correct?
    Secretary Rice.  Other partners are, of course, nuclear--
non-nuclear-weapons states, at this point.
    Senator Sarbanes. Right.
    Secretary Rice.  But, Senator----
    Senator Sarbanes.  And the nuclear-weapons states have 
undertaken not to produce additional fissile material?
    Secretary Rice.  No, Senator. As a matter of fact, there is 
a--an international effort underway for a Fissile Material 
Cutoff Treaty, which the United States supports. But we have a 
moratorium, that's right, on fissile-material production, and 
we've encouraged others to do that.
    But the fact is that we are not asking--once the law is 
amended, we are not asking for special treatment for--or for a 
different role for Congress once the change in the law is 
taking place. Once you change the law, then we are asking for 
the same process that we would use with any bilateral agreement 
to do civil nuclear cooperation. The decision, up front, is 
whether or not to treat India as a so-called ``conforming 
state''--in other words, whether to treat India as we treat 
others in civil nuclear cooperation. And we thought that this 
was the right discussion to have, as a country, up front, 
whether or not we wish to pursue this arrangement.
    Senator Sarbanes.  Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Sarbanes.
    Senator Allen?
    Senator Allen.  Thank you, Mr. Chairman.
    Thank you, Madam Secretary, for being with us. The ranking 
member, earlier on characterized this as whether or not this 
would be a ``good bet'' for us to secure this protocol with 
India. And when one is thinking of betting, I look at this as a 
good bet. Two things you look at when you're betting. Number 
one is past performance. You always like to look at a track 
record. If it's a horse, obviously its starts and finishes, 
times, track conditions, and so forth. And then you also want 
to look at, What's the benefit, what's the payoff in it? And I 
think when you look at India's past performance, and you look 
at the benefits to India and to the United States, and, indeed, 
the--Asia and the world, I think this is a very good bet for 
our country.
    One, as a partnership with a country that is the world's 
largest representative democracy with us, who is the oldest 
representative democracy. There's a shared desire for peace in 
Asia. There's a shared sense of the importance of religious 
tolerance, individual rights. I think it makes sense for our 
security, as well.
    The energy demand, which has been brought up back and forth 
here, I think is very important. I was in India last November. 
The air quality there is just awful. It made me appreciate our 
clean air here in the----
    Senator Boxer.  Come to Los Angeles.
    Senator Allen.  Fine. I've been there. My mother lives 
there. India is worse than Los Angeles.
    Senator Boxer.  I would hope so.
    Senator Allen.  The people in India have dirty coal, high-
sulphur coal. They import a lot of coal. And I think clean coal 
technology needs to be part of the solution here in the United 
States, as we're the Saudi Arabia of the world in coal. In 
India, though, their coal is a very dirty coal. It's a high-
sulphur coal. Nuclear power is part of a way for them to clean 
up their environment.
    There also is the realization that our energy, particularly 
oil, which doesn't necessarily come from this country, but from 
hostile areas in the Middle East and elsewhere, that the demand 
for oil, and whether it's in Central Europe, strengthening the 
economy, India's growing economy, China's growing economy, all 
that increases the price of oil. And to the extent that oil or 
clean-burning natural gas is being used for electricity 
generation, as opposed to transportation or for manufacturing, 
that affects the United States, as well.
    The other aspect--it's tertiary, in my view, but it is 
important, and that's the economic benefits to U.S. companies, 
U.S. jobs, and others.
    And the question that comes up, Is this going to undermine, 
somehow, the Nuclear Non-Proliferation Treaty? And why is India 
being treated differently? Well, India has an exemplary record 
of nonproliferating materials. Other countries--North Korea, 
Iran--certainly do not have that record.
    I think this is actually bringing them into the regime. 
There's going to be greater scrutiny, greater transparency, as 
most of their nuclear power plants will be under that regime.
    So, I look at the energy and the economic benefits of this 
as being important. And most importantly is having India as a 
partner. We are not going to win the war on terror, we are not 
going to be able to advance freedom just on our own. We have, 
throughout our history, whether it's from the secession from 
Britain to World War I, World War II, the cold war, it could 
not be the U.S. alone. And India, I think, is a country that 
can positively impact these goals for our country, and our 
values. And it's not just going to be a short-term matter. I 
think this is going to be beneficial for generations to come.
    Now, let me ask you, Madam Secretary--and as you know, I've 
sponsored this, so I'm obviously in favor it, thinking it's a 
good bet. I think it's an ideal bet, and I'm glad we have the 
chance to get this done. And I congratulate you and the 
administration on this, I think, historic breakthrough 
agreement.
    One thing that I've asked, in the past, though, is--India, 
while they're nonconforming in many respects, I think it would 
be desirable for India and their government to join the 
Proliferation Security Initiative. I'd like to pose this 
question to you. Are you, or is our administration, 
encouraging, prodding, cajoling--respectfully, of course--India 
to join the Proliferation Security Initiative? And do you 
believe it would be helpful for India to join?
    Secretary Rice.  We are, in fact, prodding the Indians to 
do so. And they've shown great interest in the Proliferation 
Security Initiative. They've had some questions concerning how 
it might affect certain interpretations that they have about 
the Law of the Sea. But we have, I think, been answering those 
for them. And we think they could be a tremendous asset in the 
Proliferation Security Initiative, given their naval assets and 
given the geographic location of India. And so, yes, we are 
very much prodding them. And I hope they're going to 
participate.
    Senator Allen.  Do you know if that's on their schedule. 
We're asking about sequencing here, which I do want to follow 
up on, but where are they in any sort of deliberation?
    Secretary Rice.  They have told us that they are 
deliberating it seriously. And we have asked them to deliberate 
it expeditiously, because we do believe that it would be a 
helpful signal to not just us, but also to the Nuclear 
Suppliers Group and to other concerned states about 
nonproliferation, were they to join the PSI. So, we've asked 
them to look at it expeditiously. They've promised that they 
will.
    Senator Allen.  Do you think they would get it done in the 
next month or so, 2 months or so?
    Secretary Rice.  We can work with them on that. I think it 
would really help, particularly here, but also with other 
members of the Nuclear Suppliers Group. And so, we're making 
that case with them.
    Senator Allen.  When I was over there, meeting with Prime 
Minister Singh, naturally, this issue came up, and I brought up 
the Proliferation Security Initiative. And I think that would 
be helpful, as we do our due diligence here, that you see that 
sort of action on the part of India's government in this 
respect.
    On finalizing this U.S.-India Nuclear Cooperation Agreement 
and the changes here, trying to get the sequencing, we had a 
previous classified hearing, and I actually asked the same 
questions, similar to Senator Sarbanes. The sequencing, as I 
understood it, that--they have to enter into an agreement with 
the International Atomic Energy Agency, IAEA, with its protocol 
for safeguards for India. You are suggesting that we have 
action here in the U.S. Senate before that agreement is 
reached. Is that correct?
    Secretary Rice.  That is correct, because we think that the 
negotiation of the IAEA safeguards, although they've--it will 
have begun before this--the bill is passed here, or before the 
bill is considered here--it would have begun between India and 
the IAEA. Again, they already do have a safeguards agreement on 
four of their reactors. And so, there's some indication as to 
what one might look like. But, yes, we believe the negotiation 
might take some longer time; and so, we would like to pass the 
legislation and make the entry into force of the legislation 
contingent on the negotiation of the completion of the 
safeguards agreement.
    Senator Allen.  All right, you mention there's four of 
them. Would that be a template that Senators could look at as--
the sort of protocol safeguards--the balance?
    Secretary Rice.  Well, certainly, although, of course, this 
is much broader. They're now, instead of just--I think 81 
percent of their reactors are now outside, they're now going to 
put two-thirds inside. And so, we're talking about something 
much broader. We're talking about, also, safeguards on storage 
facilities for nuclear fuel. So, this is a lot that they're 
taking on, and we believe that getting the legislation passed 
and then monitoring and watching the IAEA negotiations will be 
very important.
    Let me just make one further point on that. We rely on the 
IAEA to determine safeguards around the world. We don't sit in 
the State Department or in the Defense Department or in the 
Energy Department, making safeguards agreements with countries. 
That's why we have an International Atomic Energy Agency. And 
so, of course we rely on their judgment as to what constitutes 
a proper set of safeguards. We play a role. We have a lot of 
personnel who are seconded to the IAEA. But there is nothing 
unusual about having the IAEA be the negotiator and, in 
effect--in a sense, the validator of the reliability and 
significance of--suitability of safeguards.
    Senator Allen.  All right. Assuming the sequencing goes, 
and this action is taken by the U.S. Senate not disapproving, 
IAEA approves it. Then it's contingent on them settling an 
agreement. One thing with India, they do respect the rule of 
law. That's part of their tradition, which is another 
similarity with our country. Ultimately, though, after all our 
action, would not the Nuclear Suppliers Group--that's about 45 
countries--then want to act? Would they not have to then act, 
as well?
    Secretary Rice.  Yes, this would then have to be submitted 
to the Nuclear Suppliers Group, which works by consensus. So, 
yes, it would have to be submitted to them. We have several 
steps ahead of us.
    Senator Allen.  Thank you. My time's up. Thank you, and 
congratulations.
    Secretary Rice.  Thank you.
    The Chairman. Thank you very much, Senator Allen.
    Senator Boxer?
    Senator Boxer.  Thank you, Mr. Chairman. And thank you very 
much, Secretary Rice.
    I share your view that a strong bilateral relationship with 
India is important. India's a thriving democracy with a growing 
economy, and developing closer ties between our nations is 
something I strongly support, in most everything I do. But I do 
not share the view that closer U.S./India ties will be a 
counterweight to China, which seems to be one of the unstated, 
yet driving, forces behind this deal. And I think this type of 
thinking is not only outdated and dangerous, but it really 
flies in the face of reality.
    Last April, India and China signed 12 separate agreements 
on trade, security, and transportation. India and Chinese 
leaders have declared 2006 the year of India/China friendship. 
And it doesn't appear to me that India has any interest in 
being a hedge against China. And I believe it's naive to think 
otherwise. I think it's old-fashioned. I think it's that cold-
war thinking.
    So, efforts to improve U.S./India relations should be a 
standalone policy, not tied to a China card. And I don't fault 
the administration for seeking an agreement on nuclear 
cooperation with India. But I think that agreement should be a 
win for America, and a win for nonproliferation. I don't 
believe this agreement is.
    So, I want to lay out my concerns, and I'll question you 
about just one of them. I do have five areas.
    First, it rewards a nation for not signing the Nuclear Non-
Proliferation Treaty.
    Second, it will give India the capability to produce more 
nuclear weapons than it otherwise could. I have information to 
place in the record from experts that claim it could be that 
the ability of India to produce nuclear weapons could go up 
from 6 a year to 50.
    Third, it requires a change in current law. And I think 
Senator Sarbanes was really in--making his point, that the 
checks and balances of the Congress will be so weakened that 
suddenly the IAEA, you know, becomes more important to this 
administration than the Congress, which is putting us in a very 
strange position, indeed.
    And, fifth, I believe the United States gave away more than 
it received in this deal.
    So, I'm going to expand briefly on these points.
    First, the deal rewards India for not signing the Nuclear 
Non-Proliferation Treaty of 1970. As we all know, the NPT is 
the keystone of international nonproliferation efforts. And 
thanks to the NPT, more than 180 nations have not developed 
nuclear weapons. One of the great incentives of the NPT is that 
non-nuclear-weapons nations are given access to civil nuclear 
assistance. By allowing India to receive civil nuclear 
assistance while it continues production of weapons, India is 
being rewarded.
    Second, this deal will give India the capability to expand 
its arsenal of weapons, as I mentioned before. While U.S. 
nuclear assistance will only be used for civilian purposes, 
uranium fuel imports from the U.S. will allow India to dedicate 
more of its scarce uranium ore for military use.
    And this isn't just me saying it. Let's go to a expert in 
India, who--a strategist, who wrote, in December, the country 
is short of uranium. It was necessary to, quote, ``get imported 
uranium for India's power reactors so as to conserve all our 
indigenous uranium for weapons-production purposes.'' I will 
spell the name of the gentleman who said that, S-u-b-r-a-h-m-a-
n-y-a-m.
    Experts believe this deal could allow, again, India to 
vastly increase its production of nuclear weapons from 6 to 50 
a year, and this could touch off an unintended arms race in the 
region.
    Third, the draft legislation proposed by the administration 
requests that Congress exempt the U.S.-India Civil Nuclear 
Agreement from several key sections of the Atomic Nuclear Act, 
including one that prohibits the export of nuclear material or 
technology to any non-nuclear-weapons state which has detonated 
a nuclear device. India needs an exemption, because, in 1974, 
it detonated a nuclear device, and it did so by improperly 
using U.S. and Canadian civil nuclear technology.
    In addition, there is a troubling report that the Institute 
for Science and International Security has uncovered, quote, 
``a well-developed, active, and secret Indian program to outfit 
its uranium enrichment program and circumvent other countries' 
export control efforts,'' unquote.
    Fourth, the timing of this deal negatively impacts our 
policy in Iran. And this is what I really--going to ask you 
about. Now I understand that there is no comparison between 
India and Iran. But we still have to be consistent, in terms of 
our policy. Either we want to limit the threat of nuclear 
weapons or we don't. There's growing evidence that the timing 
of the U.S.-India agreement is complicating our efforts to 
pressure Iran.
    Just last Wednesday, Germany's foreign minister said the 
timing of the U.S.-India Nuclear Agreement was, quote, 
``certainly not helpful to attempts to ensure that Iran does 
not develop a nuclear bomb.'' As the Los Angeles Times 
editorialized last month, quote, ``The message to Iran and 
other nuclear wannabees couldn't be clearer or more 
destructive. These regimes and others will rightly conclude 
that the U.S. is interested in stopping the spread of nuclear 
knowhow only to regimes it dislikes. This undermines U.S. moral 
leadership on the single most dangerous threat to humankind, 
the spread of nuclear weapons,'' unquote.
    And I want to take a minute to ask you about Iran, because 
we are all in agreement about the threat of Iran. I don't think 
there is a disagreement between anyone here. And you said--in 
your recent editorial in favor of this deal, you said something 
that I agreed with about Iran, that they're a sponsor of 
terrorism, and they have violated their own commitments in 
defying the international community's efforts to contain its 
nuclear ambitions. I agree.
    So, today we read--or March 27th, excuse me--in a Defense 
News headline, ``India Navy Trains Iranian Sailors.'' This is 
very disturbing. You go out of your way, in your op-ed in favor 
of this deal, to tell us all what we need to know about Iran, 
and then we have this circumstance. And my question is--this is 
a 3-year agreement--if they are training Iranian sailors, did 
you make a condition of this deal their ending this support of 
Iran's military?
    Secretary Rice.  Well, thank you, Senator.
    First let me just address the first----
    Senator Boxer.  Would you just answer that question first?
    Secretary Rice.  Well, first of all, the Indians say that 
they do have some low-level, military-to-military contacts with 
Iran. I might just note that they're not the only country that 
has a strong relationship with--a long-term and strong 
relationship with Iran. So do many of our best allies. We are, 
in fact, the ones that did not have diplomatic relations with 
Iran. But I would just underscore what I said earlier to 
Senator Chafee, people are reviewing now, and looking under a 
microscope at what they have been doing with Iran, because 
Iran's behavior over the last couple of years, which we've 
noted for a long time, has simply now given people a lot 
greater pause about their relations with Iran than they had in 
the past.
    I would note, for instance, that India was the only member 
of the nonaligned movement to vote for the referral of the 
Iranian nuclear program to the IAEA. So----
    Senator Boxer.  Madam Secretary, my time is so limited, and 
I don't--I don't want to interrupt you, but to get you to 
answer the question. Did you make the ending of this program as 
part of the deal that you struck? Did you say, ``Before we go 
forward with this, we want this ended''? I mean, this is the 
Defense News of the United States of America.
    Secretary Rice.  Well, Senator----
    Senator Boxer.  ``India Navy Trains Iranian Soldiers.'' 
The--two of their ships were in the headquarters of Indian 
navy's southern command. So, you've got Iranian--you are 
saying, on the one hand, we're going to allow fuel--nuclear 
fuel to go from this country to their country, and they've got 
Iranian ships in port.
    Secretary Rice.  Senator, there are----
    Senator Boxer.  So, have you----
    Secretary Rice.  The Iranians----
    Senator Boxer [continuing]. Made this----
    Secretary Rice.  There are----
    Senator Boxer [continuing]. Part of the----
    Secretary Rice.  There have----
    Senator Boxer [continuing]. Deal?
    Secretary Rice [continuing]. Been, and probably will be, 
Iranian port calls in a number of countries----
    Senator Boxer.  No, this isn't----
    Secretary Rice [continuing]. In the world.
    Senator Boxer [continuing]. Port calls. This is training of 
their military. Did you make this part of the deal, yes----
    Secretary Rice.  Well----
    Senator Boxer [continuing]. Or no----
    Secretary Rice [continuing]. Senator----
    Senator Boxer [continuing]. Because the reason I'm asking 
is, I think some of us would like to make it a condition.
    Secretary Rice.  Senator, I'm trying to distinguish for you 
what is right in that article from what is wrong. There have 
been Iranian ship port calls in India. The assertion, We 
understand that they train Iranian sailors,'' is not right. 
That is----
    Senator Boxer.  So, you say that----
    Secretary Rice [continuing]. Well, not----
    Senator Boxer [continuing]. When they----
    Secretary Rice [continuing]. Everything in----
    Senator Boxer [continuing]. Say that----
    Secretary Rice [continuing]. Is right.
    Senator Boxer [continuing]. ``Two Iranian warships were 
docked in a town''--I don't want to pronounce it wrong----
    Secretary Rice.  In----
    Senator Boxer [continuing]. K-o-c-h-l.
    Secretary Rice [continuing]. In Kochi?
    Senator Boxer.  Kochi?
    Secretary Rice.  Correct.
    Senator Boxer [continuing]. ``The headquarters of Indian 
navy's southern command for a training program under a 3-year-
old military cooperation agreement with Tehran.''
    And all I'm asking you is, Don't you think it's in the best 
interests of America, when we're going to do this extraordinary 
special deal, to make, as a condition, that they end that 
relationship?
    Secretary Rice.  Senator, I think that--again, let me 
distinguish. There are port calls that have taken place between 
Iran and India, yes. The Indians say that they do not train 
Iranian sailors and soldiers. And so, there are military-to-
military contacts. But, again, let me put it in context. India 
is not the only country in the world that has relationships 
with Iran. Many of our friends----
    Senator Boxer.  This is a country we're going to give 
nuclear technology to. That's what this is about. Lots of other 
countries do a lot of things. You're not sitting here 
suggesting that we give them the components to greatly increase 
their development----
    Secretary Rice.  Senator, some of the countries----
    Senator Boxer [continuing]. Of building nuclear bombs.
    Secretary Rice [continuing]. Some of the countries that 
have relations with Iran, we already do U.S. cooperation on 
civil nuclear power with.
    Senator Boxer.  Well, you want a special deal for this 
country, and that's why it's important--and let, just, the 
record show that the Secretary--I'm assuming, by her answer, 
this wasn't even an issue that was brought up. And it's of deep 
concern to me, and, I'm sure, to others in the Senate.
    Secretary Rice.  Well, Senator, let me correct the record. 
The United States has made very clear to India that we have 
concerns about their relationship with Iran. We've made clear 
to them we had concerns about the pipeline. We have made clear 
to them that we had concerns about their initial vote in the 
IAEA. So, of course we have concerns about----
    Senator Boxer.  That's not my----
    Secretary Rice [continuing]. Their relationship with Iran.
    Senator Boxer [continuing]. Question whether we have 
concerns.
    Secretary Rice.  But on this----
    Senator Boxer.  Did we make it part of the condition of the 
deal? I have concerns when my kids to the wrong things, but I 
don't just tell them; I have some action that follows it up. 
So, I just think your words are a bit hollow; specifically on 
this matter. And if you put it together with what Senator 
Sarbanes was able to ascertain, that you're really, in many 
ways, ducking around the Congress, I think this deal has to 
have more checks and balances. That's it.
    And I know my time's expired. And I appreciate your being 
lenient with me, Mr. Chairman.
    Secretary Rice [continuing]. May I just, for the record, 
again, Senator, state that the Defense News article, as it is 
written, is not, we believe, correct about the military-to-
military relationship between Iran and India.
    Thank you.
    The Chairman. Thank you very much, Senator Boxer.
    Senator Alexander?
    Senator Alexander.  Thank you, Mr. Chairman. Is this on 
now?
    Madam Secretary, thank you for coming and being well 
informed and answering our questions.
    As we look ahead, would you suggest that, for our country, 
if we were thinking about the emergence of three great powers 
or influences in the world, that it--one might say one might be 
China, one might be India, and one might be political Islam?
    Secretary Rice.  I think that would be fair, Senator.
    Senator Alexander.  And if we were to look at those three, 
would you say that our prospects for a mutual relationship or 
partnership might be better with India than it might be with 
China or political Islam?
    Secretary Rice.  Well, I think our possibilities for a deep 
strategic relationship with India are particularly strong, 
because of our shared values.
    Senator Alexander.  And I assume you wouldn't suggest that 
we should think of India, a country of--that will be the 
largest country in the world, as one of our children----
    Secretary Rice.  Absolutely not.
    Senator Alexander [continuing]. But as a partner that we 
would try to respect and understand their differences in where 
they are today and where we are today, and where we both hope 
to go and see if we have mutual interests.
    Secretary Rice.  That's right.
    Senator Alexander.  I would like to focus more on nuclear 
power and clean air and the environment. Senator Allen talked 
about energy. And he and I have talked a good deal about in. 
Senator Chafee and I have worked together on clean air in this 
country.
    And one of the things I would suggest, Mr. Chairman, that 
we might want to explore, although it's a little bit out of our 
jurisdiction, is the impact of dirty air in India and China 
over the next 30 or 40 years on the air we breathe in the 
United States.
    Have you any--I mean, if I'm correct, only about 2 percent 
of the current power in India is nuclear. Is that about right?
    Secretary Rice.  That's correct. About 2 percent, yes.
    Senator Alexander.  Of producing electricity. And in Japan 
it would be--well, in France, it would be 78----
    Secretary Rice.  It would be 78 percent in France. And 
it's, I think, in Japan, about 30 percent, at this point----
    Senator Alexander [continuing]. And in the United States, 
what we have learned in our hearings, in Energy, is that while 
nuclear power only produces 20 percent of our electricity in 
the United States, and we use about 25 percent of all the 
energy in the world, it produces 70 percent of the carbon-free 
electricity, even though we haven't built a new nuclear power 
plant in 30 years. So, increasingly, those who are concerned 
about global warming, about mercury, which is a new pollutant 
in the air, which we're just now beginning to regulate in the 
United States, about sulphur and nitrogen, are recognizing that 
to produce large amounts of clean carbon-free energy, there 
really is only one technology available today, and that's 
nuclear power.
    Secretary Rice.  Right.
    Senator Alexander.  Do you have any estimate of to what 
extent the pollutants that might come from dirty coal plants in 
India and China over the next 30-40 years might end up in the 
air that Americans breathe?
    Secretary Rice.  I don't have an estimate of that, Senator. 
But, obviously, because the particulates that are being 
released by this dirty air are contributing to greenhouse gas 
emissions quite significantly--in fact, the emissions in India 
have increased about 3 percent a year; that's about twice the 
rate as in the United States--it's obviously contributing to 
the global problem that we are having with greenhouse gas 
emissions. And that, for the United States, of course, is a 
very bad thing.
    Senator Alexander.  The Senator from California mentioned 
the unclean air in Los Angeles. We have a similar problem in 
Tennessee, around the Great Smoky Mountains. I wonder if you 
have any idea of what percent of the dirty air in Los Angeles 
comes from India and China, or will, over the next 30 or 40 
years, if they were to build coal plants instead of civilian 
nuclear reactors?
    Secretary Rice.  I don't have that estimate, Senator, but, 
obviously, contributing to the global problem with greenhouse 
gas emissions is a problem for us, as well as it is for the 
Indians themselves.
    Senator Alexander.  I know I'm asking you questions that, 
in some cases, might be best asked of the Environmental--of the 
EPA and the Energy Department, but I think they're questions 
that are relevant to our weighing of these balances here. Such 
a question would be, Madam Secretary--and perhaps if you don't 
have the answer to this, someone within the administration 
could--do you have any idea--we've become increasingly 
concerned about the amounts of mercury that are in the air in 
the United States--do you have any idea how much of that 
mercury comes from other countries--in effect, blown around the 
world and blown into the United States?
    Secretary Rice.  I don't, Senator, but I'll seek to get an 
answer for you.
    Senator Alexander.  As I look at India--and we talk about 
partnerships--are--is it not true that the United States 
Senate, last year, approved a $5 billion credit to help a 
British company, Westinghouse, owned by British, although 
Westinghouse is in Pittsburgh, to help build civilian nuclear 
power plants in China? And what were the considerations----
    Secretary Rice.  Right.
    Senator Alexander [continuing]. There?
    Secretary Rice.  We do--we did, in fact, do exactly that, 
because we believe that civil nuclear cooperation with China, a 
country with which we have cooperation, but, of course, we have 
significant differences, including, I might say, on Iran, for 
instance, that the need for civil nuclear energy in China, 
given China's incredible appetite for growth and appetite for 
energy, was in the best interest of this country, not to 
mention in the commercial interest of those who could build the 
power plants. But, yes, we absolutely did agree to that.
    Senator Alexander.  Is it true, or not true, that if the 
United States did not help India and China build nuclear 
reactors for civilian power, that Russia or France or some 
other country might do that, and, in the process, develop a 
massive new technology and business that could then be helpful 
in their own countries in having clean air?
    Secretary Rice.  Well, Russia already has some activity 
with China that they've grandfathered in under certain Nuclear 
Supplier Group decisions. We do note that India's ability to 
acquire civil nuclear cooperation on a large scale is 
constrained by their absence of a relationship with the IAEA, 
which is why we think that getting them a relationship with the 
IAEA, getting them to agree to certain of the standards that 
all of us are adhering to, which they've said they are going to 
do, puts them in a position to get this clean source of energy 
for an economy that's growing at 8 percent. They're simply 
either going to have to do it through dirty coal--and, as you 
and Senator Allen have been noting, their coal is particularly 
dirty--or through some other means. They're not going to stop 
growing to do it, they're going to do it one way or another. 
And we think that civil nuclear is the--by far, the best path 
for them.
    Senator Alexander.  Thank you, Madam Secretary.
    Mr. Chairman, I think that what I will do is submit, if 
it's appropriate, to the Secretary a short series of questions 
that might require some answers from the Department of Energy 
or the Environmental Protection Agency, so that all of us can 
consider that. And they will be aimed at trying to understand 
what the consequences are if we don't help India and China 
especially with civilian nuclear power.

    [The information previously referred to appears in the 
appendix to this hearing.]

    Senator Alexander.  One of the leading natural--or 
environmental groups, the Natural Resources Defense Council, 
for example, is deeply concerned about the impact of dirty coal 
plants in India and China on the clean air in the United States 
and the rest of the world. That's just mercury, nitrogen, and 
sulphur. Add to that the global warming issues. So, I think 
it's important for us to understand that, and understand how 
that might not just affect the rest of the world, but to what 
extent that air blows into Los Angeles and into the Great Smoky 
Mountains and makes it impossible for us to deal with that.
    Thank you for the time.
    Senator Biden.  Mr. Chairman, would you give me 10 seconds?
    The Chairman. Yes, Senator Biden.
    Senator Biden.  I'd like to put in the record the CRS 
report on that issue, and quote from one portion of this, 
``However, such reductions--the totality of the reductions that 
would be accomplished by their full-blown nuclear program''--
civil--``such a reduction would constitute 2 percent of India's 
current CO2 emissions and 3.6 percent of India's 
energy-related emissions.''
    It's real, but it's not very significant.

    [The information previously referred to appears in the 
appendix to this hearing.]

    Senator Alexander.  Well, Mr. Chairman, I would submit 
that, in place of three or four thousand megawatts--well--or 
30--the number of megawatts of nuclear power that India is 
thinking about building--20-, 30-, 40,000 megawatts, would be 
40, 50, or 60 conventional coal plants. That's a lot of 
sulphur. That's a lot of nitrogen. That's a lot of mercury. And 
that's a lot of carbon.
    The Chairman. We would appreciate responses from the 
administration to the Senator's questions.
    Secretary Rice.  I'd be most happy to get responses for 
you.
    The Chairman. Thank you, Senator Alexander.
    Senator Kerry?
    Senator Kerry.  Thank you, Mr. Chairman. Is that--I have to 
deal with this thing.
    Senator Boxer.  I think it's on.
    Senator Kerry.  Thank you.
    Welcome, Madam Secretary.
    Secretary Rice.  Thank you.
    Senator Kerry.  Glad to see you.
    Madam Secretary, I was in India, as I think you know--and I 
thank Secretary Burns for briefing me before I went, having a 
good discussion about this issue--in January, and I had the 
opportunity to meet with Prime Minister Singh and his national 
security advisor and the nuclear--head of the Nuclear Power 
Commission. And our discussions focused not just on India's 
nuclear needs, energy needs, as a whole, but also the way that 
this deal might be helpful to them in the long run, and, 
needless to say, how this deal is important to the relationship 
between our two countries. I understand that. I think we all 
understand that.
    I heard a couple of colleagues talking about, sort of, 
rewarding India for not being a member of the NPT. I think we 
have to get over this notion that because of what's happened in 
past history, we can't deal with new realities that are on the 
table. If we always stay stuck in the same place, we never 
advance any ball. That is not to say that I think you have 
advanced the ball as far as you could have.
    I've said this with Secretary Burns, I--this--I'm inclined 
to support this agreement. And I said that in India, I support 
it in principle, because I think it's important to our 
countries, I think it's important to bring more of India's 
program under the IAEA safeguards. That is important. You have 
to ask yourself a simple question. If you want to sit there and 
say, ``Gee, they stayed out of the NPT for all these years, 
and, therefore, we're going do something--we ought to get 
something for it.``
    Now, some people think we ought to have gotten more for it. 
I happen to believe that. It's not where we are. It's not the 
deal I would have negotiated, personally. I think there was a 
great opportunity here to deal with the overall proliferation 
issue of the region, including Pakistan and China. And 
proliferation is not just the movement of information and 
technology to other countries, it is also the building of 
weapons. And this clearly allows that continued building of 
weapons. But, you know, the perfect world is not, sort of, 
what's in our hand here. And I understand that. I do think you 
could have gotten closer to that. And I wish you had.
    But the fact is, it is better to build this relationship. 
It is better to move us forward, in terms of the controls that 
will exist on the rest of what is defined as the civilian 
program.
    Now, India has the right to define what's going to be in 
the civilian and what's out. And some people have issues with 
that. I would hope that in the next days--and I've suggested 
this to Secretary Burns, and I think it would help you 
enormously with Congress, and I hope India is listening to 
this, and they're hearing some of the reluctance of some 
members--if we could try to find a way to advance the fissile 
material cutoff efforts, and if India itself could be helpful 
in these next days in perhaps helping us to rapidly define the 
IAEA safeguards standards--I am very uncomfortable, though I 
want to help--and I think I'm inclined to say we should--we 
have to move forward here--I think you all have a 
responsibility to try to do the best we can in the next days to 
make that an evenhanded process between the Congress and 
yourselves and India.
    I think Senator Sarbanes asked very important questions 
with respect to that. I heard them from back in my office. I am 
uncomfortable voting to change the overall structure without 
seeing those safeguards, knowing what they're going to be. And 
it seems to me reasonable, eminently reasonable, for you to 
press this process, given the concerns many members have, to 
help us to see those, to share that. And I think you'll find a 
Congress far more prepared to move forward more easily and with 
greater confidence if we were to do that.
    So, I would ask you whether or not it's not possible, 
really, to try to guarantee to the Congress--I know, in the 
briefing with Secretary Burns, I think his opinion was that 
that was important and might be done. And I wonder if you 
might, sort of, give us that confidence here today.
    Secretary Rice.  Well, we will certainly press it, Senator, 
both the Fissile Material Cutoff Treaty and the IAEA 
safeguards. During the recent visit of Mr. Saran, I told him, 
in no uncertain terms, that this was going to be an issue with 
Congress and that they ought to negotiate with the IAEA as 
quickly as possible. I'd be--it would be a problem to undertake 
a guarantee, but what I can guarantee you is that we will make 
every effort that we can to accelerate and push that process 
forward.
    Senator Kerry.  And what about the--what about the notion 
of advancing some of these other issues that were left off the 
table that might give----
    Secretary Rice.  Yes.
    Senator Kerry [continuing]. Congress greater confidence 
with respect to the fissile material cutoff or even the broader 
nonproliferation regime itself, which really needs an infusion 
of restructuring----
    Secretary Rice.  Yes.
    Senator Kerry [continuing]. And greater urgency?
    Secretary Rice.  Well, on the FMCT, absolutely. We are 
trying to get the work done on that, ourselves. We've told the 
Indians they need to be helpful in that. They've promised that 
they will, and we will press them very hard to help us on the--
and they should know, too, that, by the way, it's one of the 
determinations that the President will have to make. So, we 
have that leverage.
    Secondly, on the broader proliferation regime, I agree with 
you, Senator. One of the reasons, I think, that Mohamed 
ElBaradei has been in favor of this is that there is much that 
India can do, as a big state with nuclear technology, to 
enhance our ability to, for instance, criminalize the behavior 
of those who trade in nuclear technologies. They have just 
passed a very strong act against this kind of activity, in 
2005, which would criminalize--it's much more like our law--
criminalize, in a much more comprehensive way, any behavior 
that is betting the trade in weapons of mass destruction 
technology. I think that's the kind of thing that they can do.
    Also, by adhering to these various regimes--the missile 
technology control regime, the NSG guidelines--they can help us 
to expand the concept of what is the nuclear proliferation 
regime, because the NPT is an important part of it, but we 
clearly need more than the NPT. And I want to emphasize, again, 
that, on the Proliferation Security Initiative, we will press 
very hard.
    I should just mention, Senator--you are well aware of these 
efforts, but--because they started not with our administration, 
but go back to other administrations--we would like to see, 
obviously, in the regional sense, in the relationship between 
India and Pakistan and others, look at regional moratorium on 
fissile material production. We've made it very clear that we 
would encourage that, that we would encourage India and 
Pakistan to look at their nuclear relationship in the way that, 
in some of the earlier days, people were concerned about safety 
and security between the U.S. and Soviet arsenal. So, there are 
lots----
    Senator Kerry.  Let me ask you----
    Secretary Rice [continuing]. A lot of things that we could 
do.
    Senator Kerry [continuing]. Did you explore--I mean, one of 
my concerns--I raised this issue with both the prime minister 
of Pakistan and President Musharraf, and there seemed to be a 
spark of interest--maybe they were just--maybe they were being 
kind, but there seemed to be a genuine spark of interest in the 
notion of trying to arrive at some agreement regionally on the 
numbers of nuclear weapons. And it seems to me that that's a 
place where the United States could have offered real 
leadership, is trying to bring the parties together. It's hard 
to understand why they would need to continue to build levels 
beyond an adequate deterrent between each other and China. Did 
you explore that?
    Secretary Rice.  Well, what we couldn't achieve, and I 
think it was unlikely, was a constraint unilaterally by any one 
state. But the idea that has been pursued in some second-track 
arrangements, some second-track discussions, of discussions 
between the parties about not just absolute levels, but also 
safety and security and confidence-building measures, because 
it's something we're very interested in and we'd like to 
pursue.
    I think, Senator, we now have the kind of relationship with 
the two that might make it worthwhile. I can't say that it's 
going to have an immediate payoff. These things are hard. But--
--
    Senator Kerry.  This--you know, this really shouldn't----
    Secretary Rice [continuing]. Very interested.
    Senator Kerry [continuing]. That hard. The United States 
and Russia, under the leadership of President Reagan, came out 
at Reykjavik, if I call, and said, ``We're going to go down to 
zero.'' Now, we backed off of that, and I think we're going to 
2500, from tens of thousands. If we could do it, the two great 
superpowers on the face of the planet, and everyone understands 
the absurdity of that kind of a conflict, so the adequacy of 
deterrence is defined--China has gotten along for 40 years 
quite effectively with, I think, in the double-digits numbers. 
I'm not going to go into classified areas here, but we all know 
that it has been a meager program compared to both the former 
Soviet Union and the United States. And they've been content to 
feel they have a sufficient deterrent.
    So, it is absurd to believe that they have an interest in 
building up. And certainly India, if China has not, and is 
relatively even with respect to--Pakistan doesn't--the entire 
nonproliferation structure could have been advanced if the 
United States had put on the table that notion, and pushed for 
it.
    Now, it's not within this agreement. And I understand that. 
That doesn't mean we shouldn't move forward here. But I would 
love to see the administration be more aggressive. I mean, even 
the last meetings that took place, we were not particularly 
engaged. We need to lead on this. And, I might add, it is hard 
to lead when we have, in our own budget, money for a new 
nuclear weapon, a so-called bunker-busting nuclear weapon. I 
mean, as other countries make judgments about their own 
deterrents and their own threat-response needs, they measure 
what other countries are doing. And if we, indeed, are the ones 
who are moving forward with a new concept, it sends shivers 
down their spine, and their defense establish, just like ours, 
comes to them and says, ``Hey, boys, better start to respond.''
    So, I would hope you would really have a larger vision with 
respect to how we could ratchet this down. And, within that 
context, I don't think you'd find many Senators saying no to 
this.
    Secretary Rice.  Thank you, Senator. We obviously would 
like to see the tensions in the region continue to abate, as 
they have been. I think we believe that we've built 
relationships with India and Pakistan that allow us to pursue 
some of the ideas that you're talking about. And they are 
certainly much like the ideas we'd like to pursue.
    Thank you.
    Senator Kerry.  Could I just ask quickly, How will the 
United States react is China presses for a Pakistan exception 
similar to the India exception?
    Secretary Rice.  We've been very clear, publicly, 
privately, with China, with Pakistan itself, that Pakistan is 
not an appropriate state for this kind of an exception. It's 
just a different history----
    Senator Kerry.  What if they make that the price for 
approval of the India exception?
    Secretary Rice.  It can't be the price for approval of the 
India exception. Simply can't be.
    Senator Kerry.  Could that be a showstopper?
    Secretary Rice.  I don't believe so, Senator. Nothing that 
we've had discussions would suggest that. And Pakistan itself 
understands its own special history.
    Senator Kerry.  And in keeping with Senator Sarbanes's 
concern, you would not react badly if Congress didn't write 
itself out of this process?
    Secretary Rice.  Well, Senator, we believe very strongly 
that Congress is not writing itself out of this. We are only 
asking that, by amendment of the law, we would follow the 
procedures that Congress would normally follow to approve 
nuclear commerce with any state.
    Senator Kerry.  Okay. Well, thank you very much, Madam 
Secretary. I appreciate it.
    Secretary Rice.  Thank you.
    Senator Kerry.  And thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Kerry.
    Now, just as a management problem here, I've been advised 
the Secretary needs to leave at 12:05. I would ask the 
Secretary's indulgence for a moment, as I try to parse, now, 10 
minutes to each of three Senators who have not been heard. And 
I hope the Senators will respect the 10 minutes, because we 
will be taking a little bit more of the Secretary's time, and 
she faces testimony before our House colleagues very shortly.
    But if we may proceed--Senator Feingold?
    Senator Feingold.  Chairman, I will try to keep it under 10 
minutes, out of respect for my colleagues. But let me thank you 
for holding today's hearing with Secretary Rice on the proposed 
United States/India Nuclear Energy Agreement. This is obviously 
a very important subject, and--as shown by the attendance here 
at the hearing.
    Madam Secretary, I appreciate your spending time with us 
today.
    And I'd just ask that my full statement be placed in the 
record.
    The Chairman. It will be placed in the record in full.

    [The prepared statement of Senator Feingold follows:]

    Mr. Chairman, thank you for holding today's hearing with Secretary 
Rice on the proposed United States-Indian nuclear energy agreement. 
This subject is extremely important and I am pleased that this 
committee is continuing to take a close look at this complex issue. 
Madam Secretary, I appreciate you spending time with us today on this 
very important issue.
    I've been troubled by the way the administration has handled this 
issue from the start: not consulting with Congress prior to announcing 
a deal that requires changes to U.S. law; submitting legislation asking 
Congress to remove itself from any oversight; and, pushing Congress to 
approve this legislation without the benefit of seeing the agreement.
    The process problems are not my main concern, however. After 
reviewing what is known about the deal, which admittedly is not much at 
this time, I would be hard pressed to explain to my constituents why 
this agreement is so vital to our national interests, and why it has to 
be done now. I agree that India is an increasingly important partner 
and player on the world stage. I also agree that U.S.-India relations 
are extremely important. Increased efforts to enhance our relationship 
with India are important. However, our relationship with India does not 
rest on this one deal, nor should it. Whether this deal goes through or 
not, India will likely continue to pursue its relationships with China 
and Iran in ways that won't always be in our interest. I also find the 
energy arguments for this deal unconvincing. India has tremendous and 
growing energy needs but nuclear energy is not necessarily the answer. 
There are far more cost-effective, responsible and immediate ways to 
tackle that problem. Finally, this deal is not guaranteed to promise 
direct financial opportunities for U.S. companies. India has promised 
no preferential treatment for the United States and companies from 
countries such as Russia and France may be better situated to benefit 
financially.
    In addition to providing us with a better rationale for this 
agreement, the administration must also provide us with a more detailed 
analysis of the potential negative impact it could have on the 
nonproliferation coalitions and policy we've painstakingly put together 
over the last 30 years. The proliferation of nuclear technology, know 
how, and material may be the top national security threat we face. How 
does this deal impact that threat? How does this deal impact fragile 
relationships with countries like Pakistan, South Africa, or China? The 
answers we've received thus far--mostly assurances that this deal is 
``strategically important''--do not suffice.
    Today will be an opportunity for us all to discuss and make some 
progress on these very serious issues. I appreciate that Secretary Rice 
has come before the committee today and I hope that she will provide us 
with much needed clarity on the proposed agreement with India.

    Senator Feingold.  I'll be blunt that I've been troubled by 
the way the administration has handled this issue from the 
start, not consulting with Congress prior to announcing a deal 
that requires changes to U.S. law, submitting legislation that 
asks Congress to remove itself from any oversight, and pushing 
Congress to approve this legislation without the benefit of 
seeing the agreement.
    The process problems are not, however, my first concern. 
After reviewing what is known about the deal, which, 
admittedly, is not much at this time, I would be sort of hard-
pressed to explain to my constituents why this agreement is so 
vital to our national interests. In addition to providing us 
with a better rationale for the agreement, I urge the 
administration to provide us with a more detailed analysis of 
the potential negative impact this agreement could have on the 
nonproliferation coalitions and policies we've painstakingly 
put together over the last 30 years.
    The proliferation of nuclear technology, knowhow, and 
material may be the top national security threat we face, and I 
fear that this deal could end up making our world less safe, 
rather than more safe.
    But I am glad you're here. And I obviously understand this 
is a very complex issue. I would just want to ask a few more 
questions.
    Under Secretary Burns has publicly noted that all future 
civilian reactors built in India will be subject to safeguards; 
thus, arguing that an increasing percentage of India's nuclear 
program will be under international controls. But doesn't India 
get to decide whether a given reactor is classified as civilian 
or military? So, what's to prevent India from designating all 
future reactors as military in order to avoid international 
safeguards?
    Secretary Rice.  It is true that India makes that 
determination as to sovereign states. We make that 
determination, for instance. But the Indians--we believe the 
incentives, the powerful incentives for them, are on the 
civilian side, not on the strategic nuclear side. They have 
50,000 tons of uranium reserves, more than enough if they 
wished to use the small percentage of that, that would be 
required for a military program. It's on the civilian side that 
you need a lot of nuclear material to fuel a civilian program 
over a long period of time.
    So, we simply think the incentives are in the other 
direction, and that the Indians are trying to get civil nuclear 
energy, and that this is something that, of course, people will 
be able to watch. But it's--I think someone said--maybe it was 
Senator Biden who said that the Indians are also taking on a 
set of obligations here with the world, and people will be 
watching.
    Senator Feingold.  But you concede that this is entirely 
within their discretion----
    Secretary Rice.  It----
    Senator Feingold [continuing]. This designation.
    Secretary Rice [continuing]. Is, indeed, within their 
discretion.
    Senator Feingold.  Thank you, Madam Secretary. You said 
that the safeguards will be permanent, but India emphasized 
that these, quote, ``permanent safeguards would be predicated 
on an uninterrupted supply of fuel for civilian reactors.'' 
Doesn't that tie our hands, down the road? If, in the future, 
India tests or uses nuclear weapons or proliferates nuclear 
technology, will the United States continue to supply fuel for 
India's nuclear reactors?
    Secretary Rice.  We've been very clear with the Indians 
that the permanence of the safeguard is permanence of the 
safeguards, without condition. In fact, we reserve the right, 
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, that the deal, from our point of view, 
would, at that point, be off.
    Senator Feingold.  As you noted, with the world's second 
largest population and a fast-growing economy, we all have to 
be concerned about India's energy consumption and production of 
greenhouse gases. You've said that this deal will reduce 
India's reliance on coal and oil, but I would argue that there 
are more effective means of doing so than selling a few nuclear 
reactors. India's Bureau of Energy Efficiency estimates that 
improving energy efficiency could save 80 to 20 gigawatts per 
year, which is more than all the future output from nuclear 
reactors now being planned. If improving India's energy mix is 
a primary motivation of this deal, have you considered other 
non-nuclear approaches, like a cooperation agreement that would 
help India improve its energy efficiency?
    Secretary Rice.  We intend to do all of that. In fact, on a 
multilateral basis, through the Asia-Pacific Partnership, which 
is India, South Korea, the United States, Australia, we are 
engaged also in questions about energy efficiency, about other 
kinds of energy technology, trying to use other sources of 
renewables. So, that piece, we are doing. But it doesn't 
obviate India's growing need for nuclear energy as a part of 
the mix.
    Senator Feingold.  Finally, according to an article by Dr. 
Leonard Weiss for the Bulletin of Atomic Scientists, only 1 
percent of India's electrical capacity is fueled by oil. So, 
replacing this tiny amount with nuclear power won't even 
register on the world oil market. Do you maintain that this 
deal will have a major impact on India's oil consumption and on 
the price that U.S. consumers would pay for oil?
    Secretary Rice.  Well, India does need to change its mix. 
I--the point--of course, they use principally coal, which is 
very, very bad for the environment, given the nature of their 
coal. But because they are trying to diversify away from coal, 
they are looking at other sources, and right now, while the 
percentage from oil is somewhere in the 30 to--some people say 
as much as 50 percent, but let's say it's at the 35 percent--as 
they diversify, you would like that diversification from coal 
not to go to oil, which is one way that it could go, but, 
rather, from that diversification for coal--from coal to go to 
multiple other sources that are clean and that do not require 
further hydrocarbons, and that do not require their dependence 
on what we consider to be, and we believe we are convincing 
them, are unreliable suppliers.
    Senator Feingold.  Thank you, Madam Secretary. In order to 
give my colleagues a chance, Mr. Chairman, I'll defer, at this 
point.
    The Chairman. Well, thank you very much, Senator Feingold, 
for your thoughtfulness. I appreciate that.
    Senator Nelson?
    Senator Bill Nelson: Thank you, Mr. Chairman.
    I'm going to be brief because I want my colleague to have 
plenty of time also.
    Madam Secretary, I might say that you have a very fine 
representative in Secretary Burns, whom I have talked to 
extensively about this issue.
    I'm concerned--earlier, it came up with Senator Boxer--
about this article that appeared in the Post today about the 
Indian port call by an Iranian warship. And so, in following up 
on the earlier discussion, is the Indian military cooperating 
in any way with the Iranian military?
    Secretary Rice.  The Indians have told us that they have 
some, as they characterized them, low-level military-to-
military contacts. But, again, Senator, I would just note that 
there are a number of countries that have relations with Iran, 
and it's, of course, the sovereign right of a country to have 
relations with whomever they would like to have relations. I 
believe we're not going to do better in pulling India toward us 
by insisting that they cut off relations with other states. I 
don't think that's going to work very effectively. But the 
entire world is coming to think differently about its 
relationships with Iran. We see it in the exodus of banking and 
financial institutions from Iran. We see it in the vote that 
India took in the IAEA Board of Governors. This is a 
relationship that goes back a very, very long way. But as Iran 
changes its relationship with the rest of the international 
community, I think you're going go to see more and more states 
reassessing their relationships with Iran.
    Senator Bill Nelson: Well, I certainly hope that's the 
case, that the entire world is reassessing and will do 
something about it afterwards because, at least from this 
Senator's point of view, the nuclearization of Iran would be 
one of the greatest destabilizing threats to the interests of 
the United States.
    Secretary Rice.  I could not agree more, Senator.
    Senator Bill Nelson: I'm interested in the implications of 
this agreement with India, with regard to that. What do you 
think are the implications of this agreement for our diplomatic 
efforts to convince Iran to give up its nuclear processing?
    Secretary Rice.  Senator, I just returned from a very long 
meeting with the other members of the ``P5 plus Germany,'' and 
I can tell you, the India deal did not come up in this long, 
long meeting on Iran.
    Now, I know that there are those who say, ``Well, you're 
treating India differently than you are proposing to treat Iran 
and North Korea.'' Yes. India is a democracy, a transparent 
society. Iran is the central banker of terrorism, a 
nontransparent society. North Korea, even less transparent than 
Iran. North Korea and Iran have, of course, broken their--first 
of all, signed the Non-Proliferation Treaty, but then have not 
lived up to those obligations, flaunted those obligations. 
India is trying, having never signed the NPT, to move toward 
the taking on voluntarily of obligations that are similar to 
those of NPT states. And so, the situations are just very 
different. And I think if we allow the Iranians and the North 
Koreans to say that we cannot have civil nuclear cooperation 
with a good actor like India because we have to deal with their 
bad behavior, then that would be a very bad thing for U.S. 
policy. And so, I don't think it has an effect.
    I should just note, too, that, by the way, the civil 
nuclear--the possibility of civil nuclear power is something 
that the world is offering to Iran. But what has been said is, 
``You can't have civil nuclear cooperation that has enrichment 
and reprocessing on Iranian territory because of your very bad 
past history over the last 18 years in violating your IAEA 
agreements.``
    So, on the one hand, we have a democratic, transparent 
state that has not violated agreements that it signed onto--it 
didn't sign onto the NPT--and states that are wantonly 
violating those agreements, supporting terrorism, 
nontransparent, repressing their people. I just think there is 
any comparison, and I don't think we should allow one to be 
made.
    Senator Bill Nelson: Mr. Chairman, I want to give my 
colleague plenty of time to ask his questions.
    I will follow up with you in further discussion about how 
we can bring China and Russia around to our point of view, how 
it's in their interest to have a non-nuclear Iran, and what 
more we can do in Europe to get those who are resistant there 
to achieving that goal. This ought to be an all-out effort.
    Secretary Rice.  Thank you, Senator. I look forward to the 
conversation, yes..
    Senator Bill Nelson: Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Nelson, for your 
thoughtfulness to the committee and to your colleague.
    And now, the colleague that you have mentioned, Senator 
Obama?
    Senator Obama.  Senator Nelson is a fine man. [Laughter.]
    The Chairman. I agree.
    Senator Obama.  Madam Secretary, thanks. You know, I'm 
always batting last in the line-up, so I don't always know if 
I'm being redundant in some of my questioning. Forgive me if 
some of these questions were posed earlier and you already 
answered them.
    Just a brief statement, at the opening. I personally think 
that the geopolitics of this agreement make a lot of sense. And 
I suspect that's shared by many at this table. I think that 
India is a critical long-term partner for the United States. As 
you've noted, they share our values. There are deep commercial 
and personal relationships between the two countries that I 
think need to continue to grow. India is only going to continue 
to be a larger player on the world stage, and they occupy an 
important piece of real estate, in addition to having a billion 
or so people.
    So, there is really no argument with respect to the 
geopolitical issues. I also think that it's legitimate to say 
that India--the nature of the society and its democracy and its 
government are different from Iran. We can make easy 
distinctions, I think, between India and other nations that 
might be pursuing nuclear arms. They've shown themselves to be 
responsible, so I think we can concede that, as well.
    Having said all that, there are specifics to the agreement 
that I have concern about. So, let me just be clear--if I'm 
understanding this properly. You've got 22 nuclear plants, 14 
now under the agreement would be subject to IAEA safeguards, 8 
would be off limits from IAEA inspection. My understanding, is 
that the eight that are off limits will be producing large 
amounts of nuclear material; that, as a consequence of those 
eight not being under the inspection regime, that this 
agreement could free additional weapons-grade material to India 
that they can use, should they decide. Now, it's a question as 
to whether it would be in their interest to do so or not, but 
should they decide they want to produce more weapons, this 
agreement could free up additional material that would allow 
them to build more weapons. Do you think that that is a 
accurate characterization or an inaccurate characterization?
    Secretary Rice.  Senator, I don't think it's accurate, for 
the following reason. Of course, currently 81 percent are 
outside, so we will now have 65 percent inside. And the--of the 
reactors inside safeguards--but the Indians have very large 
stores of uranium--large reserves of uranium, maybe 50,000----
    Senator Obama.  So, you think it matters.
    Secretary Rice.  It doesn't matter. And if I could----
    Senator Obama.  Because they've got enough nuclear----
    Secretary Rice.  They--if they wanted to build more----
    Senator Obama.  Okay.
    Secretary Rice [continuing]. Nuclear weapons, they can do 
it.
    Senator Obama.  All right.
    Secretary Rice.  The incentives are on the other side. But 
the constraint is actually on the civil side, because you need 
more material on the civil side----
    Senator Obama.  Okay.
    Secretary Rice [continuing]. Because of the--it takes much 
more material on the civil side than on the military side.
    Senator Obama.  No, I understand. So, let me restate the 
point, then. Precisely because the Government of India needs 
more material on the civil side, they're confronted with a 
choice as to, ``Do we use more nuclear material on the military 
side or the civilian side?'' I may be wrong on this, so----
    Secretary Rice.  It's just----
    Senator Obama  [continuing]. Explain.
    Secretary Rice  [continuing]. Such a small percentage that 
you need on the military side. That's really the point. It's a 
very small percentage that you need on the military side.
    Senator Obama.  Okay.
    Senator Obama.  My understanding, though, is that we are 
transferring technology or training to them, to the civilian 
side, but that the 14 that are within the inspection regime and 
the eight that are not are more or less identical. So, whatever 
we're giving to them is going to be made available--it is 
transferable to the eight that are not.
    Secretary Rice.  Well, the fact is, they know how to make 
nuclear weapons. We know that.
    Senator Obama.  Right.
    Secretary Rice.  And so, there isn't a technology transfer 
issue here. This isn't----
    Senator Obama.  Okay.
    Secretary Rice [continuing]. A knowhow issue, as it is with 
the Iranians. And, again, I would just emphasize that the 
pressures are on the civilian side. The amount of material that 
you need on the military side is pretty small.
    Senator Obama.  Okay. So, the basic argument that the 
administration making--is making, then, is that this doesn't 
really matter.
    Secretary Rice.  It doesn't constrain their----
    Senator Obama.  It doesn't constrain them. If that's the 
case----
    Secretary Rice.  But it also--it doesn't also----
    Senator Obama.  If that--if that's--if it doesn't constrain 
them, why bother checking on the 14?
    Secretary Rice.  Well, because----
    Senator Obama.  Why are we going to make a bunch of IAEA 
inspectors wander around 14 power plants if what you're arguing 
is, ``They've already got the technology, they've got enough 
material, they're entirely trustworthy``? What is it that we're 
gaining as a consequence of putting them under this inspection 
regime?
    Secretary Rice.  Well, let me just make the point and 
complete a sentence. It doesn't constrain their program. We 
don't constrain it now. This agreement does not constrain it. 
It also doesn't enable it in any way.
    Senator Obama.  Right.
    Secretary Rice.  And so, those who are arguing that somehow 
because of this agreement you're enabling a larger program, 
we--is simply not right.
    Senator Obama.  Okay, but----
    Secretary Rice.  Now, as to what you gain, the IAEA, right 
now, has very little access to the Indian program at all. There 
are four Russian reactors that are safeguarded. That's it. It 
also has no access to the future development of the Indian 
nuclear program. And as India puts more and more nuclear power 
online, you will capture now a much larger percentage of the 
Indian civil nuclear program. The Indians themselves estimate 
as much as perhaps 90 percent over the next decade or so. So, 
you're getting more and more of the program under safeguard. 
You're also engaging----
    Senator Obama.  What does that mean, specifically?
    Secretary Rice.  It means, specifically, that as new 
civilian reactors come online, and others are decommissioned, 
you are getting more and more of the Indian higher-and--higher-
technology reactors under safeguard. So, the program is moving 
from unsafeguarded to the middle, where we are now, which is 65 
percent of it's safeguarded, to getting more and more of them 
under safeguard over the next decade or so, where we believe 
it'll be as much as 90 percent of the program.
    Senator Obama.  But even if it's 90 percent--I mean, when 
it--what you've just argued is that as long as the--they've got 
the technology and they've got the material, that they can 
produce as many weapons as they want. What is it that we are 
gaining--specifically?
    Secretary Rice.  You're gaining IAEA access. And this is 
the point that Mohamed ElBaradei made. You're gaining IAEA 
access, to the Indian program, that has not been there in the 
past. You're also getting them to separate. One of the things 
that the IAEA very much likes to see--and, by the way, we went 
through this process, the French went through this process--is 
the separation of military and civilian facilities. It's a very 
important step, to separate those, and to safeguard those. You 
are getting the Indians into a regime where they may be able to 
share in technologies that will produce reactors that do not 
have the high-byproduct nuclear--or nuclear materials----
    Senator Obama.  On the civilian side.
    Secretary Rice  [continuing]. Byproducts on the civilian 
side. That's very important. And let me just say, Senator, I 
think those who concentrate on the strategic program and the 
issue of how much weapons material they have, really that's not 
the point of the Indian strategic program. The Indian strategic 
program, I believe, if you look at the restraint that it has 
demonstrated, is more a factor of the political and military 
factors that they face, in terms of what their other, as they 
would see them, adversaries in the region are doing, what 
military balances they are facing. And that which--is what 
drives the numbers of Indian nuclear weapons, not how much 
material they do or do not have.
    Senator Obama.  Well, if that's the case, why don't they 
put it all under IAEA inspection?
    Secretary Rice.  They want to reserve the possibility, 
given the neighborhood that they live in, and given the----
    Senator Obama.  Yeah.
    Secretary Rice [continuing]. Politics that they have 
engaged in, the politically adversarial relationships that 
they've had in that region, to increase their strategic 
program. But I would, again, note that the restraint has been 
considerable. It remains a relatively small program----
    Senator Obama.  I understand. I guess--I don't mean to 
interrupt you, Madam Secretary, because I'm running out of 
time, and you've got to get going in a minute--my simple point 
is this. I mean, you sort of can't have it both ways. You can't 
say that the--on the one hand, the strategic issues really are 
not relevant here, they're not going to be increasing their 
nuclear stockpiles, there's not serious technology transfer, et 
cetera, et cetera, but it's real important, nevertheless, for 
them to keep these eight uninspected and to remain outside of--
to remain outside the regime.
    Secretary Rice.  Senator, we didn't set out--we discussed, 
initially, but we didn't set out to constrain the strategic 
program in this agreement. There are other things that 
constrain their program, including just the politics and 
military balance of the region. That's really the issue with 
their strategic program.
    What this agreement sets out to do is--in the broad 
framework of U.S./India relations and India's emergence as a 
major power, is to give them relatively unconstrained access to 
civil nuclear power, which we think is a very good thing. They 
do need fuel for their civil nuclear reactors. They don't have 
indigenous supplies that can fuel a civilian program of the 
size that they need to meet their energy needs. Since we think 
meeting their energy needs with civilian power is a good thing, 
we would like to see them have access on the civilian side, but 
that requires IAEA safeguards.
    Senator Obama.  Let's shift gears. I have--I'm out of time, 
but I think you have 2 minutes before you have to leave, and I 
want to see if I can get one more question in.
    Australia signed an agreement with China on Monday to sell 
uranium for use in China's nuclear power plants. When asked 
about possible U.S. opposition to the deal, senior Australian 
official in the Department of Foreign Affairs said that the 
U.S. was, quote, ``hardly in a position to criticize the sale 
of the uranium for peaceful purposes to China after announcing 
that it would seek an exemption from Congress to sell fuel to 
India for its civilian nuclear plants.``
    Pakistan's foreign minister was quoted as saying, quote, 
``Nuclear weapons are the currency of power, and many countries 
would like to use it. Once this goes through, the NPT will be 
finished. It's not just Iran and North Korea. Brazil, 
Argentina, and Pakistan will all think differently.``
    Are you suggesting that there's not going to be any 
consequences, in terms of the NPT regime, and that people's 
basic attitude is that we're now going to, on a case-by-case 
basis, make determinations?
    Secretary Rice.  Well, first of all, I think you have to 
take those each separately. In Australia, yes, they're going to 
sell uranium to China. We have civil nuclear cooperation with 
China. China is a member of the Nuclear Suppliers Group, a 
member of the NPT. I don't think we have, in fact, criticized 
this deal. And Prime Minister Howard has made clear that he 
thinks the U.S./India civil nuclear deal is a good deal.
    As to what the Pakistani foreign minister said, we were in 
Pakistan shortly after this deal was announced. The Pakistanis 
understand their special circumstances----
    Senator Obama.  Well, but because we have enough leverage 
on them at the moment, but we--
    Secretary Rice.  Well----
    Senator Obama [continuing]. We may not, always.
    Secretary Rice.  Well, but they also understand that they 
have a particular history that they're trying to overcome with 
the international system.
    No, Senator, I really don't think that it is going to have 
an effect on the--on people's willingness to adhere to the NPT, 
or not.
    Senator Obama.  So, you think the NPT remains the----
    Secretary Rice.  I----
    Senator Obama [continuing]. This will have no impact on NPT 
or the Suppliers Group.
    Secretary Rice.  I think that, if anything, what it does is 
to broaden the nonproliferation regime to include what has been 
one huge anomaly out there, which is an India that is not an 
NPT member, but has been in substantial compliance with NPT 
standards, that has been a responsible party. And that takes 
care of an anomaly. And, again, I think it's why the guardian 
of the NPT and the regime, Dr. ElBaradei, has been so 
supportive of this.
    We have to find a way to modernize the nonproliferation 
regime. And that means keeping the NPT strong, but it also 
means dealing with anomalies. It means issues like assured fuel 
supply that countries that forgo--for countries that forgo 
enrichment and reprocessing. It's a broader regime than just 
the NPT. And dealing with the anomaly of India, I think, in 
fact, will strengthen that broader regime.
    Senator Obama.  Unless other countries decide they want 
their own anomalies.
    Secretary Rice.  Well, we haven't seen----
    Senator Obama  [continuing]. If this is an anomaly, China 
may have other views in terms of what constitutes an anomaly--
such as Pakistan.
    Secretary Rice.  Of course we will resist those, but I will 
just say that this is a deal that is broadly--people are 
broadly in agreement with who are very concerned about 
nonproliferation.
    Senator Obama.  Thank you, Mr. Chairman, for your 
forbearance.
    Thank you, Madam Secretary.
    The Chairman. Thank you, Senator Obama.
    Secretary Rice.  Thank you.
    The Chairman. And, Senator Boxer, I understand you have a 
request.
    Senator Boxer.  I do. And I thank you.
    I would ask unanimous consent to place the following 
documents in the record: an article from the Washington Post on 
March 21 in which Senator--former Senator Sam Nunn says, 
``India was a lot better negotiator than we were``; the Los 
Angeles Times editorial that I referred to, dated March 1; the 
article in Defense News entitled ``India Navy Trains Iranian 
Sailors.'' We did contact the editors there, and they stand by 
their story. But we will continue to speak with them.
    And then, just--this is important. I think that the 
Secretary just said that the people in the nonproliferation 
community support this. Well, we already know that Senator Nunn 
told us to please work on changing this deal. And we also know 
that we got a letter--the Senators did--from 16 people in--who 
are very well-known experts--a couple from Stanford, by the 
way--who really worry about this very much. At the bottom line, 
they say, ``India's commitment under the current terms of this 
arrangement do not justify making far-reaching exceptions to 
U.S. law.''
    And then, lastly, you'll be happy to know, Mr. Chairman, is 
an article from today's USA Today in which, ``In 2004, the 
State Department sanctioned an Indian scientist because he said 
that the Indian scientist was giving Iran information about 
tritium.'' And this, again, is a troubling link between India 
and Iran.
    And so, I'd like to place all these in the record.
    And I thank you.
    The Chairman. That's fine. We'll place them in the record.
    [The information previously referred to appears in the 
Appendix to this hearing.]
    Secretary Rice.  Senator, I need to respond to the last 
point, however, for the record.
    The Chairman. Please respond.
    Secretary Rice.  Yes, for the record.
    First of all, Senator, I think I was talking about Mr. 
ElBaradei when I talked about people who were in support. That 
was the lineage of the question.
    But, secondly, on the Indian scientist that the Senator 
cites, under our law there was a violation, and we raised that 
with the Indian Government. They investigated it. I would note 
that under their new law, the 2005 law, we believe that this 
kind of activity would, indeed, be illegal under Indian law. 
And so, I would just make the point that it's just another 
example of the Indians moving further into compliance with laws 
that, frankly, we would like to see a lot of other states have.
    Senator Boxer.  Well, I'd say to the Secretary, that's very 
good news. If you could provide me with the law and your 
analysis of it. Because this was our own State Department, in 
'04, sanctioning an Indian scientist. But----
    Secretary Rice.  I----
    Senator Boxer  [continuing]. But we know what happened in 
Pakistan with Dr. Khan, so we need to be sure. But what you're 
telling me is good news, and I'd like to see that in writing.
    Secretary Rice.  Absolutely. We'll get that----
    Senator Boxer.  Thank you.
    Secretary Rice [continuing]. For you, Senator.
    Senator Boxer.  Thank you.
    Secretary Rice.  It's a 2005 law. We will do that.
    Senator Boxer.  Thank you, Madam Secretary.
    The Chairman. Thank you, Senator Boxer.
    Madam Secretary, let me just mention that to the extent 
that you or your colleagues can supplement our information 
about the total energy picture, including climate change, and 
various other aspects that arose, that would be helpful.
    The Chairman. Likewise, we've heard much about the NPT and 
the Suppliers Group. You've made a good number of points as to 
how they're enhanced, but this is an area of concern for many 
of us.
    Third, the Iranian issues, how they sort out. We could have 
several hearings on Iran itself, but, still, this is the world 
in which we live, to the extent to which those issues can be 
addressed.
    The Chairman. And, finally, the issue of congressional 
oversight, assurances of how the administration plans to work 
with the Congress so that fears that this committee or others 
might be overlooked might be assuaged.

    [The information previously referred to appears in the 
appendix to this hearing.]

    Secretary Rice.  Thank you very much, Mr. Chairman.
    The Chairman. And thank you, so much, for your testimony.
    Secretary Rice. We will respond.
    Secretary Rice.  Thank you very much.
    The Chairman. The hearing is adjourned.

    [Whereupon, at 12:05 p.m., the hearing was adjourned.]


                                APPENDIX

                              ----------                              



 Questions for the Record Submitted to Secretary of State Condoleezza 
                  Rice by Senator Lugar, April 5, 2006

                     the president's visit to india
    Question (1)(a). Secretary Rice, during the course of the 
President's visit to India, and afterward, U.S. officials commented 
that some 18 agreements were reached with India regarding cooperation 
in a host of spheres.

    With regard to each such agreement, could you furnish the committee 
with the text of those agreements, if texts exist?

    Answer. The relevant documents pertaining to the 18 initiatives 
undertaken during the President's visit to India are the March 2 Joint 
Statement, as issued by President Bush and Prime Minister Singh, as 
well as more detailed Fact Sheets released by the State Department. 
These documents are included with this package.
    In addition, the 18 initiatives are outlined on the attached list 
of official deliverables for the President's visit.


    Question (1)(b). Secretary Rice, during the course of the 
President's visit to India, and afterward, U.S. officials commented 
that some 18 agreements were reached with India regarding cooperation 
in a host of spheres.
    Was anything signed by the President while he was in India?

    Answer. As these initiatives are not formal agreements or treaties, 
but rather political commitments that both sides have undertaken, 
nothing was signed by the President while he was in India.


    Question (1)(c). Secretary Rice, during the course of the 
President's visit to India, and afterward, U.S. officials commented 
that some 18 agreements were reached with India regarding cooperation 
in a host of spheres.
    Would any of these understandings require Congressional involvement 
through statutory amendments?

    Answer. Only the Civil Nuclear Cooperation Initiative requires 
legislative changes. As they are currently structured, none of the 
other initiatives that we have undertaken with the Indian government 
will require such changes.

                       the indian separation plan
    Question (1). Secretary Rice, how will the safeguards applied to 
India's declared sites, facilities, locations and materials, verify 
that no activities of a military nature are being carried out at any 
such site, facility or location or with any such materials?

    Answer. This Initiative will only allow for nuclear cooperation to 
proceed with civil facilities and programs that are safeguarded by the 
IAEA. The Government of India has agreed that these safeguards will be 
in place in perpetuity. Under the Initiative, India has committed to 
place all its current and future civil nuclear facilities under IAEA 
safeguards, including monitoring and inspections. These procedures are 
designed to detect--and thereby prevent--the diversion to military use 
of any nuclear materials, technologies, or equipment provided to 
India's civil nuclear facilities. India has also committed to sign and 
adhere to an Additional Protocol, which provides for even broader IAEA 
access to facilities and information regarding nuclear related 
activities.


    Question (2). The Separation Plan tabled by the Indian Government 
with its Parliament states nothing about the future bureaucratic 
structure of its Department of Atomic Energy (DAE) in respect of 
removing from that organization any personnel involved in any military 
activities. To what extent will DAE personnel working at any declared 
sites, facilities and locations continue to have access to military 
programs in India?

    Answer. In the July 18, 2005 Joint Statement and under India's 
March 2, 2006 separation plan, the Government of India committed to 
separate its civil and military facilities and programs. While the 
specific issue of DAE personnel has not yet been discussed in detail, 
we would consider routine, frequent rotation of personnel between civil 
and military programs as being inconsistent with Indian commitments on 
separation. In our view, such a rotation would be inconsistent with 
India's commitment to identify and separate its civil and military 
nuclear facilities and programs. We have made this position clear to 
the Indian government.


    Question (3). According to India's Implementation Document, 
facilities were excluded from the civilian list if they were located in 
a larger hub of strategic significance (e.g., BARC), even if they were 
not normally engaged in activities of strategic significance. Moreover, 
the document noted that reactors would be connected to the electricity 
grid ``irrespective of whether the reactor concerned is civilian or not 
civilian.''

          (a) Do these two positions of India's negatively affect the 
        extent of separation of civilian and military nuclear 
        facilities in India?

          (b) Which facilities (or how many) not engaged in strategic 
        activities were left off the civilian list because they were 
        located in a larger hub of strategic significance?

          (c) How many of India's existing eight indigenous PHWRs that 
        are declared as military reactors will remain connected to the 
        electricity grid?

    Answer. India's positions on these issues do not negatively affect 
the extent of separation of civil and military nuclear facilities. The 
number of facilities declared civil by the Indian government is 
unrelated to its ability to achieve an effective separation and to 
place those facilities under safeguards. Regardless of whether they 
might be used to generate electric power or not, reactors that are not 
declared civil, and thus are not under IAEA safeguards, cannot 
legitimately receive nuclear fuel or other nuclear cooperation from any 
State party to the NPT.
    India has committed to providing a declaration to the IAEA of its 
civil nuclear program; it has not publicly committed to filing such a 
declaration with respect to its strategic facilities. As such, India 
may chose not to provide to the IAEA information to answer subpoints 
(b) and (c).


    Question (4). Will Indian officials involved in India's strategic 
programs have access to India's declared civilian sites, facilities, 
locations and materials?

    Answer. In the July 18, 2005 Joint Statement and as provided for 
under the March 2, 2006 separation plan, India committed to separate 
its civil and military facilities and programs. We would consider the 
term ``programs'' to include both program-related activities and the 
personnel involved in those activities. Routine rotation of personnel 
between civil and military programs would be inconsistent with Indian 
commitments on civil-military separation.


    Question (5)(a). Under Secretary of State for Arms Control and 
International Security Robert Joseph told members of the committee on 
November 2, 2005, that India's separation of facilities must be 
credible, transparent, meaningful, and defensible from a 
nonproliferation standpoint. He also told members that a separation 
plan and resultant safeguards must contribute to U.S. nonproliferation 
goals.
    Please describe in detail the criteria U.S. officials used for 
determining that India's Separation Plan is credible; transparent; 
meaningful; and defensible from a nonproliferation standpoint; and, . . .


    Answer. The criteria were based on the totality of India's 
separation plan and its commitment on future civil facilities. For the 
plan to be transparent, it had to be articulated publicly, which it has 
been. For it to be credible and defensible from a nonproliferation 
standpoint, it had to capture more than just a token number of Indian 
nuclear facilities, which it did by encompassing nearly two-thirds of 
India's current and planned thermal power reactors as well as all 
future civil thermal and breeder reactors. Importantly, for the 
safeguards to be meaningful, India had to commit to apply IAEA 
safeguards in perpetuity; it did so. Once a reactor is under IAEA 
safeguards, those safeguards will remain there permanently and on an 
unconditional basis. Further, in our view, the plan also needed to 
include upstream and downstream facilities associated with the 
safeguarded reactors to provide a true separation of civil and military 
programs. India committed to these steps, and we have concluded that 
its separation plan meets the criteria established: it is credible, 
transparent, and defensible from a nonproliferation standpoint.


    Question (5)(b). Under Secretary of State for Arms Control and 
International Security Robert Joseph told members of the committee on 
November 2, 2005, that India's separation of facilities must be 
credible, transparent, meaningful, and defensible from a 
nonproliferation standpoint. He also told members that a separation 
plan and resultant safeguards must contribute to U.S. nonproliferation 
goals.
    Please describe the U.S. nonproliferation goals to which the 
separation plan and resultant safeguards contribute, including where 
those nonproliferation goals are articulated (e.g., the 2002 National 
Strategy to Combat Weapons of Mass Destruction or the President's 2004 
NDU speech).

    Answer. The Civil Nuclear Cooperation Initiative contributes to 
U.S. nonproliferation goals and represents a net gain for 
nonproliferation because it will, once implemented, more closely align 
India with the international nonproliferation mainstream than at any 
previous time. India has pledged to submit its civil nuclear program to 
international inspection and take on significant new nonproliferation 
commitments in exchange for full civil nuclear cooperation with the 
international community.
    As Under Secretary Joseph testified in November, there is no viable 
cookie-cutter approach to nonproliferation; we need tailored approaches 
that solve real-world problems. This has been a premise of 
administration policy since the outset of President Bush's first term, 
in which he established nonproliferation and counter-proliferation as 
top national security priorities.
    The Civil Nuclear Cooperation Initiative is one such approach. It 
is consistent with the 2002 National Strategy to Combat Weapons of Mass 
Destruction which noted, with an eye to ``strengthening'' 
nonproliferation, that ``[c]onsistent with other policy priorities, we 
will promote new agreements and arrangements that serve our 
nonproliferation goals.'' This strategy, inter alia, underscored that 
the United States will support existing nonproliferation regimes and 
work to improve the effectiveness of, and compliance with, those 
regimes. The nonproliferation-related commitments India has made serve 
to strengthen the international regime.
    In this context, India's commitments also advance key efforts 
contained in President Bush's 2004 National Defense University speech. 
In particular, as part of this Initiative, India committed to conclude 
an Additional Protocol. It also committed to refrain from transfers of 
enrichment and reprocessing technology to countries that do not already 
have those capabilities, and to support international efforts to limit 
their spread. Moreover, India's implementation of its enhanced export 
controls and of its acceptance of IAEA safeguards will contribute to 
fulfillment of the objectives of UN Security Council Resolution 1540.


    Question (6)(a). Secretary Rice, in November 2005, U/S Joseph 
stated that ``We have sought India's curtailment of fissile material 
production but have not reached agreement on this issue.'' Prior to the 
President's March visit to India, experts who testified before Congress 
stated that they believed you were seeking to ensure that India's 
breeder reactors were placed under safeguards in order to establish an 
``effective'' but not explicit cap on Indian fissile materials 
production.
    Since no breeder reactor, electric or thermal, was declared 
civilian and placed under safeguards in India's March 7, 2006, 
Separation Plan, do you believe that the administration's proposal for 
atomic energy cooperation with India could still constitute an 
``effective cap'' on Indian fissile materials production?

    Answer. As I testified on April 5, 2006, the ``Initiative does not 
cap India's nuclear weapons production, but nothing under this 
Initiative will directly enhance its military capability or add to its 
military stockpile.''
    The United States successfully obtained India's commitment to work 
toward the conclusion of a multilateral Fissile Material Cutoff Treaty 
(FMCT). We continue to call on all states that produce fissile material 
for weapons purposes to observe a voluntary production moratorium, as 
the United States has done for many years. Moreover, we also remain 
willing to explore other intermediate objectives that might also serve 
such an objective. Finally, as part of our discussions with both India 
and Pakistan, we continue to encourage strategic restraint.


    Question (6)(b). Secretary Rice, in November 2005, U/S Joseph 
stated that ``We have sought India's curtailment of fissile material 
production but have not reached agreement on this issue.'' Prior to the 
President's March visit to India, experts who testified before Congress 
stated that they believed you were seeking to ensure that India's 
breeder reactors were placed under safeguards in order to establish an 
``effective'' but not explicit cap on Indian fissile materials 
production.
    What reason did India give for not declaring its extant 40 MWth 
Fast Breeder Test Reactor (FBTR) to be civilian?

    Answer. We cannot speak for the Government of India, of course, but 
in our discussions Indian officials argued that since the FBTR was 
still in the experimental stage, India not in a position to accept 
safeguards on the reactor at this time.


    Question (6)(c). Secretary Rice, in November 2005, U/S Joseph 
stated that ``We have sought India's curtailment of fissile material 
production but have not reached agreement on this issue.'' Prior to the 
President's March visit to India, experts who testified before Congress 
stated that they believed you were seeking to ensure that India's 
breeder reactors were placed under safeguards in order to establish an 
``effective'' but not explicit cap on Indian fissile materials 
production.
    What reason did India give for not declaring the 500 MWe fast 
breeder reactor it currently has under construction to be part of its 
civilian program?

    Answer. The reactor is not yet complete. India stated that it was 
not in a position to place reactors which it considers experimental 
under safeguards. India committed to placing all future civil power and 
breeder reactors under safeguards.


    Question (6)(d). Secretary Rice, in November 2005, U/S Joseph 
stated that ``We have sought India's curtailment of fissile material 
production but have not reached agreement on this issue.'' Prior to the 
President's March visit to India, experts who testified before Congress 
stated that they believed you were seeking to ensure that India's 
breeder reactors were placed under safeguards in order to establish an 
``effective'' but not explicit cap on Indian fissile materials 
production.
    Why does the IAEA list the prototype fast breeder reactor as a 
civilian power reactor in its Power Reactor Information System 
database?

    Answer. We cannot speak for the IAEA. We note, however, that this 
may be a matter of semantics. Breeder reactors are neither 
intrinsically military nor civil. The IAEA's Power Reactor Information 
System is a database of nuclear power plants around the world, whether 
they are under construction, in operation, or shut down. The Prototype 
Fast Breeder Reactor is included in the database, as it could generate 
up to 500 megawatts of electric power. The IAEA's website lists the 
Prototype Fast Breeder Reactor as a ``power plant,'' but not as 
``civil.'' The IAEA's characterization would have no legal bearing, in 
any case, on India's decision on how it chooses to characterize the 
reactor for purposes of its separation plan.


    Question (6)(e). Secretary Rice, in November 2005, U/S Joseph 
stated that ``We have sought India's curtailment of fissile material 
production but have not reached agreement on this issue.'' Prior to the 
President's March visit to India, experts who testified before Congress 
stated that they believed you were seeking to ensure that India's 
breeder reactors were placed under safeguards in order to establish an 
``effective'' but not explicit cap on Indian fissile materials 
production.
    How many breeder reactors, and of which type, does India plan to 
build in the future?

    Answer. We cannot speak for the Government of India, of course, but 
in our discussions Indian officials indicated that they may build an 
additional four breeder reactors. India committed, in its separation 
plan of March 2006, to place under IAEA safeguards all future civil 
breeder and civil thermal reactors. While India retains the sovereign 
right to determine whether future indigenous reactors serve a civil or 
military function--as it does today--neither we nor our international 
partners will cooperate with non-civil or non-safeguarded facilities. 
As such, all externally-supplied reactors and other controlled 
technologies will necessarily be civil and subject to IAEA safeguards.


           nuclear suppliers group (nsg) guidelines proposal
    Question (1). A publicly-available version of the Department's 
draft NSG decision, which was circulated at the NSG Experts Meeting in 
Vienna, Austria, last March, states

          Notwithstanding paragraphs 4(a), 4(b), and 4(c), of INFCIRC/
        254/Part 1 as revised, Participating Governments may transfer 
        trigger list items and/or related technology to the safeguarded 
        civil nuclear facilities in India (a State not party, and never 
        having been a party, to the NPT) as long as the participating 
        Government intending to make the transfer is satisfied that 
        India continues to fully meet all of the aforementioned 
        nonproliferation and safeguards commitments, and all other 
        requirements of the NSG Guidelines.

    Does the notwithstanding of paragraphs 4(a), 4(b) and 4(c) of 
INFCIRC/254 Part I mean that as long as any Participating Government of 
the NSG is satisfied that India is meeting the criteria in the 
administration's proposed language, they can export any trigger list 
items they wish to India?

    Answer. The administration's proposed language envisions that, 
after a consensus decision is reached by the NSG to accommodate civil 
nuclear cooperation with India, it will be up to each supplier to 
satisfy itself that India is continuing to meet its various 
nonproliferation and safeguards commitments. If a supplier has a 
concern that the criteria are not being met, that supplier would be 
expected to raise the issue in the NSG. In addition, the other 
provisions of the NSG Guidelines would continue to apply, and NSG 
Participating Governments would need to take those into account in 
considering any possible Trigger List exports.


    Question (2). What consultation would apply before such exports 
would be made by Participating Governments, either bilaterally or 
within the NSG?

    Answer. The NSG Guidelines call for consultations among 
Participating Governments as appropriate in certain circumstances, 
either on a bilateral or multilateral basis, regarding implementation 
of the Guidelines and specifically in ``sensitive cases.''


    Question (3). What are the ``other requirements'' of the NSG 
Guidelines that would apply to India that are referenced in the draft 
decision?

    Answer. The exception we have discussed relates to the full-scope 
safeguards requirement of the NSG Guidelines. Transfers to India would 
still have to meet all the other requirements of the NSG Guidelines, 
including:

   Formal recipient government assurances ``explicitly 
        excluding uses of any nuclear transfer which would result in 
        any nuclear explosive device'';

   Effective physical protection of all nuclear materials and 
        facilities to prevent unauthorized use and handling;

   Transfer of trigger list items or related technology only 
        when covered by IAEA safeguards, with duration and coverage 
        provisions in conformity with IAEA document GOV/1621 (i.e., 
        safeguards in perpetuity);

   Restraint in transferring to India sensitive facilities, 
        technology, and material usable for nuclear weapons or other 
        nuclear explosive devices (including enrichment and 
        reprocessing facilities, equipment or technology);

   Government assurances that any retransfer of a Trigger List 
        item or any item derived from the transferred Trigger List item 
        would be subject to the same conditions and assurances as the 
        original transfer.


    Question (4). What information does the administration have 
regarding the views of the Russian Federation and the People's Republic 
of China concerning the draft NSG decision?

    Answer. The Russian Government supports the Initiative. China has 
not yet declared a formal position. Since NSG deliberations are 
generally of a confidential nature, we would be happy to brief the 
committee in more detail in an appropriate setting on our discussions 
with NSG partners, including the Russian Federation and the People's 
Republic of China, regarding the U.S. proposal to accommodate civil 
nuclear cooperation with India.


    Question (5). Do you anticipate that China might seek additional 
reactor exports to Pakistan as a result of the US-Indian nuclear 
initiative and the proposed exception to the NSG Guidelines you are 
seeking for India?

    Answer. While occasional news articles have speculated in this 
respect, we are not aware at this time of any plans on the part of 
China to seek additional reactor exports to Pakistan.
    China became a party to the Nuclear Non-Proliferation Treaty in 
1992; it is obligated under Article I not in any way to assist, 
encourage, or induce any non-nuclear-weapon state to manufacture or 
acquire nuclear weapons. China pledged in 1996 not to provide 
assistance to any unsafeguarded nuclear facilities in any country. As 
part of its joining the Nuclear Suppliers Group (NSG) in 2004, China 
disclosed its intention to continue cooperation with Pakistan under the 
grandfathering exception to the NSG Guideline provisions requiring 
full-scope safeguards as a condition of nuclear supply. This 
cooperation would include life-time support and fuel supply for the 
safeguarded Chasma I and II nuclear power plants, supply of heavy water 
and operational safety service to the safeguarded Karachi nuclear power 
plant, and supply of fuel and operational safety service to the two 
safeguarded research reactors at PINSTECH. As a member of the NSG, 
China has pledged--and is expected--to abide by the NSG Guidelines on 
the transfers of nuclear equipment, technology, and material.
    If China did seek to provide additional reactors to Pakistan, it 
would need NSG accommodation. The NSG operates by consensus, so China 
would need the support of all other participating governments to 
proceed. We do not believe that the 45 member states of the Nuclear 
Suppliers Group would agree to such an accommodation, and we do not 
support such an initiative with Pakistan.


                 enrichment and reprocessing technology
    Question (1). Secretary Rice, the administration has been rightly 
concerned about the proliferation of enrichment and reprocessing 
technology. The President's February 2004 NDU speech demonstrated the 
high priority he places on this issue.
    India, as part of its Joint Statement commitments, has stated that 
it supports ``international efforts to prevent the spread of enrichment 
and reprocessing technology''.
    Will India not export enrichment and reprocessing technology to any 
state without a functioning, full-scale enrichment or reprocessing 
capability?

    Answer. As part of the U.S.-India Civil Nuclear Cooperation 
Initiative, India has committed to refrain from the transfer of 
enrichment and reprocessing technology to states that do not already 
have them. India also committed to support international efforts to 
limit the spread of these technologies.


    Question (2). Why does the draft NSG decision circulated last month 
not limit the export of enrichment and reprocessing technology to 
India?--Have all NSG Participating Governments already agreed not to 
transfer enrichment, reprocessing and related technology to India, in 
particular the Russian Federation?

    Answer. The transfer of enrichment and reprocessing equipment and 
technology is already addressed in the NSG Guidelines, INFCIRC/254/
Rev.7/Part 1. Therefore, it was not deemed necessary for the proposed 
resolution to also address the matter. In this context, we have also 
indicated to our NSG partners that we do not intend to supply 
enrichment and reprocessing technologies. Our bilateral agreement for 
peaceful nuclear cooperation will not permit such transfers to be made 
under it.
    There has been no discussion of possible transfers of enrichment 
and reprocessing technology to India or any Indian requests for such 
technology. NSG Participating Governments have made clear that they 
currently are not contemplating any new transfers of enrichment and 
reprocessing and in fact have been considering strengthening controls 
over such transfers.


                  additional nonproliferation measures
    Question (1)(a)/(b). Secretary Rice, in November 2005, U/S Joseph 
stated that ``In our ongoing dialogues, we strongly encourage India to 
take additional steps to strengthen nonproliferation, such as joining 
PSI, and harmonizing its national control lists with those of the 
Australia Group [AG] and the Wassenaar Arrangement [WA].''
    On December 30, 2005, the administration sanctioned Sabero Organic 
Chemicals Gujarat Limited of India and Sandhya Organic Chemicals PVT 
Limited, also of India, under the authority of the Iran and Syria 
Nonproliferation Act of 2000 (PL 106-178) for the transfer to Iran of 
equipment and technology on the Australia Group list.\1\
---------------------------------------------------------------------------
    \1\ 70 FR 77441.
---------------------------------------------------------------------------
    (a) What is the status of India's consideration of PSI membership?

    (b) What are the policy and legal reasons India has given for not 
becoming a PSI participant?

    Answer. India has stated that its participation remains under 
consideration.
    India committed in 2005 to participate in the PSI if it was able to 
join the Core Group of PSI participants that had developed and agreed 
to the PSI Statement of Principles, or if the Core Group was disbanded. 
In the summer of 2005, the United States and its partners in the Core 
Group agreed that the Core Group had served an important function in 
the process of starting up the PSI, but was no longer necessary and so 
was disbanded.
    More recently, India has linked its decision on PSI participation 
to its concerns with recently agreed amendments to the Convention on 
the Suppression of Unlawful Acts at Sea (the SUA Convention).
    The United States position is that endorsement of the PSI Statement 
of Interdiction Principles is a political commitment carrying no legal 
rights or obligations. Therefore, the United States does not accept 
India's linkage of the SUA Convention to the PSI. As the PSI is a 
voluntary initiative, India is free to choose to participate or not 
participate. We continue to discuss this issue with India and encourage 
India's participation.


    Question (1)(c). Secretary Rice, in November 2005, U/S Joseph 
stated that ``In our ongoing dialogues, we strongly encourage India to 
take additional steps to strengthen nonproliferation, such as joining 
PSI, and harmonizing its national control lists with those of the 
Australia Group [AG] and the Wassenaar Arrangement [WA].''
    On December 30, 2005, the administration sanctioned Sabero Organic 
Chemicals Gujarat Limited of India and Sandhya Organic Chemicals PVT 
Limited, also of India, under the authority of the Iran and Syria 
Nonproliferation Act of 2000 (PL 106-178) for the transfer to Iran of 
equipment and technology on the Australia Group list.\2\
---------------------------------------------------------------------------
    \2\ 70 FR 77441.
---------------------------------------------------------------------------
    (c) Has India decided to become an adherent to either the WA or the 
AG (including through harmonizing its export control lists with those 
of the AG and the WA), and if so, will India announce this decision 
publicly, and if not, what are India's legal and policy reasons for not 
joining or adhering to them?

    Answer. We have discussed with India the importance of it 
harmonizing its control lists with those of the Australia Group and 
Wassenaar Arrangement. To date, we have not received an official 
announcement by the Indian Government of a decision to harmonize its 
control lists or to unilaterally adhere to these regimes. We continue 
to discuss these issues with the Indian Government in the context of 
our bilateral discussions.


    Question (1)(d).  Secretary Rice, in November 2005, U/S Joseph 
stated that ``In our ongoing dialogues, we strongly encourage India to 
take additional steps to strengthen nonproliferation, such as joining 
PSI, and harmonizing its national control lists with those of the 
Australia Group [AG] and the Wassenaar Arrangement [WA].''
    On December 30, 2005, the administration sanctioned Sabero Organic 
Chemicals Gujarat Limited of India and Sandhya Organic Chemicals PVT 
Limited, also of India, under the authority of the Iran and Syria 
Nonproliferation Act of 2000 (PL 106-178) for the transfer to Iran of 
equipment and technology on the Australia Group list.\3\
---------------------------------------------------------------------------
    \3\ 70 FR 77441.
---------------------------------------------------------------------------
    Why will India not adopt controls on items on the control list of 
the AG?
    Answer. India has long argued that it has sufficient controls since 
its national export control list--the Special Chemicals, Organisms, 
Materials, Equipment and Technologies (SCOMET) List--is in line with 
the standards of the Chemical Weapons Convention (CWC), to which India 
is a party. We have discussed with India the importance of controlling 
the full range of chemicals, agents, toxins, and equipment in line with 
the Australia Group (AG).


    Question (2). Does India's adherence to the Missile Technology 
Control Regime (MTCR) mean that it will be considered an ``adherent'' 
for purposes of section 73 of the Arms Export Control Act, such that 
U.S. missile sanctions would generally not apply in the future to India 
or to countries which sell missile technology to India?

    Answer. India would not be considered an ``MTCR Adherent'' as 
defined under Section 73 of the Arms Export Control Act (also referred 
to as the missile sanctions law). Rather, as part of this Initiative, 
India has committed to unilaterally adhere to the Missile Technology 
Control Regime (MTCR) Guidelines. The missile sanctions law would 
generally still apply to a ``unilateral adherent'' to the MTCR.
    Unilateral adherence to the MTCR Guidelines means that a country 
makes a unilateral political commitment to abide by the Guidelines and 
Annex of the MTCR. In particular, an MTCR unilateral adherent commits 
to control exports of missile-related equipment and technology 
according the MTCR Guidelines, including any subsequent changes to the 
MTCR Guidelines and Annex. Inter alia, this means that MTCR unilateral 
adherent countries need to have in place laws and regulations that 
permit them to control the export of MTCR Annex equipment and 
technology consistent with the MTCR Guidelines.An ``MTCR Adherent'' is 
a specially defined status in terms of Section 73 of the Arms Export 
Control Act (also referred to as the missile sanctions law). An ``MTCR 
Adherent,'' as defined in Section 73 of the missile sanctions law, is a 
country that ``participates'' in the MTCR or that, ``pursuant to an 
international understanding to which the United States is a party, 
controls MTCR equipment and technology in accordance with the criteria 
and standards set forth in the MTCR.'' India's ``unilateral adherence'' 
to the MTCR would not meet this requirement.


                        the legislative proposal
    Question (1). Secretary Rice, in November 2005, U/S Joseph stated 
that ``the administration prefers stand-alone, India-specific 
legislation, but could envision alternatives as well.'' What would be 
some of the alternatives you would envision if they were not specific 
to India?

    Answer. At the time Under Secretary Joseph testified, the 
administration had also considered alternatives that were criteria-
based or that amended the Atomic Energy Act more broadly. Based on our 
assessment, and following consultations with Congress, we believe that 
the India-specific approach embodied in S.2429 would be most 
appropriate.


    Question (2). Why did the administration decide to ask Congress to 
except India from certain provisions of the Atomic Energy Act of 1954 
(AEA) instead of using the existing authority to exempt a future 
Peaceful Nuclear Cooperative Agreement with India from the requirements 
of section 123.a (1)-(9) of the AEA?
    Answer. The objectives of the legislation include (1) to be able to 
treat nuclear cooperation with India similar to nuclear cooperation 
with various other trading partners and (2) to bring Congress into the 
process at the front end rather than only at the back end.
    To achieve the first objective, we are seeking a change to Section 
128 so that future nuclear exports to India will not be subject to 
annual congressional review. Without the change, this provision would 
risk disrupting nuclear commerce with India and, in addition, might put 
U.S. exporters at a competitive disadvantage.
    The second objective takes into account the difficulty of putting 
into place all the pieces necessary for U.S.-India nuclear 
cooperation--particularly, the U.S.-India agreement for peaceful 
nuclear cooperation, the India-IAEA Safeguards Agreement, and Nuclear 
Suppliers Group action to accommodate nuclear trade with India--without 
knowing whether Congress, in the end, would support the Initiative and 
vote affirmatively to approve the agreement for peaceful nuclear 
cooperation. We believe it is important that Congress participate as a 
partner early in the process.
    An additional factor involves the exception/waiver standard under 
Sections 123, 128, and 129 of the AEA. The existing standard is a 
determination by the Executive Branch that failure to make the proposed 
exception/waiver would be ``seriously prejudicial to the achievement of 
United States nonproliferation objectives or otherwise jeopardize the 
common defense and security.'' In our view, the decision to facilitate 
nuclear cooperation with India should be based instead on the 
nonproliferation measures that India committed to in the Joint 
Statement, which are reflected in the required Presidential 
determination under subsection 1(b) of S. 2429.


    Question (3). Why did the administration decide to ask Congress to 
allow the President to waive the application of sections 128 and 129 of 
AEA with respect to India instead of using the existing waiver 
authorities available to the President in both sections 128 and 129?

    Answer. As noted in the previous answer, Section 128 would require 
congressional review of the first license in each 12-month period after 
waiver of the full-scope safeguards requirement of that Section; India 
would not be on the same footing as other cooperative partners, and 
U.S. exporters to India could be disadvantaged.
    Also as noted in the previous answer, we believe that waivers under 
Sections 128 and 129 should be based on the India-specific 
determination in subsection 1(b) of S. 2429 rather than on the generic 
standard in current law.


    Question (4). Please explain how any license under 10 CFR Part 110 
and 10 CFR Part 810 would be considered, evaluated, coordinated, and, 
if applicable, reported to Congress under existing law and under the 
administration's proposed amendment to the AEA for India (as introduced 
in S. 2429) with respect to exports to India.

    Answer. The Nuclear Regulatory Commission (NRC) transmits 
applications for exports of nuclear facilities and for the initial 
exports of source or special nuclear material for use as reactor fuel 
under 10 CFR Part 110 to the Department of State, which is responsible 
for coordinating Executive Branch Agency (Departments of Commerce, 
Defense, Energy, and State) reviews of such applications in accordance 
with the Procedures Established Pursuant to the Nuclear Non-
Proliferation Act of 1978, originally published in the Federal Register 
June 7, 1978, and subsequently amended (the ``Procedures''). The 
Executive Branch is asked to provide the NRC with its judgment as to 
whether the proposed export would be inimical to the ``common defense 
and security,'' to confirm that the proposed export will be subject to 
the terms of an agreement for peaceful nuclear cooperation, and to 
address the extent to which the applicable export criteria in Section 
110.42 are met, as well as the extent to which the recipient country or 
group of countries has adhered to the provisions of the applicable 
agreement for peaceful nuclear cooperation.
    In reviewing an application for a license to export nuclear 
facilities or materials, the Executive Branch asks the recipient 
government to provide assurances confirming that upon receipt the 
export will be subject to the terms and conditions of a Section 123 
agreement for peaceful nuclear cooperation between the U.S. and the 
recipient country, the ultimate consignee and any intermediate 
consignee identified in the license application are authorized to 
receive the export, and appropriate physical security measures will be 
applied to protect the export.
    Applications requiring longer than 60 days for Executive Branch 
review would be reported to the Congress in accordance with the 
provisions of Section 126 of the AEA. In addition, Section 1523 of the 
Strom Thurmond National Defense Authorization Act for Fiscal Year 1999, 
as amended, requires the President to notify the Congress of nuclear 
exports to non-NATO countries known to have detonated a nuclear 
explosive device. Non-NATO countries that have detonated nuclear 
explosive devices are: China, India, Pakistan, and Russia. The 
President has delegated this responsibility to the Secretary of State, 
who in turn has delegated the responsibility to the Under Secretary for 
Political Affairs.
    If, after receiving the Executive Branch judgment, the NRC has not 
completed action on a license application within 60 days, it must 
inform the applicant in writing of the reason for delay and, as 
appropriate, provide follow-up reports. The NRC will issue an export 
license if it has been notified by the Department of State that it is 
the judgment of the Executive Branch that the proposed export will not 
be ``inimical to the common defense and security''; and finds, based 
upon a reasonable judgment of the assurances provided and other 
information available to the Federal government, that the applicable 
statutory criteria or their equivalent are met.
    If, after receiving the Executive Branch judgment, the Commission 
does not issue the license requested on a timely basis because it is 
unable to make the statutory determinations required, the Commission 
will publicly issue a decision to that effect and will submit the 
license application to the President. The Commission will deny any 
export license application for which the Executive Branch judgment does 
not recommend approval.
    The proposed legislation would change this process as Section 
110.42(a)(6) currently requires full-scope safeguards as a condition of 
issuing a license for export to a non-nuclear weapon state, unless 
waived by the President, in which case the provisions of Section 128 
regarding congressional review would apply. The proposed legislation 
would allow for NRC-licensed exports to India notwithstanding the 
absence of full-scope safeguards and without triggering the 
congressional review requirements of Section 128. It would also permit 
the issuance of a license notwithstanding the provisions of 10 CFR 
110.46, which would otherwise bar issuance of a license to a country 
found by the President to have detonated a nuclear explosive device, 
unless the President has waived the corresponding provision of Section 
129 of the AEA.
    In accordance with 10 CFR Part 810 and the Procedures, an 
application to the Department of Energy for authorization to transfer 
nuclear technology under 10 CFR 810 (Section 57b of the AEA) may be 
approved by the Secretary of Energy if he determines, with the 
concurrence of the Department of State and after consultation with the 
Departments of Commerce and Defense and the Nuclear Regulatory 
Commission, that the activity will not be inimical to the interests of 
the United States. In making this determination, the Secretary of 
Energy must take into account a number of factors, including: (1) the 
nonproliferation obligations entered into by the recipient government, 
including the NPT and safeguards agreements with the IAEA; (2) whether 
the country has a Section 123 agreement for peaceful nuclear 
cooperation with the U.S.; and (3) recipient government assurances 
confirming no nuclear explosive use and the right of U.S. Government 
prior consent to any retransfer of the technology or items produced 
through the use of that technology.
    One of the factors that the Secretary of Energy is directed to 
consider in determining whether to grant a part 810 authorization is 
whether the recipient country has full-scope safeguards, but that 
criterion is not mandatory for the issuance of an authorization (except 
to the extent required pursuant to Section 128 in the case of sensitive 
nuclear technology). The proposed legislation would not affect 
consideration, evaluation, coordination, or reporting of DOE 
authorizations under 10 CFR part 810 with respect to the range of 
cooperation provided for under the proposed agreement for nuclear 
cooperation. To the extent that an authorization under Part 810 
involved sensitive nuclear technology (SNT), the proposed legislation 
(unlike current law) would not require full-scope safeguards as a 
condition of supply. However, the proposed agreement for peaceful 
nuclear cooperation will not provide for exports of SNT; the agreement 
would have to be amended (and the amendment submitted to Congress for 
review) to allow for such exports.


    Question (5). What effect would S. 2429 have on the requirements of 
sections 126 and 127 of the AEA?

    Answer. Section 126 establishes procedures for licensing nuclear 
exports. Section 127 establishes nuclear export criteria that mirror 
some of the elements required in an agreement for peaceful nuclear 
cooperation under Section 123. The provisions in S.2429 would not alter 
these requirements.


    Question (6). What effect would the provisions of S. 2429 have on 
the Congressional review requirements of section 130 of the AEA?

    Answer. Section 130 establishes the congressional review procedures 
with respect to submissions by the President under Sections 123, 
126a.(2), 126b.(2), 128b., 129, 131a.(3), and 131f.(1)(A). Section 130 
would be affected by the provisions of S. 2429 in that it would not 
apply to Presidential actions with respect to India under Sections 
128b. and 129; the provisions of the proposed legislation would govern. 
(Note that both Section 128b. and Section 129 currently provide for 
congressional disapproval of the President's action by concurrent 
resolution. In view of the Supreme Court's decision in the Chadha case, 
Congress would have to enact new legislation to disapprove the 
President's actions under Sections 128b. and 129; in that sense, the 
situation is the same under current procedures as it would be under S. 
2429.)


    Question (7). What effect would the provisions of S. 2429 have on 
the requirements of section 131 of the AEA?

    Answer. Section 131 establishes the requirements relating to 
subsequent arrangements (as that term is defined in that Section). In 
particular, alterations in form or content--including reprocessing--of 
nuclear material subject to the agreement would require consent through 
a subsequent arrangement. The provisions in S. 2429 would not alter 
these requirements, with one possible exception. Paragraph 131a.(4) 
provides that ``all other statutory requirements under other Sections 
of [the AEA] for the approval or conduct of any arrangement subject to 
this subsection'' must be satisfied before the subsequent arrangement 
may take effect. S. 2429 would affect this provision to the extent that 
it might otherwise require that Sections 123 or 128 (as set forth in 
current law) must be satisfied for a subsequent arrangement with India.


    Question (8). What effect would the provisions of S. 2429 have on 
the preparation of a Nuclear Proliferation Assessment Statement with 
respect to a peaceful nuclear cooperative agreement with India as 
required under section 123 of the AEA?

    Answer. S. 2429 would not affect the requirement for a Nuclear 
Proliferation Assessment Statement nor the preparation thereof.


    Question (9). Under S. 2429, what would trigger termination of 
U.S.-Indian atomic energy cooperation or nuclear exports, and how do 
those circumstances compare with the existing statutory language 
regarding termination of nuclear exports under section 129 0f the AEA?

    Answer. Under S. 2429, detonation of a nuclear explosive device by 
India would render ineffective any Presidential determination there 
under and, accordingly, any waiver of Section 129 of the AEA based on 
such determination. That detonation would also trigger the requirement 
under Section 129(1)(A) to terminate nuclear cooperation with India.S. 
2429 would not change the various grounds in Section 129 that trigger 
the termination of nuclear cooperation with respect to India. It would, 
however, change the standard for waiving the application of the 
sanctions. Under current law, the waiver standard is ``seriously 
prejudicial to the achievement of United States nonproliferation 
objectives or otherwise jeopardize the common defense and security.'' 
Under S. 2429, the standard would be based on the nonproliferation 
measures that India committed to in the Joint Statement as reflected in 
the Presidential determination under subsection 1(b). In addition, as 
noted in the answer to question 6 above, the provisions of Section 129 
and Section 130 regarding congressional review would not apply to a 
waiver under S. 2429.


    Question (10). Would sections 101 and 102 of the Arms Export 
Control Act apply to any agreement for cooperation in atomic energy 
with India under S. 2429, and if so, how?

    Answer. The proposed legislation would not affect the application 
to India of Sections 101 and 102 of the Arms Export Control Act.


    Question (11). Under subsection (d) of S. 2429, what effect would a 
Presidential determination that India has detonated a nuclear explosive 
device after the date of enactment have on--

          (a) nuclear exports by the United States;

          (b) the nuclear cooperation agreement itself; and

          (c) nuclear exports by other states?

    Answer. Nuclear exports from the United States to India would be 
terminated pursuant to Section 129(1)(A), unless waived by the 
President pursuant to the waiver standard in current law. This waiver 
would be subject to congressional review for 60 continuous session 
days.
    The nuclear cooperation agreement would remain in effect as a 
matter of international law. However, as noted above, exports of 
nuclear equipment and material to India under that agreement would be 
prohibited under Section 129; any waiver of Section 129 based on a 
Presidential determination under S. 2429 would no longer be effective. 
The U.S. would also have the right to request the return of any nuclear 
material transferred to India under the terms of the nuclear 
cooperation agreement.
    U.S. law would not affect nuclear exports by other states. Each 
state's response would presumably be governed by the terms of its 
domestic law and international obligations, its agreement for 
cooperation with India, any relevant actions by the NSG (if the state 
were a member), and its own policy judgment.


    Question (12). Under S. 2429, if the President determines that 
India has detonated a nuclear explosive device after the date of its 
enactment, his previous determination regarding the section 123 
agreement between the United States and India under section (1)(b) 
``shall not be effective.'' Do you interpret that language to mean that 
all U.S. licenses for the export to India of any items requiring a 
license under 10 CFR Part 110 and 10 CFR Part 810 would be suspended or 
terminated and that no new licenses would be granted, nor any previous 
licenses renewed, after the determination in section (1)(d) is made?

    Answer. As previously noted, a detonation by India would trigger 
Section 129, which states that ``no nuclear materials and equipment or 
sensitive nuclear technology shall be exported to . . . any non-nuclear 
weapon state that is found by the President to have . . . detonated a 
nuclear explosive device'' (emphasis added). This prohibition on 
exports of ``nuclear materials and equipment'' and ``sensitive nuclear 
technology'' would necessitate suspension or revocation of NRC licenses 
and DOE authorizations (under 10 CFR Part 110 and 10 CFR Part 810, 
respectively) to the extent that the licenses or authorizations 
involved such exports (unless the authorized activity had already taken 
place).
    The term ``nuclear materials and equipment'' is defined in the 
Nuclear Nonproliferation Act of 1978 (P.L. 95-242) to mean ``source 
material, special nuclear material, production facilities, utilization 
facilities, and components, items or substances determined to have 
significance for nuclear explosive purposes pursuant to Section 109b. 
of the Atomic Energy Act.'' The term ``sensitive nuclear technology'' 
is defined in the Nuclear Nonproliferation Act to mean any information 
``which is important to the design, construction, fabrication, 
operation, or maintenance of a uranium enrichment or nuclear fuel 
reprocessing facility or a facility for the production of heavy water 
[but excluding Restricted Data].''
    ``Sensitive nuclear technology'' could not be exported or imported 
under the proposed agreement for peaceful nuclear cooperation without 
an amendment.


    Question (13). What is the effect of including the phrase 
``notwithstanding any other provision of law'' in section 1 (a) of S. 
2429 on other statutes such as the Iran and Syria Nonproliferation Act, 
sections 101 and 102 of the Arms Export Control Act, or any other 
relevant U.S. statutes or Executive Orders that would terminate nuclear 
commerce or impose sanctions for proliferation activities?

    Answer. The phrase ``notwithstanding any other provision of law'' 
would affect the operation of other statutes or other provisions of the 
Atomic Energy Act only to the extent that such provisions would affect 
the modifications to Sections 123, 128, and 129 that are embodied in S. 
2429. Thus, if another law established ``competing'' modifications to 
the waiver standard for Sections 128 or 129, the modifications in S. 
2429 would apply ``notwithstanding'' that other law.
    Accordingly, S. 2429 would not have any effect on the operation of 
the Iran and Syria Nonproliferation Act, Sections 101 and 102 of the 
Arms Export Control Act, or other nonproliferation sanctions provisions 
(except of course Section 129).


    Question (14). If the violations in section 129 of the AEA, and the 
termination of nuclear commerce for such violations, are not to apply 
to any agreement for atomic energy cooperation with India, as the 
administration's legislative proposal states in section 1 (a)(3) of S. 
2429, which penalties in other relevant laws would apply to atomic 
energy cooperation with India if India were to engage in activities 
that would terminate nuclear cooperation under section 129?--
Specifically which other laws would terminate cooperation if India were 
to--

          (a) Terminate or abrogate IAEA safeguards;

          (b) Materially violate a safeguards agreement with the IAEA;

          (c) Materially violate an agreement for cooperation with the 
        United States as stipulated in section 129(2)(A);

          (d) Assist, encourage, or induce any non-nuclear weapon state 
        to engage in activities stipulated in section 129 (2)(B); and,

          (e) Engage in cooperation that would result in termination of 
        exports as a result of India's having exported reprocessing 
        technology to a non-nuclear weapon state, except under an 
        evaluation and agreement with the United States, as specified 
        in section 129(2)(C).

    Answer. As noted in the answer to question 9 above, S. 2429 would 
not change the various grounds in Section 129 that trigger the 
termination of nuclear cooperation with respect to India, but rather 
would change the standard and process for waiving the application of 
the sanctions. Thus, Section 129 would still apply to nuclear exports 
to India under an agreement for peaceful nuclear cooperation, and it 
would be within the discretion of the President whether to exercise the 
waiver authority in S. 2429 (assuming he could make the requisite 
determinations and assuming no detonation after the date of enactment).
    With respect to the specific elements of the question above:

          (a) The standard U.S. agreement for peaceful nuclear 
        cooperation establishes a right to cease nuclear cooperation 
        and seek the return of transferred items if the other party 
        terminates or abrogates an IAEA safeguards agreement. The right 
        of return is required by Section 123 under these circumstances. 
        In addition, the Export-Import Bank Act provides for a cutoff 
        of Ex-Im Bank programs in support of exports to a country that 
        terminates or abrogates IAEA safeguards (Section 2(b)(4)).

          (b) The standard U.S. agreement for peaceful nuclear 
        cooperation establishes a right to cease nuclear cooperation 
        and seek the return of transferred items if the other party 
        materially violates an IAEA safeguards agreement. In addition, 
        the Export-Import Bank Act provides for a cutoff of Ex-Im Bank 
        programs in support of exports to a country that materially 
        violates an IAEA safeguards agreement (Section 2(b)(4)).

          (c) The standard U.S. agreement for peaceful nuclear 
        cooperation establishes a right to cease nuclear cooperation 
        and seek the return of transferred items if the other party 
        does not comply with the central nonproliferation provisions of 
        the agreement for cooperation. In addition, (1) the Export-
        Import Bank Act provides for a cutoff of Ex-Im Bank programs in 
        support of exports to a country that materially violates any 
        guarantee or other undertaking to the U.S. in an agreement for 
        nuclear cooperation (Section 2(b)(4)); (2) Section 530 of the 
        Foreign Relations Authorization Act (FY 1994-95) provides for 
        the cutoff of certain assistance to any country that materially 
        violates an agreement for cooperation (P.L. 103-236); and (3) 
        Section 3(f) of the Arms Export Control Act prohibits sales or 
        leases to a country that is in material breach of binding 
        commitments to the U.S. under agreements concerning the 
        nonproliferation of nuclear explosive devices.

          (d) The Export-Import Bank Act provides for a cutoff of Ex-Im 
        Bank programs in support of exports to a country that willfully 
        aids or abets a non-nuclear weapon state to acquire a nuclear 
        explosive device or unsafeguarded special nuclear material 
        (Section 2(b)(4)).

          (e) Section 102(a) of the Arms Export Control Act provides 
        for a cutoff of certain assistance to a country that transfers 
        reprocessing equipment, materials, or technology.


    Question (15). What standard would the Department use to evaluate 
the phrase ``making satisfactory progress'' in section 1 (b)(3) of S. 
2429?

    Answer. The administration is seeking to have India sign an 
Additional Protocol with the IAEA prior to the initiation of civil 
nuclear cooperation, but does not expect an Additional Protocol to be 
signed prior to submitting the bilateral agreement for peaceful nuclear 
cooperation to the U.S. Congress. Under the language of paragraph 
1(b)(3), it would be a judgment for the President whether the progress 
achieved by India and the IAEA in working out the terms of an 
Additional Protocol was satisfactory. This approach takes account of 
the fact that India's Additional Protocol will necessarily be tailored 
to its safeguards agreement, and therefore is likely to be negotiated 
after that safeguards agreement. Subsequent preparations for 
implementation of an Additional Protocol may also take some time.


    Question (16). Why did the administration not include a specified 
period of time in which the President would submit his subsequent 
determination under section 1(d) of S. 2429 to Congress after an Indian 
detonation?

    Answer. Provisions of this kind typically do not establish a 
deadline by which the President must make a determination. Depending on 
the circumstances, it may not be clear that a detonation has occurred, 
and thus there would be no clear beginning to the statutory time 
period. In addition, based on long-standing interpretations of 
provisions of this kind, if the facts demonstrated that an Indian 
detonation had occurred, the President would not have the discretion to 
avoid the legal consequences of a determination by simply refraining 
from making the determination.


    Question (17). Would the subsequent Presidential determination 
under section 1(d) of S. 2429 apply even if India insisted that such a 
detonation was a peaceful nuclear explosion?

    Answer. The President's determination under Section 1(d) addresses 
India's detonation of a ``nuclear explosive device.'' This term is used 
in the NPT and U.S. law to encompass all nuclear explosions, including 
so-called ``peaceful nuclear explosions.''


    Question (18). How would a subsequent Presidential determination 
under section 1(d) of S. 2429 be sent to Congress and to which 
committees would it be sent--would it be a written determination?

    Answer. Section 1(d) does not specify. The determination would be 
notified to relevant agencies and published in the Federal Register for 
implementation purposes. This approach is consistent with Section 129 
and other mandatory nonproliferation sanctions provisions, which do not 
require a report to Congress upon a determination being made, but 
rather require a report to Congress in the event of waiver (which would 
also be the case here, if the President waived under existing 
procedures of Sections 128 or 129).


    Question (19). Are sections 123.a(2), 128 and 129 the only sections 
of the AEA that are implicated in U.S.-Indian atomic energy 
cooperation, and if they are not, which other sections of the AEA will 
apply to U.S.-Indian atomic energy cooperation?

    Answer. As described in the answers to previous questions, numerous 
provisions of the AEA apply or, under particular circumstances, might 
apply to U.S.-India civil nuclear cooperation in addition to Sections 
123, 128, and 129. These provisions include Sections 53, 54a., 57, 64, 
82, 103, 104, 109, 126, 127, 130, and 131, but could include other 
provisions of the AEA.


    Question (20). Secretary Rice, in November 2005, U/S Joseph stated 
that ``We will also need to ensure that any cooperation is fully 
consistent with U.S. obligations under the NPT not to `in any way' 
assist India's nuclear weapons program, and with provisions of U.S. 
law.''
    Could you please provide this committee with a legal analysis that 
sets forth a detailed examination by the State Department establishing 
that nothing the administration is undertaking regarding changes to US 
law, an exception to the Nuclear Suppliers Group Guidelines for India, 
or any exports of nuclear material or reactors to India from the United 
States, or from other nations as a result of U.S. policy and legal 
changes for India, would in any way assist India's nuclear weapons 
program or in any way break U.S. obligations under the NPT?

    Answer. Under this Initiative, all nuclear transfers from the 
United States to India will be subject to IAEA safeguards. These 
safeguards will be applied to any source or special nuclear material 
transferred to India and to any source or special nuclear ``used in or 
produced through the use of'' material or equipment transferred to 
India. The application of IAEA safeguards is designed to ensure that 
U.S.-origin nuclear items remain exclusively on the civil side of the 
Indian nuclear program and do not in any way contribute to India's 
military nuclear program. Implementation of an Additional Protocol is 
designed to give further assurance of this.
    Under Article I of the NPT, nuclear-weapon states such as the 
United States undertake, inter alia: ``. . . not in any way to assist, 
encourage, or induce any non-nuclear weapon State to manufacture or 
otherwise acquire nuclear weapons or other nuclear explosive devices.'' 
Under Article III(2) of the NPT, all state parties undertake not to 
provide certain nuclear material and equipment to any non-nuclear 
weapon state (which includes non-parties) for peaceful purposes unless 
the nuclear material will be subject to safeguards.
    The NPT does not treat peaceful nuclear cooperation under 
safeguards as assisting a non-nuclear weapon state to manufacture 
nuclear weapons. Specifically, Article III(2) establishes the basis 
under which NPT parties may engage in nuclear cooperation with 
safeguarded facilities in countries that are not parties and do not 
have full-scope safeguards.
    In The Nuclear Non-Proliferation Treaty (the leading treatise on 
the negotiation of the NPT), Mohamed Shaker reached the same 
conclusion: ``Almost any kind of international nuclear assistance is 
potentially useful to a nuclear-weapon program. However, the 
application of safeguards to all peaceful nuclear assistance to non-
nuclear weapon States, as required by Article III, provides a means to 
establish and clarify the peaceful purposes of most international 
nuclear assistance.''
    This conclusion is also supported by the practice of the parties to 
the NPT. The U.S. and Canada engaged in nuclear cooperation with India 
before and after the NPT entered into force. The supply of fuel under 
facility-specific (INFCIRC/66) safeguards agreements was understood to 
satisfy our obligations under the NPT. Even after India's 1974 
detonation, fuel was provided to India's safeguarded Tarapur reactors 
by the United States, France, and Russia. Such fuel supply was 
understood to be consistent with the NPT. The Nuclear Suppliers Group 
did not make the political decision to adopt full-scope safeguards as a 
condition of supply until 1992, reflecting the fact that nuclear supply 
to a country without full-scope safeguards was not prohibited under the 
NPT.
    The argument that foreign fuel supply could allow India to devote 
its domestic uranium substantially or even exclusively to its weapons 
program, should India so desire, does not change this legal conclusion. 
As previously noted, nothing in the NPT, its negotiating history, or 
the practice of the parties supports the notion that fuel supply to 
safeguarded reactors for peaceful purposes could be construed as 
``assisting in the manufacture of nuclear weapons'' for purposes of 
Article I. Nuclear material and equipment exported by the U.S. to 
safeguarded activities would not be involved in any stage of the 
process of manufacturing nuclear weapons.
    In essence, nuclear cooperation under safeguards does not 
fundamentally differ from other forms of energy cooperation (e.g., oil 
supply, clean coal technology, alternative fuels). All such energy 
assistance would arguably relieve India of its reliance on domestic 
uranium for energy production. Yet such energy assistance clearly could 
not be viewed as assisting India in the manufacture of nuclear weapons.


    Question (21). Secretary Rice, U/S Joseph stated in November 2005, 
that ``Many of the specifics of required regulatory changes to 
implement full civil nuclear energy cooperation with India have yet to 
be determined by the administration.'' Additionally, he noted that 
``U.S. regulations that incorporate or reflect statutory language will 
need to be modified or waived in order to permit civil nuclear 
cooperation consistent with the Joint Statement, and will need to be 
addressed along with modification or waiver of the related statute.''
    Please provide the committee with a coordinated, interagency 
examination of all regulatory changes the administration would make to 
implement US-Indian atomic energy cooperation if its exception to 
provisions of the Atomic Energy Act, as introduced in S. 2429, were 
enacted. Such examination should be particular with regard to any 
relevant portion of 10 CFR Parts 110 and 810.

    Answer. In response to question 4 under the heading ``The 
Legislative Proposal,'' we noted that the proposed legislation would 
change the process of NRC licensing under 10 CFR 110.42(a)(6), which 
currently requires full-scope safeguards as a condition of issuing a 
license for export to a non-nuclear weapon state, unless waived by the 
President, in which case the provisions of Section 128 regarding 
congressional review would apply. The NRC would presumably amend this 
regulation to reflect the new legislation. Similarly, depending on the 
final wording of the new legislation, the NRC might have to modify 10 
CFR 110.46, which would otherwise bar issuance of a license to a 
country found by the President to have detonated a nuclear explosive 
device, unless the President has waived the corresponding provision of 
Section 129 of the AEA.
    Also, as discussed in the answer to question 4 under the heading 
``The Legislative Proposal,'' the consideration, evaluation, 
coordination and reporting of DOE authorizations under 10 CFR Part 810 
would not be affected with respect to the range of cooperation provided 
for under the proposed agreement for nuclear cooperation. To the extent 
that an authorization under Part 810 involved sensitive nuclear 
technology (SNT), the proposed legislation (unlike current law) would 
not require full-scope safeguards as a condition of supply. However, 
the proposed agreement for peaceful nuclear cooperation will not 
provide for exports of SNT; the agreement would have to be amended (and 
the amendment submitted to Congress for review) to allow for such 
exports. Depending on the final wording of the new legislation, DOE 
might have to consider whether amendments to its regulations would be 
required.
    The Department of Energy, the Nuclear Regulatory Commission, and 
the Department of Commerce would conduct a thorough review of their 
regulations to determine whether any changes would be required if the 
proposed legislation became law.


    Question (22)(a). Secretary Rice, in November 2005, U/S Joseph 
stated that ``once India develops a transparent and credible civil-
military separation plan for its nuclear facilities and programs and 
begins to implement it, we will then seek appropriate legislative 
solutions.''
    What additional steps toward implementation has the Government of 
India taken since tabling its Separation Plan; and, . . .

    Answer. Since India's separation plan was tabled in the Indian 
Parliament on March 7, 2006, the Indian Government has begun its 
implementation. During the week of April 3, the chairman of India's 
Atomic Energy Commission, Dr. Anil Kakodkar, traveled to Vienna to 
begin informal discussions with the International Atomic Energy Agency 
(IAEA) on India's safeguards agreement. While there, Dr. Kakodkar met 
with IAEA Director General Dr. Mohamed ElBaradei. In addition, we fully 
expect that India in the near future will both provide the IAEA with a 
detailed list of all civil facilities, along with anticipated timelines 
for the application of safeguards to those facilities, and conduct 
extensive safeguards negotiations with the IAEA.


    Question (22)(b). Secretary Rice, in November 2005, U/S Joseph 
stated that ``once India develops a transparent and credible civil-
military separation plan for its nuclear facilities and programs and 
begins to implement it, we will then seek appropriate legislative 
solutions.''
    What additional steps in respect of the Separation Plan need to be 
taken by India before its Separation Plan can be considered to be in 
force?

    Answer. To fully implement the separation plan, the Indian 
government will identify specific reactors to be offered for safeguards 
and provide a timeline for doing so. In addition, India will identify 
which upstream and downstream nuclear facilities it will declare to the 
IAEA as civil and offer for IAEA safeguards. Once the separation and 
declaration are complete, India must conclude and bring into force a 
safeguards agreement with the IAEA, as well as sign and adhere to an 
Additional Protocol.


    Question (23). Secretary Rice, administration officials have stated 
that it would be ``ideal'' to have U.S. law adjusted before the Nuclear 
Suppliers Group Guidelines are changed. Why, in your view, is it 
``ideal'' to have U.S. law change before NSG Guidelines are changed?

    Answer. For those countries that do not have domestic laws 
preventing nuclear commerce with India, the NSG Guidelines may 
constitute the only restrictions on the transfer of nuclear material 
and technology to that country. Enterprises engaged in various aspects 
of the nuclear industry in those countries would most likely be free to 
engage in nuclear commerce as soon as the NSG adopted a resolution 
allowing civil nuclear cooperation with India. If the NSG were to adopt 
such a resolution before the proposed U.S. legislation is enacted, U.S. 
businesses could be at a competitive disadvantage. Additionally, some 
NSG partners have indicated that they are looking to the U.S. for 
leadership on this issue and are not prepared to act before Congress 
indicates its intent.


    Question (24). Could you please furnish the committee with an 
analysis of the extant laws of the Russian Federation, France and China 
that are comparable in respect of nuclear export controls, in 
particular whether such laws contain a requirement for full-scope 
safeguards similar to the U.S. requirement at section 123.a(2) of the 
AEA?

    Answer. As Participating Governments of the Nuclear Suppliers Group 
(NSG), Russia, France, and China have each undertaken a political 
commitment that its national laws and regulations would be at least as 
stringent as the standards set forth in the NSG Guidelines and control 
lists. This includes the requirement for full-scope safeguards as a 
condition of supply to non-nuclear weapon states (as all states other 
than the NPT-defined nuclear weapon states are treated in this 
context). We have not compiled the laws of all NSG participants to 
determine how they satisfy this undertaking.Q04
                          assurances of supply
    Question (1). Secretary Rice, other than the United States, who 
would be the principal nations that are capable of selling India 
nuclear fuel, nuclear materials and reactor technology?

    Answer. The world's largest producers of uranium (outside the 
United States) are, in order, Canada, Australia, Kazakhstan, Russia, 
Namibia, Niger, Uzbekistan, Ukraine, and South Africa. All export 
uranium.
    China, France, Germany, the Netherlands, Russia, and the UK are all 
capable of supplying uranium enrichment services. Japan also has 
significant uranium enrichment capability that it uses for its domestic 
market.
    Belgium, Canada, France, Germany, Kazakhstan, Russia, Spain, 
Sweden, and the UK are the principal nuclear fuel exporters. Argentina, 
Brazil, Japan, and the Republic of Korea have significant nuclear fuel 
manufacturing capability that they use for their domestic markets.
    France, Germany (in partnership with France), Canada, Russia, and 
China are all capable of supplying nuclear reactors. Japan and the 
Republic of Korea have significant reactor/component manufacturing 
capability, but have not yet supplied complete reactor systems, only 
reactor components. The Czech Republic also has a significant reactor/
component manufacturing capability.
    Any or all of the above countries could be major suppliers of 
nuclear material and equipment to India. Numerous other countries have 
limited supply capabilities. However, each would need to make its own 
national decision about whether supply to India would be consistent 
with domestic and international obligations.


    Question (2). Has the United States obtained for India assurances 
of fuel supply from other supplier nations?--If so, which?

    Answer. The United States has not yet discussed fuel supply 
assurances for India's civil nuclear reactors with any third country. 
We believe that it is premature to do so at this time. Timely and 
effective Indian safeguards and Additional Protocol negotiations with 
the IAEA are important next steps.


    Question (3). Have all potential nuclear suppliers to India agreed 
to terminate the supply of fuel or reactors and related sensitive 
technology to India if it detonates a nuclear explosive device?

    Answer. Our interlocutors in the NSG have made it clear that their 
support for accommodating civil nuclear cooperation with India hinges 
upon India's successful implementation of its commitments in the July 
2005 Joint Statement, including India's commitment to continue its 
moratorium on nuclear testing. We do not have the official views of 
potential nuclear suppliers regarding a termination of transfers of 
nuclear material, including fuel and technology, to India should India 
detonate a nuclear explosive device. However, we expect that there 
would be irresistible political pressure for NSG participants to 
terminate any transfers of nuclear material and technology to India 
should India detonate a nuclear explosive device.
    Moreover, there is a provision in the NSG Guidelines calling for 
suppliers to meet and consult if a supplier believes there has been a 
violation of the supplier/recipient understandings resulting from the 
Guidelines, particularly in the event of, among other things, an 
explosion of a nuclear device. India's 1998 nuclear tests prompted the 
NSG to meet in an extraordinary plenary for such consultations. The 
Guidelines further reference the possibility of a common response, 
which could include the termination of nuclear transfers.
    We have made it clear to the Government of India that the Civil 
Nuclear Cooperation Initiative relies on India's commitment to continue 
its unilateral nuclear testing moratorium. This gives India clear 
economic and energy incentives not to test.


                      india's safeguards agreement
    Question (1). Secretary Rice, in November of last year, U/S Joseph 
stated that

          Safeguards agreements are modeled after INFCIRC/153 (the NPT 
        safeguards agreement) or INFCIRC/66 (the Agency's safeguards 
        system predating the NPT). India will not likely sign a 
        safeguards agreement based strictly on INFCIRC/153, as this 
        would require safeguards on India's nuclear weapons program. 
        NPT-acknowledged nuclear weapon states have so-called 
        ``voluntary'' safeguards agreements that draw on INFCIRC/153 
        language, but do not obligate the IAEA to actually apply 
        safeguards and do allow for the removal of facilities or 
        material from safeguards. We heard from other states at the 
        recent NSG meeting that they would not support a ``voluntary 
        offer'' arrangement as, in their view, it would be tantamount 
        to granting de facto nuclear weapon state status to India. We 
        have similarly indicated to India that we would not view such 
        an arrangement as defensible from a nonproliferation 
        standpoint. We therefore believe that the logical approach to 
        formulating a safeguards agreement for India is to use INFCIRC/
        66, which is currently used at India's four safeguarded 
        reactors. For the most part, INFCIRC/66 and INFCIRC/153 
        agreements result in very similar technical measures actually 
        applied at nuclear facilities.

    Please clarify, with regard to INFCIRC/66 (presumably /Rev. 2), 
where in that document does the requirement appear that once a facility 
is declared it must remain declared and under inspection in perpetuity?

    Answer. Unlike INFCIRC/153, the model safeguards agreement for non-
nuclear weapon states under the NPT, INFCIRC/66/Rev.2 is not a model 
safeguards agreement. Rather, it is a general description of how 
safeguards are to apply to nuclear material and facilities under the 
IAEA safeguards system that predates the NPT. Therefore it does not 
contain every provision that may be included in a safeguards agreement. 
In particular, the scope and duration of safeguards are normally 
spelled out in the safeguards agreement.
    The principle that safeguards should be applied in perpetuity in 
INFCIRC/66/Rev. 2 safeguards agreements was embodied in a Memorandum 
from the IAEA Director General to the IAEA Board of Governors in 1973 
(IAEA GOV/1621). We expect any safeguards agreement India negotiates 
with the IAEA to be consistent with its pledge to place its civil 
nuclear facilities under safeguards in perpetuity. As Secretary Rice 
testified before the SFRC, ``We've been very clear with the Indians 
that the permanence of the safeguard is permanence of the safeguards 
without condition.''


    Question (2). With regard to India's indigenous reactors that are 
not submitted to safeguards as a result of a project agreement, but 
rather voluntarily submitted, is there a requirement in INFCIRC/66 that 
safeguards must be applied in perpetuity to such reactors?

    Answer. As noted above, the scope and duration of safeguards are 
not set for the INFCIRC/66, but rather are normally spelled out in the 
safeguards agreements. In its separation plan, India has committed to 
safeguards in perpetuity. As Secretary Rice testified before the SFRC, 
``We've been very clear with the Indians that the permanence of the 
safeguard is permanence of the safeguards without condition.''


    Question (3). What, in your view, does India mean when in its 
Separation Plan it states that the safeguards agreement will provide 
for ``corrective measures that India may take to ensure uninterrupted 
operation of its civilian reactors in the event of disruption of 
foreign fuel supplies''?

    Answer. We cannot speak for the Government of India, of course; 
India will need to clarify its intent in this respect in its 
discussions with the IAEA. India has agreed to safeguards in perpetuity 
on its declared civil facilities and on all future civil reactors. 
Safeguards in perpetuity would also apply to nuclear material used or 
produced in those facilities. Thus, safeguards would continue to be 
required in a campaign mode on downstream facilities processing 
safeguarded material from declared civil facilities.
    We have had only initial, conceptual discussions with India 
regarding the question of assured fuel supplies. We believe that India 
can be provided with the assurances it seeks for fuel supply consistent 
with safeguards in perpetuity.


    Question (4). Would India be under any obligation, if it concluded 
an agreement with the IAEA using the INFCIRC/66 model, to keep 
safeguards on its eight indigenously built civil PHWRs in perpetuity?

    Answer. India has committed to place its civil nuclear facilities, 
including its eight indigenously built civil PHWRs, under safeguards in 
perpetuity.


    Question (5). Would India's safeguards obligation apply only to 
foreign fuel supplied to its indigenously built PHWRs?

    Answer. India has committed to place its civil nuclear facilities 
under safeguards in perpetuity. Safeguards would apply to any fuel, 
indigenous or foreign, that is in a civil reactor at the point that 
safeguards go into effect for that facility.
    In addition to India's unilateral safeguards commitment, any 
foreign-supplied fuel would be subject to safeguards by virtue of the 
supply arrangement for that material. Supplier states will require 
safeguards in perpetuity with respect to supplied items in order to 
satisfy the requirements of NPT Article III.2.


    Question (6). If India stopped using foreign fuel in those 
reactors, would its envisioned safeguards, as outlined in its 
implementation document, impose an obligation to continue to apply 
safeguards on the reactors themselves?

    Answer. For the reasons described in answers above, safeguards 
would continue to be required on all declared civil nuclear facilities 
and on all nuclear material produced, processed, or used in those 
facilities.


    Question (7). Generally, how are safeguards terminated under the 
provisions of INFCIRC/66/Rev.2?

    Answer. With respect to facilities and equipment covered by a 
safeguards agreement, in general it is the safeguards agreement, not 
INFCIRC/66, which specifies whether and how safeguards may be 
terminated. As noted above, INFCIRC/66 is not a model safeguards 
agreement, and its provisions apply to the extent they are incorporated 
into a particular safeguards agreement. The provisions for termination 
of safeguards on nuclear material are set forth in paragraphs 26-28 of 
INFCIRC/66/Rev.2. These provisions allow for safeguards to be 
terminated on material that is exported, consumed, diluted so that it 
is no longer usable, or practicably irrecoverable. These conditions are 
essentially the same as under a comprehensive safeguards agreement 
based on INFCIRC/153.
    INFCIRC/66 also has some conditions that are unique to cases where 
the state is not subject to comprehensive safeguards. In particular, it 
allows for placing under safeguards as a substitute material of at 
least the same quality and quantity that was not previously under 
safeguards, and for the termination of safeguards on the previously 
safeguarded material, if the IAEA agrees to such substitution. It also 
allows the withdrawal of material that was subject to safeguards only 
because it was used in a safeguarded nuclear facility; however, this 
does not apply to material that was produced while under safeguards.


    Question (8). What, in your view, are the most important provisions 
that any Indian safeguards agreement and additional protocol with the 
IAEA must contain?

    Answer. India's safeguards agreement with the IAEA must require 
that safeguards be maintained with respect to all nuclear material and 
equipment supplied to India and any special nuclear material used in or 
produced through the use of such material and equipment. Further, it 
must satisfy India's commitment to place its civil nuclear facilities 
under IAEA safeguards in perpetuity. These provisions are essential to 
provide a strong assurance to the United States and its NSG partners 
that nuclear cooperation with India will not ``in any way'' assist 
India's nuclear weapons program and will not be improperly diverted to 
third parties.
    Since India will have a military nuclear program that it does not 
declare to the IAEA, its Additional Protocol would differ from the 
Model Additional Protocol. Nevertheless, this Protocol should advance 
the IAEA's ability to track potential nuclear proliferation worldwide. 
In that regard, reporting of exports listed in Annex II of the Model 
Additional Protocol would arguably be of greatest value. India has 
pledged to conclude an Additional Protocol with respect to its civil 
facilities, and the Model Additional Protocol has provisions that deal 
with the ``sites'' of nuclear facilities. India has also listed as 
civil a number of research and development and other facilities that 
would not normally be subject to safeguards, but could be subject to 
the reporting and access provisions of an Additional Protocol.


    Question (9). What would be the frequency of inspections conducted 
in India by the IAEA under a safeguards agreement and additional 
protocol?

    Answer. A safeguards agreement usually does not specify the 
frequency of inspections, but rather sets limits on the number of 
routine inspections. The frequency of inspections at a particular 
facility is usually agreed in a separate ``facility attachment.'' We 
expect the implementation of safeguards in India would be generally 
consistent with the implementation of safeguards on similar facilities 
in other countries.


                           india's fuel cycle
    Question (1)(a). Secretary Rice, last November, U/S Burns stated 
that,

          Because of the current international restrictions on nuclear 
        commerce with India, India's plan for its nuclear power sector 
        seeks to provide for a 20-fold increase in nuclear-generated 
        electricity by 2020 without reactors from foreign suppliers. In 
        support of this objective, India's Department of Atomic Energy 
        (DAE) has committed extensive resources to develop a three-
        stage nuclear fuel cycle, based on its plentiful domestic 
        thorium reserves, that involves fast-breeder reactors, which 
        could pose proliferation risks. Moreover, some specialists 
        assess that such an approach would not prove cost-effective, 
        and there are clear technical challenges to overcome.

    Has India decided to end, or expressed a desire to end, its pursuit 
of a three-stage fuel cycle?

    Answer. Only the Government of India can provide a definitive 
answer to the question of whether it has decided to end its pursuit of 
a three-stage fuel cycle. Although the concept was mentioned in India's 
separation plan, it has had less prominence in our discussions of civil 
nuclear cooperation.


    Question (1)(b). Secretary Rice, last November, U/S Burns stated 
that,

          Because of the current international restrictions on nuclear 
        commerce with India, India's plan for its nuclear power sector 
        seeks to provide for a 20-fold increase in nuclear-generated 
        electricity by 2020 without reactors from foreign suppliers. In 
        support of this objective, India's Department of Atomic Energy 
        (DAE) has committed extensive resources to develop a three-
        stage nuclear fuel cycle, based on its plentiful domestic 
        thorium reserves, that involves fast-breeder reactors, which 
        could pose proliferation risks. Moreover, some specialists 
        assess that such an approach would not prove cost-effective, 
        and there are clear technical challenges to overcome.

    What are the ``proliferation risks'' posed by India's intended fuel 
cycle, in particular its breeder reactors?

    Answer. The use of thorium requires a complex fuel cycle, although 
its use as reactor fuel may produce less fissile material as a 
byproduct than does the use of uranium as a fuel.
    To be useful as reactor fuel, thorium must be converted into U-233 
in a breeder reactor. The fuel cycle requires considerable handling of 
fissile material in the various loading, unloading, and transfers 
associated with the stages of the fuel cycle. Each time fissile 
material is handled, there is a risk of diversion.


    Question (1)(c). Secretary Rice, last November, U/S Burns stated 
that,

          Because of the current international restrictions on nuclear 
        commerce with India, India's plan for its nuclear power sector 
        seeks to provide for a 20-fold increase in nuclear-generated 
        electricity by 2020 without reactors from foreign suppliers. In 
        support of this objective, India's Department of Atomic Energy 
        (DAE) has committed extensive resources to develop a three-
        stage nuclear fuel cycle, based on its plentiful domestic 
        thorium reserves, that involves fast-breeder reactors, which 
        could pose proliferation risks. Moreover, some specialists 
        assess that such an approach would not prove cost-effective, 
        and there are clear technical challenges to overcome.
    What are the proliferation risks associated with breeder reactor 
technology, generally?

    Answer. Unlike a typical commercial reactor, a breeder reactor 
creates more usable fuel (i.e., plutonium) than it uses. The production 
of plutonium and other fuels as a byproduct of the reactor's operation 
adds to the world net stock of potential fuel for a nuclear explosive 
device.

                     heavy water exports/production
    Question (1). Secretary Rice, in November of last year, I asked U/S 
Joseph if creating in law a distinction between India and NPT parties 
that would provide different treatment in terms of authorized exports 
for non-NPT parties--i.e., that India would be eligible for most U.S. 
exports except equipment, materials, or technology related to 
enrichment, reprocessing, and heavy water production--would be 
acceptable to the administration. Secretary Joseph stated that ``We do 
not export enrichment or reprocessing technology to any state. 
Therefore, `full civil nuclear cooperation' with India will not include 
enrichment or reprocessing technology. We have not yet determined 
whether such a prohibition would extend to heavy water production.''
    Last March, while on a visit to India, Commissioner Peter Lyons of 
the NRC is quoted as having stated that ``[The NRC] and [the Indian 
Atomic Energy Research Board] will have greater cooperation in the near 
future and this is important in the global market place reality and 
also when the U.S. nuclear industry is exploring the options other than 
Light Water Reactors (LWRs).''\4\
---------------------------------------------------------------------------
    \4\ ``USNRC for Greater Cooperation with AERB,'' The Press Trust of 
India, March 27, 2006.
---------------------------------------------------------------------------
    Has the administration determined whether or not heavy water could 
be exported to India from the United States?

    Answer. The U.S. does not foresee transferring heavy water 
production equipment or technology to India, and the draft bilateral 
peaceful nuclear cooperation agreement accordingly makes no provisions 
for such transfers.


    Question (2). Does the administration contemplate allowing India 
full participation in its Global Nuclear Energy Program (GNEP)?

    Answer. U.S. negotiators told India that India's decision not to 
designate its fast breeder reactors and associated fuel cycle research 
and development facilities as civil and place those facilities under 
IAEA safeguards would preclude our ability to collaborate on issues 
related to the fast burner reactors contemplated under GNEP at this 
time. If India places breeder reactors under safeguards in the future, 
the United States has indicated that, as appropriate, it is willing to 
explore potential areas for civil cooperation in this context.


    Question (3). Does the administration contemplate authorizing the 
export to India from the United States of reactors other than LWRs' if 
so, of which type?

    Answer. The United States has no current plans to export any power 
reactors other than LWRs to any country.


                   the nuclear cooperative agreement
    Question (1)(a)/(b). Secretary Rice, U/S Joseph previously stated 
that, regarding the Peaceful Nuclear Cooperative Agreement (PNCA) with 
India, it will not provide for full-scope safeguards, but rather ``will 
allow for appropriate controls to help ensure that material or goods 
provided for civilian purposes remain within the civilian sector.''

          (a) Has the administration prepared a draft text of a PNCA 
        with India?

          (b) If so, could you furnish this committee with a copy?

    Answer. The administration has prepared a draft text of a proposed 
U.S.-India agreement for peaceful nuclear cooperation. It was conveyed 
to the Government of India by the American Embassy in New Delhi on 
March 16, 2006.
    We have begun initial discussions with India on a bilateral 
agreement for peaceful nuclear cooperation. We have already briefed 
staff in detail on that agreement, and would be happy to arrange 
additional briefings for the committee on the outlines of what is 
contained in the text. Texts of the Section 123 agreements with non-
nuclear weapon states that are currently in force and previously 
reviewed by Congress are illustrative of the content we are seeking in 
an agreement with India (with the exception of a provision for full-
scope IAEA safeguards in India). Congress will have an opportunity to 
fully review the agreement once negotiations are complete and the 
agreement has been submitted for congressional review.


    Question (1)(c)/(d). Secretary Rice, U/S Joseph previously stated 
that, regarding the Peaceful Nuclear Cooperative Agreement (PNCA) with 
India, it will not provide for full-scope safeguards, but rather ``will 
allow for appropriate controls to help ensure that material or goods 
provided for civilian purposes remain within the civilian sector.''

          (c) Will the State Department prepare or issue a Circular 175 
        pursuant to 11 FAM 720 for a PNCA with India?

          (d) If so, could you furnish a copy of either the draft or 
        final Circular 175 to this committee?

    Answer. The Department of State prepared a Circular 175 memorandum 
requesting authority to negotiate an Atomic Energy Act Section 123 
agreement with India and obtained the concurrence of other interested 
Executive Branch agencies and the Nuclear Regulatory Commission. Under 
Secretary of State Joseph, under authority delegated by the Secretary 
of State, approved the request for authority to negotiate on March 13, 
2006.
    We would be happy to brief the committee or its staff on the 
matters addressed in the Circular 175 process, which relate directly to 
our current negotiations with India.


    Question (1)(e). Secretary Rice, U/S Joseph previously stated that, 
regarding the Peaceful Nuclear Cooperative Agreement (PNCA) with India, 
it will not provide for full-scope safeguards, but rather ``will allow 
for appropriate controls to help ensure that material or goods provided 
for civilian purposes remain within the civilian sector.''
    What verification mechanisms would be included in the U.S.-India 
nuclear cooperative agreement?--For example, would the United States be 
able to conduct any special verification visits at Indian facilities to 
which US materials and technology had been exported?

    Answer. The administration is seeking an agreement for peaceful 
nuclear cooperation with India that will provide for IAEA safeguards on 
all source or special nuclear material transferred by the United States 
to India and on any source or special nuclear material used in or 
produced through the use of material, equipment, or components so 
transferred. This provision will implement Section 123(a)(1) of the 
Atomic Energy Act (AEA) with respect to the content of the agreement 
and Section 127(1) of the AEA with respect to U.S. exports pursuant to 
the agreement. It is also necessary if U.S. nuclear exports to India 
are to comply with U.S. obligations under the NPT.
    In addition, in accordance with normal practice, the administration 
is seeking a provision in the agreement for ``fall-back'' safeguards 
(i.e., direct verification by the United States of material, equipment 
and components subject to the agreement) if for any reason IAEA 
safeguards are not being applied to those items as provided in the 
agreement. This is necessary to satisfy the requirement in Section 
123(a)(1) of the AEA that the safeguards provided for in the agreement 
will be maintained ``so long as the material or equipment remains under 
the jurisdiction or control of the cooperating party, irrespective of 
the duration of other provisions of the agreement'' (such as the 
provision for IAEA safeguards).
    In general, the United States (like other NSG participants) relies 
upon IAEA inspections and monitoring. However, the United States would 
in fact be able to conduct ``special verification visits'' in the form 
of fall-back safeguards as required by the U.S.-India agreement for 
peaceful nuclear cooperation in the event that IAEA safeguards were not 
being applied.

                              iaea process
    Question (1). Secretary Rice, has India submitted a declaration to 
the IAEA of its civilian nuclear sites, facilities, locations and 
materials?

    Answer. India has not yet submitted such a declaration to the IAEA. 
We fully expect that India in the near future will provide the IAEA 
with a detailed list of all civil facilities, along with anticipated 
timelines for the application of safeguards to those facilities.


    Question (2). Secretary Rice, how long do you anticipate that it 
will take for India to negotiate a declaration of civilian nuclear 
facilities, locations, information and materials, and its associated 
safeguards agreement and additional protocol, with the IAEA?

    Answer. We have encouraged India to conclude its safeguards 
agreement with the IAEA as soon as possible. India will submit its 
unilateral declaration of its civil facilities and programs as part of 
that process. India has conducted initial, informal safeguards 
discussions with the IAEA, but neither party has yet publicized a 
specific negotiation timeline. In our view, an ``India-specific'' 
safeguards agreement should generally conform with INFCIRC/66. Rev. 2. 
If it does so, we see no fundamental obstacle to concluding such an 
agreement in a reasonable timeframe.
    India's Additional Protocol will be appropriate to its safeguards 
agreement. In principle, the safeguards agreement and the Additional 
Protocol could be negotiated in parallel. However, in the interest of 
concluding the safeguards agreement as soon as possible, India may seek 
to defer negotiation of an Additional Protocol until negotiations on 
the safeguards agreement are complete.


    Question (3). Secretary Rice, what are the steps with regard to 
both IAEA process and Indian law through which an Indian safeguards 
agreement and additional protocol with the IAEA would need to pass 
before they would be in force, and which of those steps have been 
completed?

    Answer. For both the safeguards agreement and the Additional 
Protocol, the process involves the following steps:

          1. India and the IAEA Secretariat negotiate the agreement 
        and/or protocol.

          2. The IAEA Secretariat presents the agreement and/or 
        protocol to the IAEA Board of Governors for approval. The 
        United States has a designated seat on the 35-member Board, 
        which normally decides such matters by consensus.

          3. Once the Board approves, India and the IAEA may sign the 
        agreement and/or protocol.

          4. India must then complete its statutory and constitutional 
        requirements for ratification or approval of the agreement and/
        or protocol. The agreement and/or protocol enters into force 
        once India informs the IAEA that these requirements for entry 
        into force have been met.

    To date, India has conducted initial, informal consultations with 
the IAEA, but none of the steps listed above has yet been completed.


    Question (4). Secretary Rice, would India's existing agreements 
with the IAEA (INFCIRC/211, INFCIRC 260, INFCIRC/360, INFCIRC/374, and 
INFCIRC /433) need to be changed or withdrawn when an Indian 
declaration, safeguards agreement and additional protocol are 
negotiated?

    Answer. There is no legal requirement to modify any of India's 
existing safeguards agreements in order for a new safeguards agreement 
and Additional Protocol to be negotiated and enter into force. However, 
it is not uncommon for one safeguards agreement to be suspended when 
another agreement of broader scope enters into force. In principle, the 
pre-existing safeguards agreement would in such a case not be 
terminated, but its implementation would be suspended as long as the 
new safeguards agreement is in force.
    It is up to India and the IAEA whether, consistent with their 
international obligations, to seek to suspend other safeguards 
agreements in favor of a new, more comprehensive one. There may be 
advantages to having safeguards applied under the terms of a single 
agreement, particularly in terms of administrative simplicity. However, 
many of India's existing safeguards agreements are safeguards transfer 
agreements. These are agreements between India and the IAEA that are 
linked to supply arrangements between various supplier states. They 
provide for the IAEA to apply safeguards with respect to a particular 
supply arrangement. In general, the consent of the supplier state would 
be required in order for any such agreement to be suspended.

                            recent sanctions
          Note: Accompanying these QFRs is an unclassified report 
        compiled by the Department of Commerce's Bureau of Industrial 
        Security (DOC/BIS). The answers to the QFRs below do not 
        include information regarding ongoing, open investigations due 
        to the sensitivity of such investigations.

    Question (1)(a). Secretary Rice, on March 9, 2006, the Department 
of Commerce sanctioned two Indian persons for transactions with North 
Korea.\5\ Please provide this committee, in classified form if 
necessary but in open form if possible, with an interagency-coordinated 
list regarding the following:
---------------------------------------------------------------------------
    \5\ 71 FR 12168 and 12170.
---------------------------------------------------------------------------
    With respect to the Arms Export Control Act, the Export 
Administration Act, the International Emergency Economic Powers Act, 
and related legislation governing imports, exports or improper 
financial transactions--
          any criminal investigation involving India or any Indian 
        entity or other person, including any Indian national, since 
        May 1998, and whether each such investigation is open or closed 
        and, if closed, the disposition; and

    Answer. Information on investigations by the Customs Department, 
due to the sensitivity of the information, will be provided separately.
    DOC/BIS's Investigative Management System (IMS) indicates that 
during the period February 2003 to present, BIS opened 63 cases 
involving possible Export Administration Regulations (EAR) violations 
by U.S. firms violating U.S. laws, with India as the ultimate consignee 
of the exported items. There are currently 33 open cases in IMS with 
India listed as the ultimate consignee.

    Note: IMS was activated in February 2003. Although prior automated 
investigative files were migrated to IMS, data in these prior files 
cannot be queried electronically; thus, BIS cannot reliably report on 
case statistics prior to February 2003. The current review covers 
investigations input into IMS since February 2003 identified as 
involving possible illegal exports to India in violation of the EAR.
Regarding closed criminal cases:
   Materials International--On November 18, 2005, Fiber 
        Materials Inc. of Maine; its wholly owned subsidiary, Materials 
        International of Massachusetts; and the companies' two top 
        officers, Walter Lachman and Maurice Subilia, were sentenced 
        for conspiracy and export violations related to the unlicensed 
        export to India of equipment used to manufacture carbon-carbon 
        components with applications in ballistic missiles. All four 
        defendants had been convicted of one count of violating the 
        Export Administration Act (EAA) and one count of conspiracy by 
        a federal trial jury on March 31, 1995. The equipment, a 
        specially designed control panel for operation of a hot 
        isostatic press used to produce carbon-carbon items, was 
        exported to India's Defense Research Development Laboratory 
        (DRDL), the defense laboratory developing India's principal 
        nuclear-capable ballistic missile, the Agni. Lachman was 
        sentenced to three years probation, the first year of which is 
        to be spent in home detention. Subilia was sentenced to three 
        years probation, the first six months of which was to be spent 
        in community confinement to be followed by one year of home 
        detention. A criminal fine of $250,000 was imposed on Lachman, 
        Subilia, and Fiber Materials; no fine was imposed on Materials 
        International because it is a wholly-owned subsidiary of Fiber 
        Materials. OEE and Immigration and Customs Enforcement (ICE) 
        jointly conducted this investigation.

   Berkeley Nucleonics--On June 6, 2004, BNC Corp. of San 
        Rafael, California (previously Berkeley Nucleonics Corporation) 
        was sentenced to five years probation and a $300,000 criminal 
        fine for illegally exporting pulse generators to two entities 
        in India without required export licenses. The end-users were 
        listed on BIS's entity list for nuclear nonproliferation 
        reasons. Two former employees of BNC, Richard Hamilton and 
        Vincent Delfino, were convicted in December 2003, for their 
        role in these exports. Each was sentenced to two years 
        probation, a $1,000 fine, and 100 hours of community service, 
        and was prohibited from engaging in or facilitating export 
        transactions. BIS assessed BNC a $55,000 administrative penalty 
        and a five-year suspended denial of export privileges as part 
        of an agreement with BNC to settle charges related to these 
        unlicensed exports.

   DirecTV/Hughes Network Systems--in 2005, DirecTV/Hughes 
        Network Systems entered into a consent agreement with the 
        Department of State to settle alleged violations of the 
        International Trafficking in Arms Regulations related to the 
        unauthorized export of U.S. Military List hardware and services 
        to end users in a number of countries, including India.

   Multigen Paradigm--in 2003, Multigen Paradigm entered into a 
        consent agreement with the Department of State to settle 
        alleged violations of the International Trafficking in Arms 
        Regulations related to unauthorized exports to a number of 
        countries, including India.


    Question (1)(b). Secretary Rice, on March 9, 2006, the Department 
of Commerce sanctioned two Indian persons for transactions with North 
Korea.\6\ Please provide this committee, in classified form if 
necessary but in open form if possible, with an interagency-coordinated 
list regarding the following:
---------------------------------------------------------------------------
    \6\ 71 FR 12168 and 12170.
---------------------------------------------------------------------------
    With respect to the Arms Export Control Act, the Export 
Administration Act, the International Emergency Economic Powers Act, 
and related legislation governing imports, exports or improper 
financial transactions--
    any civil or administration investigation involving India or any 
Indian entity or other person, including any Indian national, since May 
1998, and whether each such investigation is open or closed and, if 
closed, the disposition; and

    Answer. Information on investigations by the Customs Department, 
due to the sensitivity of the information, will be provided separately.
    The following are administrative investigations conducted by DOC/
BIS since February 2003 identified as involving possible illegal 
exports to India in violation of the EAR. (Note: As noted above, 
Commerce could only report on case statistics prior to February 2003.)

   State Bank of India--In 2003, the Department of the 
        Treasury's Office of Foreign Assets Control imposed a civil 
        penalty in the amount of $5,500 on the State Bank of India, New 
        York for a funds transfer made in violation of Executive Order 
        13121 of April 30, 1999. E.O. 13121, issued pursuant to IEEPA, 
        imposed sanctions on the Federal Republic of Yugoslavia as a 
        result of the humanitarian crisis in Kosovo.

   Orcas International--On March 2, 2006, Assistant Secretary 
        Darryl Jackson signed four Final Orders in connection with the 
        attempted un-licensed export of toxins (Aflatoxin and 
        Staphlyloccocal Enterotoxins) classified as ECCN 1C351, to end-
        users in North Korea. Orcas International, of Flanders New 
        Jersey agreed to pay an administrative penalty of $19,800 and 
        have its export privileges denied for four years. Mr. 
        Graneshawar K. Rao, President of Orcas International, will have 
        his export privileges denied for four years. Dolphin 
        International of New Delhi, India, agreed to pay a $22,000 
        administrative penalty and have its export privileges denied 
        for four years. Vishwanath Kakade Rao, president of Dolphin 
        International, agreed to have his export privileges denied for 
        four years.

   Becton Dickinson--On December 28, 2005, Assistant Secretary 
        Jackson signed a Final Order against Becton, Dickinson, & Co., 
        of Franklin Lakes, New Jersey. Becton, Dickinson & Co was 
        ordered to pay a $123,000 administrative penalty, and was 
        subjected to an audit requirement. Becton, Dickinson, & Co., 
        and their Singapore subsidiary, committed a total of thirty-six 
        violations of the Export Administration Regulations (EAR) by 
        exporting various life sciences research products to listed 
        entities from the Indian Department of Atomic Energy and Indian 
        Department of Defense.

   Teledyne Technology--On April 15, 2005, Teledyne Energy 
        Systems Inc. (TES), Hunt Valley, Maryland, agreed to pay a 
        $16,500 administrative penalty. On three occasions in 1999 and 
        2000, TES exported technical information on proposed power 
        plants, items subject to the EAR, from the United States to 
        Bharat Heavy Electricals Ltd (BHEL) in New Delhi, India, 
        without the required Commerce Department export licenses. At 
        the time of the export, BHEL was listed on BIS's Entity List, 
        which is a compilation of end-users who have been determined to 
        present an unacceptable risk of diversion to programs for the 
        development of weapons of mass destruction or their means of 
        delivery. TES voluntarily self-disclosed the violations and 
        cooperated fully in the investigation.

   Yarde Metals--On April 12, 2005 Yarde Metals (Yarde) of 
        Happauge, New York, was ordered to pay a $10,000 administrative 
        penalty in connection with the unlicensed export of an aluminum 
        heat treatable plate to an organization in India on Commerce's 
        Entity List. On or about May 5, 2003, Yarde engaged in conduct 
        prohibited by the EAR when it exported an aluminum plate from 
        the United States to the Vikram Sarabhai Space Center.

   Air Tiger Express)On March 30, 2005, Air Tiger Express, a 
        freight forwarder located in El Segundo, California, agreed to 
        pay a $49,500 administrative penalty to settle charges that on 
        nine occasions in 1998 and 1999, it aided and abetted the 
        unlicensed export of items subject to the EAR to organizations 
        in India that were on the Department's Entity List.

   Datum Inc.--On October 28, 2004, Symmetricom, Inc. of San 
        Jose, California, as the successor to Datum, Inc. of Beverly, 
        Massachusetts, agreed to pay a $35,500 administrative penalty 
        to settle charges that Datum exported of a 10 MHz oscillator to 
        the Government of India, Department of Atomic Energy, 
        Directorate of Purchase and Stores in Mumbai, India.

   New Brunswick Scientific--On August 30, 2004, New Brunswick 
        Scientific was ordered to pay a $51,000 administrative penalty 
        for the export of lab equipment, software and a fermentor to an 
        Entity List end-user, the Directorate of Purchase and Stores of 
        the Indian Department of Atomic Energy.

   Chyron Corporation--On August 30, 2004, Chyron Corporation 
        was ordered to pay a $15,300 administrative penalty for the 
        export of an animation system to and Entity List end-user, the 
        Space Application Center in Ahmedabad, India.

   The Sentry Company--On June 24, 2004, The Sentry Company was 
        ordered to pay a $25,000 administrative penalty for the export 
        of heat treating containers to an Entity List end-user, Bharat 
        Dynamics Ltd. in Hydrabad, India.

   General Monitors--On June 14, 2004, General Monitors was 
        ordered to pay a $40,000 administrative penalty for the export 
        of gas and fire detection equipment to an Entity List end-user, 
        Bharat Heavy Electrical Ltd. in Hyderabad, India.

   RLC Electronics--On April 14, 2004, RLC Electronics was 
        ordered to pay a $30,000 administrative penalty for the export 
        of power dividers and low pass filters to the Indian Space 
        Research Organization, Telemetry, Tracking, and Command Network 
        in Bangalore, India, and the export of position switches 
        Sriharikota Space Center in Bangalore, India. Both of the 
        organizations were on the Entity List.

   Atlas Copco--On March 10, 2004, Atlas Copco was ordered to 
        pay a $13,000 administrative penalty for the export of o-rings 
        and seals to an Entity List end-user, Bharat Heavy Electrical 
        Ltd. in Hyderabad, India.

   Alicat Scientific--On March 4, 2004, Alicat Scientific was 
        ordered to pay a $7,000 ($2,000 suspended) administrative 
        penalty for the export of mass flow meters and power supplies 
        to an Entity List end-user, the Department of Atomic Energy in 
        Mumbai India.

   Massive International--On January 15, 2004, Massive 
        International was ordered to pay a $13,000 administrative 
        penalty for the attempted export of hydraulic stud tensioners 
        to an Entity List end-user, Bharat Heavy Electrical Ltd. in 
        Tiruchirapalli, India.

   Denton Vacuum--On January 30, 2004, Denton Vacuum LLC was 
        ordered to pay a $7,000 administrative penalty for exporting a 
        sputtering system to an Entity List end-user, the Solid State 
        Physics Laboratory in New Delhi, India.

   Future Metals--On November 12, 2003, Future Metals of Fort 
        Lauderdale, Florida, was ordered to pay a $180,000 
        administrative penalty for the export of aluminum sheets and 
        stainless steel tubes to an Entity List end-user, Hindustan 
        Aeronautics Ltd., Engine Division, and also for the export of 
        aluminum bars to another Indian end-user.

   Astro-Med, Inc.--On September 26, 2003, the Commerce 
        Department issued an order implementing the terms of a 
        settlement agreement under which Astro-Med, Inc. of Warwick, 
        Rhode Island agreed to pay a $5,000 administrative penalty to 
        settle charges that it attempted to export a Dash 10M data 
        recorder to the Nuclear Power Corporation of India without the 
        required Department of Commerce license. BIS charged that 
        Astro-Med knew or had reason to know that the item to be 
        exported would be used directly or indirectly in an 
        unsafeguarded nuclear activity.

   DSV Samson Transport, Inc.--On July 17, 2003, DSV Samson 
        Transport, Inc., a freight forwarding company based in New 
        Jersey, pled guilty in the U.S. District Court for the District 
        of Columbia, and was sentenced to pay a $250,000 criminal fine 
        and serve five years corporate probation for violations of U.S. 
        export laws. DSV Samson also agreed to pay a $399,000 
        administrative penalty to the Department of Commerce to settle 
        the administrative case relating to these illegal exports. 
        Between November 1999 and May 12, 2001, DSV Samson made 30 
        exports to organizations on the Entity List in India without 
        the required Department of Commerce export licenses. Despite 
        being informed by Special Agents from the Office of Export 
        Enforcement on at least three occasions about the regulations 
        controlling such shipments, DSV Samson forwarded these 
        shipments and caused violations of Department of Commerce 
        export controls designed to prevent nuclear proliferation.

   Quest Technologies--On April 26, 2001, Quest Technologies 
        was ordered to pay a $225,000 administrative penalty ($135,000 
        suspended) for the illegal export of chlorine and sulfur 
        detectors to India, Vietnam, Taiwan, Saudi Arabia, Egypt, and 
        the United Arab Emirates.

   Detector Electronics Corporation--On November 8, 2001, BIS 
        imposed a $15,000 administrative penalty on Detector 
        Electronics Corporation of Minneapolis, Minnesota, to settle 
        charges that the company exported U.S.-origin ultraviolet fire 
        detection systems to Bharat Heavy Electrical Ltd. without the 
        required BIS license. Bharat was a company in India that was 
        identified on Commerce's Entity List. BIS alleged that Detector 
        Electronics Corporation exported the fire detection systems to 
        India on two occasions between November and December 1998.

   Optical Associates, Inc.--On September 20, 2000, Optical 
        Associates, Inc., of Milpitas, California, pled guilty in the 
        U.S. District Court in the Northern District of California to 
        the charge that the company illegally exported a mask aligner 
        and related parts, in violation of the EAR, to the State Bank 
        of India with knowledge that the end-user would be Bhaba Atomic 
        Research Center (BARC), a prohibited entity in India. The mask 
        aligner is controlled for antiterrorism under the EAR. BARC is 
        a division of the Department of Atomic Energy of the Government 
        of India. Unlicensed exports to BARC have been prohibited since 
        June 30, 1997.

   Coherent Inc.--On February 2, 1998, Coherent Inc. was 
        ordered to pay a $20,000 administrative penalty for the export 
        of plasma tubes for use in argon ion lasers to the Indian 
        Department of Atomic Energy.


    Question (2). Secretary Rice, on March 9, 2006, the Department of 
Commerce sanctioned two Indian persons for transactions with North 
Korea.\7\ Please provide this committee, in classified form if 
necessary but in open form if possible, with an interagency-coordinated 
list regarding the following:
---------------------------------------------------------------------------
    \7\ 71 FR 12168 and 12170.
---------------------------------------------------------------------------
    With respect to any U.S. law providing for the imposition of 
sanctions related to weapons of mass destruction, their means of 
delivery, or conventional weapons, a summary of any internal 
investigation, review or other examination undertaken by the Department 
of State or the President of any Indian entities or other persons, 
including any Indian national, whether the investigation, review or 
other examination is open or closed and, if closed, the disposition of 
each such investigation, review or examination.

    Answer. We take seriously all reports of potential proliferation 
activities and take appropriate action, including imposing sanctions 
required or authorized under U.S. law, when evidence warrants. For 
example, the Iran and Syria Nonproliferation Act (ISNA), formerly the 
Iran Nonproliferation Act of 2000 (INPA), requires a bi-annual review 
of information for possible sanctions actions and is a rolling process. 
Other sanctions pursuant to U.S. legal authorities are considered 
whenever evidence meets the legal criteria.
    Since May 1998, the U.S. has imposed nonproliferation sanctions on 
a number of different Indian entities pursuant to U.S. legal 
authorities.
    Owing to the nature of the information used for making sanctions 
determinations and ongoing diplomatic exchanges with the Government of 
India, further details of these particular sanctions cases would need 
to be provided in a classified setting. We would be happy to brief the 
committee as appropriate.

   In July 2002, the U.S. imposed sanctions on the Indian 
        entity Hans Raj Shiv pursuant to the Iran-Iraq Nonproliferation 
        Act for the transfer to Iraq of equipment and technology 
        controlled by the Australia Group. The U.S. also sanctioned 
        Shiv pursuant to the Chemical and Biological Weapons Control 
        and Warfare Elimination Act in February 2003.

   In February 2003, the U.S. imposed sanctions on the Indian 
        entity NEC Engineers Pvt. Ltd. pursuant to Chemical and 
        Biological Weapons Control and Warfare Elimination Act.

   In February 2003, the U.S. imposed sanctions on the Indian 
        entity Protech Consultants, Pvt. Ltd. pursuant to the Iran-Iraq 
        Arms Nonproliferation Act for the transfer to Iraq of equipment 
        and technology controlled by the Australia Group.

   Pursuant to the Iran Nonproliferation Act of 2000 (INPA), 
        the U.S. has imposed sanctions four times on Indian entities. 
        In September 2004, the U.S. imposed INPA penalties on Dr. C. 
        Surendar and Dr. Y.S.R. Prasad; penalties on Dr. Surendar were 
        rescinded in December 2005. Also in December 2005, the U.S. 
        imposed INPA penalties on the Indian entities Sabero Organic 
        Chemicals Gujarat Ltd. and Sandhya Organic Chemicals Pvt. Ltd.

    India's new Weapons of Mass Destruction (WMD) and their Delivery 
Systems (Prohibitions of Unlawful Activities) Act, enacted in May 2005, 
with its stronger ``catch-all'' provisions, strengthens considerably 
the government's regulatory ability to control transfers of otherwise 
uncontrolled items that could contribute to a WMD or missile program of 
concern.


                       india's export control law
    Question (1). Secretary Rice, in November of last year, U/S Joseph 
stated with regard to India's new export control law (Weapons of Mass 
Destruction and Their Delivery Systems (Prohibition of Unlawful 
Activities) Act, adopted in 2005), that ``Department of State and 
Commerce lawyers and export control experts have reviewed'' that law 
but that ``no consolidated analytical document representing an 
interagency assessment of India's export control law and regulations'' 
was available. Additionally, I asked whether the Department would 
furnish questions it had sent to the Indian Government concerning that 
law to this committee, and was informed that ``[g]iven the 
sensitivities of the diplomatic communications involved, we cannot 
provide the information for the record.''
    Could you please provide me in classified form the questions the 
Department asked the Indian Government regarding its WMD law?

    Answer. We would be happy to provide a classified briefing to the 
committee on the questions raised with the Indian government regarding 
its WMD law.


    Question (2). Please provide this committee with a consolidated 
analytical document representing an interagency assessment of India's 
export control laws and regulations.

    Answer. No such consolidated analytical document representing an 
interagency assessment of Indian export controls and regulations 
currently exists. We would be happy to brief the committee on India's 
export control laws and regulations.


    Question (3). Secretary Rice, on March 10, 2006, the Washington, 
DC-based Institute for Science and International Security (ISIS) 
released a report which concluded that India has ``a well-developed, 
active, and secret Indian program to outfit its uranium enrichment 
program and circumvent other countries' export control efforts'' and 
that ``Indian procurement methods for its nuclear program leak 
sensitive nuclear technology.''\8\
---------------------------------------------------------------------------
    \8\ Available at http://www.isis-online.org/publications/southasia/
indianprocurement.pdf.
---------------------------------------------------------------------------
    In classified form if necessary, but in open form if possible, 
please provide me with the Department's assessment of the allegations 
raised in the ISIS report on Indian procurement, particularly with 
regard to the alleged instances of illegal acquisition of equipment, 
diversion of such equipment from stated end uses and/or end users, and 
any risk of onward proliferation arising out of such activities.

    Answer. We would be happy to discuss these allegations in 
classified session.


    Question (4). How would the requirements of relevant U.S. licenses 
assure that any U.S. exports to Indian companies and trading agents 
that are alleged to have promulgated or purchased sensitive tender 
documents relating to uranium enrichment or other sensitive parts of 
the nuclear fuel cycle do not transfer the know-how or items exported 
from the United States to India to other companies or countries?

    Answer. To clarify the scope of the question, the ``sensitive parts 
of the nuclear fuel cycle'' will not be included in U.S.-India civil 
nuclear cooperation. Our draft agreement for peaceful nuclear 
cooperation provides that ``sensitive nuclear technology'' may not be 
transferred without an amendment to the agreement, which would be 
subject to congressional review.
    India's safeguards agreement and Additional Protocol with the IAEA 
will provide the IAEA with access to Indian facilities and programs, 
including documentation, which will provide assurances against internal 
diversion and re-transfer of controlled technology.
    The details of licensing requirements are within the purview of the 
licensing agencies, generally the Department of Commerce, the 
Department of Energy, and the Nuclear Regulatory Commission.
    For dual-use nuclear exports administered by the Department of 
Commerce, there are several ways the U.S. is assured that exports are 
going to reliable recipients of U.S. origin items and have not been 
diverted to unauthorized end user or end uses. As part of the license 
application package we require nuclear certification that the item(s) 
will not be used in any of the prohibited activities described in 
744.2(a) of the 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 
pre-license checks. This information is then used to make licensing 
decisions. As part of the approval process, export license 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. In 
addition, the U.S. has an end use assurance letter from the Government 
of India that commits to ensure that items are not transferred from or 
through India for use in prohibited unsafeguarded nuclear, WMD, or WMD 
delivery programs. 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 those items are being used as stated on the export license 
application.
    The transfer of uranium enrichment or other nuclear fuel 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) are found in 10 CFR Part 810 which requires that, prior 
to such approval, government-to-government assurances outlining the 
controls/conditions that will be used for securing this technology must 
be in place. This includes the requirement that the transfer, anything 
derived from the transfer, and anything that is produced or modified in 
a facility constructed as a result of the transfer will be used for 
peaceful purposes. Further, the United States places additional 
conditions on the authorization to transfer the technology that limits 
access and prohibits the retransfer of the technology.

                             india's status
    Question (1). Secretary Rice, the July 2005 Joint Statement terms 
India ``a responsible state with advanced nuclear technology.''\9\
---------------------------------------------------------------------------
    \9\ http://www.whitehouse.gov/news/releases/2005/07/20050718-
6.html.
---------------------------------------------------------------------------
    For the purposes of U.S. compliance with the NPT, and under 
relevant U.S. laws making reference to a non-nuclear weapon state or 
states, does India remain a non-nuclear weapon state?

    Answer. While India has nuclear weapons and we must deal with this 
fact in a realistic, pragmatic manner, we do not recognize India as a 
nuclear weapon state or seek to legitimize India's nuclear weapons 
program.
    The 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT) 
defines a ``Nuclear Weapon State'' as ``one which has manufactured and 
exploded a nuclear weapon or other nuclear explosive device prior to 
January 1, 1967.'' India does not meet this definition, and we do not 
seek to amend the Treaty to provide otherwise. U.S. law adopts the NPT 
definition, so India is a non-nuclear weapon state for purposes of U.S. 
law.



                                                                                    ANNEX--RECENT INDIA CASES
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                     Sections                                         Criminal
          Order  Date                 Respondent         OEE  Case Name                            Charges                           Violated         VSD             Result            Case
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/17/06.......................  Tech Pro, Inc.       In the Matter of     Exported software upgrades to the Vikram Sarabhai       764.2(a)[1]            No   Settlement                    No
                                                       Tech Pro, Inc.       Space Center of Thiruvanthapuram, India, an                                         Agreement--civil
                                                                            organization on the Entity list                                                     penalty of $7,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/02/06.......................  Orcas                In the Matter of     Conspired and acted in concert with others, known and   764.2(d)[1]            No   Settlement                    No
                                  International,       Orcas                unknown, to export and attempted to export toxins      764.2(b)[1]                  Agreement--civil
                                  Inc.                 International,       from the United States to North Korea without the                                   penalty of
                                                       Inc.                 required license                                                                    $19,800; export
                                                                                                                                                                privileges denied
                                                                                                                                                                for four years for
                                                                                                                                                                items specified on
                                                                                                                                                                the Commerce
                                                                                                                                                                Control List
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/02/06.......................  Vishwanath Kakade    In the Matter of     Conspired and acted in concert with others, known and   764.2(d)[1]            No   Settlement                    No
                                  Rao                  Orcas                unknown, to export and soliciting an export of toxins  764.2(c)[1]                  Agreement--export
                                                       International,       from the United States to North Korea without the                                   privileges denied
                                                       Inc.                 required license                                                                    for four years
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/02/06.......................  Graneshawar K. Rao   In the Matter of     Conspired and acted in concert with others, known and   764.2(d)[1]            No   Settlement                    No
                                                       Orcas                unknown, to export and attempted to export toxins      764.2(b)[1]                  Agreement--export
                                                       International,       from the United States to North Korea without the                                   privileges denied
                                                       Inc.                 required license                                                                    for four years for
                                                                                                                                                                items specified on
                                                                                                                                                                the Commerce
                                                                                                                                                                Control List
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/02/06.......................  Dolphin              In the Matter of     Conspired and acted in concert with others, known and   764.2(d)[1]            No   Settlement                    No
                                  International,       Orcas                unknown, to export and soliciting an export of toxins  764.2(c)[1]                  Agreement--civil
                                  Ltd.                 International,       from the United States to North Korea without the                                   penalty of
                                                       Inc.                 required license                                                                    $22,000; export
                                                                                                                                                                privileges denied
                                                                                                                                                                for four years
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
12/28/05.......................  Becton, Dickinson    In the Matter of     Exported biomedical research products, labware for      764.2(a)[36]          Yes   Settlement                    No
                                  and Company          Becton, Dickinson    tissue culture and fluid handling and reagent systems                               Agreement--civil
                                                       and Company          for life sciences research to organizations in India                                penalty of
                                                                            on the Entity List without the required licenses                                    $123,000; perform
                                                                                                                                                                audit of internal
                                                                                                                                                                compliance program
                                                                                                                                                                within 24 months
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
08/10/05.......................  Quantachrome         In the Matter of     Exported an Automated Surface Area and Pore Size        764.2(a)[1]            No   Settlement                    No
                                  Instruments          Quantachrome         Analyzer and related scientific instruments to the                                  Agreement--civil
                                                       Instruments          Department of Atomic Energy, Bhabha Atomic Research                                 penalty of $6,000
                                                                            Center, an organization on the BIS Entity List
                                                                            without obtaining the required license
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
07/13/05.......................  Gould Pumps, Inc.    In the Matter of     Exported magnetic drive and double mechanical seal      764.2(a)[13]          Yes   Settlement                    No
                                                       Gould Pumps, Inc.    industrial pumps and parts to Egypt, Saudi Arabia,     764.2(g)[13]                 Agreement--civil
                                                                            India, Taiwan and the People's Republic of China                                    penalty of
                                                                            without the required licenses; made false statements                                $123,500
                                                                            on SEDs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
06/13/05.......................  Lufthansa German     In the Matter of     Aided and abetted the export and attempted export of    764.2(b)[1]            No   Settlement                    No
                                  Airlines             Lufthansa German     Cobalt-57 to the Department of Atomic Energy,          764.2(b)[1]                  Agreement--civil
                                                       Airlines             Directorate of Purchase and Stores, India, an          764.2(e)[1]                  penalty of $18,000
                                                                            organization on the BIS Entity List without the
                                                                            required licenses and with knowledge that a violation
                                                                            would occur
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/31/05.......................  Teledyne Energy      In the Matter of     Exported technical information on proposed power        764.2(a)[3]           Yes   Settlement                    No
                                  Systems, Inc.        Teledyne             plants to Bharat Heavy Electricals Ltd (``BHEL'') in                                Agreement--civil
                                                       Technologies, Inc.   New Delhi, India, an organization on the BIS Entity                                 penalty of $16,500
                                                                            List without the required licenses
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/30/05.......................  Air Tiger Express    In the Matter of     Aided and abetted the unlicensed exports of items       764.2(b)[9]            No   Settlement                    No
                                                       Air Tiger Express    subject to the EAR to organizations in India that                                   Agreement--civil
                                                                            were on the Entity List                                                             penalty of $49,500
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
03/14/05.......................  Rockwell             In the Matter of     Exported balancing machines to Malaysia, Mexico,        764.2(a)[11]          Yes   Settlement                    No
                                  Automation, Inc.     Rockwell             Venezuela without obtaining the required licenses;     764.2(g)[6]                  Agreement--civil
                                                       Automation, Inc.     made false statements on SED concerning authority to                                penalty of $46,750
                                                                            export; exported computer software and accessories to
                                                                            Bharat Heavy Electrical Limited, Hardwar, an
                                                                            organization on the BIS Entity List, without the
                                                                            required license; reexported software, data
                                                                            collectors and vibration monitors and associated
                                                                            parts from the United Kingdom to organizations listed
                                                                            on the Entity List without the required licenses
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
02/25/05.......................  Yarde Metals, Inc.   In the Matter of     Exported one aluminum plate to Vikram Sarahbai Space    764.2(a)[1]            No   Settlement                    No
                                                       Yarde Metals, Inc.   Center (VSSC) in India, an organization on the Entity                               Agreement--civil
                                                                            List without the required license                                                   penalty of $10,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
12/06/04.......................  Terra Universal      In the Matter of     Exported EAR99 items (12 stainless steel pass-through   764.2(a)[1]            No   Settlement                    No
                                  Inc.                 Terra Universal      chambers and accessories) to the Solid State Physics                                Agreement--civil
                                                       Inc.                 Laboratory, an organization on the BIS Entity List                                  penalty of $6,000
                                                                            without the required license
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/29/04.......................  E.A. Fischione       In the Matter of     Attempted to export EAR99 item (a plasma cleaner) to    764.2(c)[1]            No   Settlement                    No
                                  Instruments, Inc.    E.A. Fischione       an organization in India on the BIS Entity List                                     Agreement--civil
                                                       Instruments, Inc.    without the required license                                                        penalty of $6,300
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/24/04.......................  Shivram Rao          In the Matter of     Conspiracy to export EAR99 items (a thermal mechanical  764.2(d)[1]            No   Export privileges             No
                                                       MTS Systems          fatigue test system and a universal testing machine)   764.2(h)[2]                  denied for 10
                                                       Corporation          to the Indira Gandhi Centre for Atomic Research        764.2(g)[1]                  years for each
                                                                            (``IGCAR''), an organization on the BIS Entity List                                 (Default Judgment)
                                                                            without the required license; took actions to evade
                                                                            the Regulations by diverting the true ultimate
                                                                            consignee; made false statements in the course of an
                                                                            investigation
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/24/04.......................  Technology Options   In the Matter of     Conspiracy to export EAR99 items (a thermal mechanical  764.2(d)[1]            No   Export privileges             No
                                  (India) Pvt. Ltd.    MTS Systems          fatigue test system and a universal testing machine)   764.2(h)[2]                  denied for 10
                                                       Corporation          to the Indira Gandhi Centre for Atomic Research        764.2(g)[1]                  years for each
                                                                            (``IGCAR''), an organization on the BIS Entity List                                 (Default Judgment)
                                                                            without the required license; took actions to evade
                                                                            the Regulations by diverting the true ultimate
                                                                            consignee; made false statements in the course of an
                                                                            investigation
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/18/04.......................  Bernard A. Spear     In the Matter of     Exported EAR99 items (an amplifier, connector socket    764.2(a)[3]            No   Settlement                    No
                                                       Preston              and spare parts) to an organization in India on BIS    764.2(e)[3]                  Agreement--export
                                                       Scientific, Inc.     Entity List without the required licenses and with     764.2(g)[3]                  privileges denied
                                                                            knowledge that violations would occur; made false                                   for three years
                                                                            statements on SED; made false statement to OEE
                                                                            Special Agent in the course of an investigation
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/18/04.......................  Halear, Inc.         In the Matter of     Exported EAR99 items (an amplifier, connector socket,   764.2(a)[3]            No   Settlement                    No
                                                       Preston              and spare parts) to an organization in India on BIS    764.2(e)[3]                  Agreement--civil
                                                       Scientific, Inc.     Entity List without the required licenses and with     764.2(g)[3]                  penalty of
                                                                            knowledge that violations would occur; made false                                   $60,000; export
                                                                            statements on SEDs; made false statement to OEE                                     privileges denied
                                                                            Special Agent in the course of an investigation                                     for three years
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/12/04.......................  Bristol-Myers        In the Matter of     DuPont Merck exported and attempted to export Cobalt-   764.2(a)[1]            No   Settlement                    No
                                  Squibb Medical       DuPont Merck         57, iron foil, and potassium ferrocyanide to the       764.2(c)[1]                  Agreement--civil
                                  Imaging, Inc.,       Pharmaceutical       Department of Atomic Energy, Directorate of Purchase   764.2(e)[1]                  penalty of $16,200
                                  successor to         Company              and Stores, an organization on the Entity List
                                  Duport Merck                              without the required licenses and with knowledge that
                                  Pharmaceutical                            a violation would occur
                                  Company
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11/09/04.......................  PartMiner, Inc.      In the Matter of     Exported electronic components to organizations in      764.2(a)[14]          Yes   Settlement                    No
                                                       PartMiner, Inc.      India on the BIS Entity List without the required      764.2(g)[4]                  Agreement--civil
                                                                            licenses; failed to file SED; made false statements                                 penalty of $50,000
                                                                            on SED
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
10/27/04.......................  Symmetricom, Inc.,   In the Matter of     Exported cesium frequency standard equipment to         764.2(a)[2]            No   Settlement                    No
                                  successor to         Datum, Inc.          Malaysia without the required license; made false      764.2(g)[2]                  Agreement--civil
                                  Datum, Inc.                               statements on SEDs concerning the authority to         764.2(e)[1]                  penalty of $35,500
                                                                            export; exported ovenized quartz crystal oscillator
                                                                            to an organization in India on the Entity List
                                                                            without the required license and with knowledge that
                                                                            a violation would occur
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                   RECENT INDIA CASES
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Sections
          Order  Date                   Cases                         Charges                      Violated          Respondents            Result
--------------------------------------------------------------------------------------------------------------------------------------------------------
08/30/04.......................  In the Matter of     Exported animation system to the Space   764.2(a)[1].....  Chyron Corporation   Settlement
                                  Chyron Corporation   Application Center in Ahmedabad,        764.2(e)[1].....                        Agreement--civil
                                                       India, an organization on the Entity    764.2(g)[1].....                        penalty of
                                                       List, without the required license                                              $15,300
                                                       with knowledge that a violation of the
                                                       EAR would occur; made false or
                                                       misleading statement of material fact
                                                       in connection with the preparation of
                                                       an export control document
--------------------------------------------------------------------------------------------------------------------------------------------------------
08/30/04.......................  In the Matter of     Exported lab equipment, software and     764.2(a)[8].....  New Brunswick        Settlement
                                  New Brunswick        fermentor to the Directorate of         764.2(g)[2].....   Scientific Co.,      Agreement--civil
                                  Scientific Co.,      Purchase and Stores, Department of                         Inc                  penalty of
                                  Inc.                 Atomic Energy (DPS) in India, an                                                $51,000
                                                       organization on the Entity List,
                                                       without the required license; failed
                                                       to file a SEDs; exported fermentors to
                                                       Taiwan and Israel without the required
                                                       licenses; made false or misleading
                                                       statements of material fact in
                                                       connection with the preparation of an
                                                       export control documents
--------------------------------------------------------------------------------------------------------------------------------------------------------
06/24/04.......................  In the Mater of      Exported pulse generators to the         764.2(a)[5].....  Berkeley Nucleonics  Settlement
                                  Berkeley             Directorate of Purchase and Stores,     764.2(e)[5].....   Corporation          Agreement--civil
                                  Nucleonics           Department of Atomic Energy (DPS) in    764.2(g)[3].....   Administrative       penalty of
                                  Corporation          India and the Nuclear Power             764.2(c)[1].....   Penalty:             $40,000
                                                       Corporation, organizations on the
                                                       Entity List without the required                                               Criminal Penalty:
                                                       licenses, with knowledge that
                                                       violations of the Act would occur;                                               BNC: Five years'
                                                       made false or misleading statements of                                          probation and
                                                       material fact in connection with the                                            $300,000 criminal
                                                       preparation and submission of an                                                fine
                                                       export control document; failed to
                                                       file a SED; attempted to export from                                             Hamilton: Two
                                                       the United States to the DPS in India;                                          years' probation,
                                                       former BNC employees Richard Hamilton                                           a $1,000 criminal
                                                       and Vincent Delfino were also charged                                           fine, and 100
                                                       with export control violations                                                  hours of
                                                                                                                                       community
                                                                                                                                       service, and
                                                                                                                                       prohibited from
                                                                                                                                       engaging in or
                                                                                                                                       facilitating
                                                                                                                                       export
                                                                                                                                       transactions

                                                                                                                                        Delfino: Two
                                                                                                                                       years' probation,
                                                                                                                                       a $1,000 criminal
                                                                                                                                       fine, and 100
                                                                                                                                       hours of
                                                                                                                                       community
                                                                                                                                       service, and
                                                                                                                                       prohibited from
                                                                                                                                       engaging in or
                                                                                                                                       facilitating
                                                                                                                                       export
                                                                                                                                       transactions
--------------------------------------------------------------------------------------------------------------------------------------------------------
06/24/04.......................  In the Mater of The  Exported heat treating containers to     764.2(a)[4].....  The Sentry Company   Settlement
                                  Sentry Company       Bharat Dynamics Ltd., Hyderabad,                                                Agreement--civil
                                                       India, an organization on the Entity                                            penalty of
                                                       List without the required licenses                                              $25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
06/24/04.......................  In the Matter of     Exported nickel powder to Israel,        764.2(a)[45]....  Kennametal Inc.      Settlement
                                  Kennametal Inc.      Chile, Mexico, Peru, Taiwan, and India  764.2(g)[27]....                        Agreement--civil
                                                       without the required licenses; made     764.2(i)[3].....                        penalty of
                                                       false or misleading representation on                                           $262,500
                                                       SED concerning authority to export;
                                                       failed to retain export control
                                                       documents
--------------------------------------------------------------------------------------------------------------------------------------------------------
06/04/04.......................  In the Matter of     Caused the shipment of gas and fire      764.2(a)[6].....  General Monitors,    Settlement
                                  General Monitors,    detection equipment from the United     764.2(g)[12]....   Inc.                 Agreement--civil
                                  Inc.                 States to Bharat Heavy Electrical                                               penalty of
                                                       Limited of Hyderabad, India (BHEL), an                                          $40,000
                                                       organization on the Entity List
                                                       without the required licenses; made
                                                       false statements on Shippers Export
                                                       Declarations (SEDs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
04/14/04.......................  In the Matter of     Exported power dividers and low pass     764.2(a)[4].....  RLC Electronis,      Settlement
                                  RLC Electronics,     filters to the Indian Space Research    764.2(g)[1].....   Inc.                 Agreement--civil
                                  Inc.                 Organization (``ISRO''), Telemetry,                                             penalty of
                                                       Tracking and Command Network                                                    $30,000
                                                       (``ISTRAC''), Bangalore, India, an
                                                       organization on the Entity List
                                                       without the required licenses; filed a
                                                       Shippers Export Declaration with the
                                                       U.S. Government that represented
                                                       falsely that the power dividers
                                                       exported to ISRO were eligible for
                                                       export as NLR
--------------------------------------------------------------------------------------------------------------------------------------------------------
03/10/04.......................  In the Matter of     Caused the shipment of items subject to  764.2(a)[2].....  Atlas Copco          Settlement
                                  Atlas Copco          the EAR (seals and o-rings) to Bhrat                       Compressors Inc.     Agreement--civil
                                  Compressors Inc.     Heavy Electrical Limited, Hyderabad,                                            penalty of
                                                       Inda (BHEL), an organization on the                                             $13,000
                                                       Entity List; engaged in prohibited
                                                       conduct by submitting an export
                                                       license application to BIS that sought
                                                       authorization to ship items that had
                                                       already been shipped
--------------------------------------------------------------------------------------------------------------------------------------------------------
03/04/04.......................  In the Matter of     Caused the export of mass flow meters    764.2(a)[1].....  Alicat Scientific,   Settlement
                                  Alicat Scientific,   and power supplies to the Department                       Inc.                 Agreement--civil
                                  Inc.                 of Atomic Energy, Mumbia, India, an                                             penalty of
                                                       organization on the Entity List                                                 $7,000, $2,000
                                                                                                                                       suspended
--------------------------------------------------------------------------------------------------------------------------------------------------------
02/26/04.......................  In the Matter of     Exported metallized polyimide films to   764.2(a)[4].....  Dunmore Corporation  Settlement
                                  Dunmore              India without obtaining the required                                            Agreement--civil
                                  Corporation          authorization                                                                   penalty of
                                                                                                                                       $27,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
01/15/04.......................  In the Matter of     Attempted to export hydraulic stud       764.2(c)[1].....  Massive              Settlement
                                  Massive              tensioners to Bharat Heavy Electrical   764.2(e)[1].....   International        Agreement--civil
                                  International        Limited of Tiruchirapalli, India, an                       Incorporated         penalty of
                                  Incorporated         organization on the Entity List,                                                $13,000
                                                       without the required license with
                                                       knowledge that a violation of the EAR
                                                       would occur
--------------------------------------------------------------------------------------------------------------------------------------------------------
01/30/04.......................  In the Matter of     Exported a sputtering system to Solid    764.2(a)[1].....  Denton Vacuum, LLC   Settlement
                                  Denton Vacuum, LLC   State Physics Laboratory, New Delhi,    764.2(g)[1].....                        Agreement--civil
                                                       India, an organization of the Entity                                            penalty of $7,000
                                                       List; filed or caused to be filed a
                                                       SED that represented falsely that the
                                                       sputtering system was eligible for
                                                       export under the authority of GDEST
--------------------------------------------------------------------------------------------------------------------------------------------------------
11/12/03.......................  In the Matter of     Exported aluminum bars to India without  764.2(a)[17]....  Future Metals, Inc.  Settlement
                                  Future Metals,       the required export licenses, with      764.2(e)[17]....                        Agreement--civil
                                  Inc.                 knowledge that a violation of the Act,  764.2(i)[6].....                        penalty of
                                                       the Regulations, or any other, license                                          $180,000
                                                       or authorization; exported stainless
                                                       steel tubes to Hindustan Aeronautics
                                                       Limited, Engine Division, in India, an
                                                       organization of the Department of
                                                       Commerce Entity List; failed to retain
                                                       certain export control documents
--------------------------------------------------------------------------------------------------------------------------------------------------------
09/26/03.......................  In the Matter of     Attempted to export a Dash 10M data      764.2(c)[1].....  Astro-Med, Inc.      Settlement
                                  Astro-Med, Inc.      recorder to the Nuclear Power                                                   Agreement--civil
                                                       Corporation of India, an organization                                           penalty of $5,000
                                                       listed on BIS's Entity List, without
                                                       the required license
--------------------------------------------------------------------------------------------------------------------------------------------------------
07/17/03.......................  In the Matter of     Caused the export of items to            764.2(b)[33]....  DSV Samson           Administrative
                                  DSV Samson           organizations listed on the BIS Entity  764.2(e)[23]....   Transport, Inc.      Penalty:
                                  Transport, Inc.      List without the required license,      764.2(g)[3].....                         Settlement
                                                       with knowledge that the goods would be                                          Agreement--civil
                                                       exported in violation of the                                                    penalty of
                                                       Regulations; made false and misleading                                          $399,000
                                                       material misrepresentations on
                                                       Shipper's Export Declaration                                                   Criminal Penalty:
                                                       concerning the authority to export                                               $250,000
                                                                                                                                       criminal fine and
                                                                                                                                       five years'
                                                                                                                                       corporate
                                                                                                                                       probation
--------------------------------------------------------------------------------------------------------------------------------------------------------
11/08/01.......................  In the Matter of     Exported U.S.-origin ultraviolet fire    764.2(a)[2].....  Detector             Settlement
                                  Detector             detection systems to Bharat Heavy                          Electronics          Agreement--civil
                                  Electronics          Electrical Limited, an organization on                     Corporation          penalty of
                                  Corporation          the Entity List, without obtaining the                                          $15,000
                                                       required licenses
--------------------------------------------------------------------------------------------------------------------------------------------------------
04/26/01.......................  In the Matter of     Exported from the United States          764.2(a)[45]....  Quest Technologies,  Settlement
                                  Quest                chlorine and sulphur dioxide gas                           Inc.                 Agreement--civil
                                  Technologies, Inc.   sensors to Vietnam, Taiwan, India, the                                          penalty of
                                                       United Arab Emirates, Egypt, and Saudi                                          $225,000,
                                                       Arabia without obtaining the required                                           $135,000
                                                       licenses                                                                        suspended for one
                                                                                                                                       year
--------------------------------------------------------------------------------------------------------------------------------------------------------
03/15/01.......................  In the Matter of     Exported U.S.-origin Mask Aligner and    764.2(a)[1].....  Optical Associates,  Export privileges
                                  Optical              parts from the United States to Bhaba                      Inc.                 denied to India
                                  Associates, Inc.     Atomic Research Center, an entity on                                            for three years
                                                       the Department of Commerce Entity List
--------------------------------------------------------------------------------------------------------------------------------------------------------
02/02/98.......................  In the Matter of     Exported to the Department of Atomic     787.6[2]........  Coherent, Inc.       Settlement
                                  Coherent, Inc.       Energy, in India, U.S.-origin plasma                                            Agreement--civil
                                                       tubes for use in argon ion lasers                                               penalty of
                                                       without the required validated export                                           $20,000
                                                       licenses
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                               RECENT INDIA CASES
----------------------------------------------------------------------------------------------------------------
         Order  Date                   Parties                      Charges                     Sentences
----------------------------------------------------------------------------------------------------------------
11/18/05                       Fiber Materials, Walter  Conspiracy and violation of the  Lachman: Three years'
                                Lachman, Maurice         Export Administration Act        probation (first year
                                Subilia                  related to the unlicensed        in home detention);
                                                         export to India of equipment     $250,000 criminal fine
                                                         to manufacture carbon-carbon    Subilia: Three years'
                                                         components with applications     probation (first six
                                                         in ballistic missiles            months in community
                                                                                          confinement, followed
                                                                                          by one year in home
                                                                                          detention); $250,000
                                                                                          criminal fine
                                                                                         Fiber Materials:
                                                                                          $250,000 criminal fine
----------------------------------------------------------------------------------------------------------------
06/06/04                       In the Matter of         Exported to the Department of    Coherent, Inc.
                                Coherent, Inc.           Atomic Energy, in India, U.S.-
                                                         origin plasma tubes for use in
                                                         argon ion lasers without the
                                                         required validated export
                                                         licenses
----------------------------------------------------------------------------------------------------------------

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

   Information Submitted by the Center for Nonproliferation Studies, 
              Monterey Institute of International Studies

  nonproliferation issues raised by u.s.-india nuclear deal, march 2, 
                                  2006
    With few details yet known regarding the content of the agreement 
signed by U.S. President George W. Bush and Indian Prime Minister 
Manmohan Singh, it is too early to provide a comprehensive 
authoritative analysis and evaluation of the accord. Nonetheless, what 
has been initially disclosed about the pact raises a range of important 
issues, which will require further attention as the agreement is 
assessed by the U.S. Congress, the 45-member Nuclear Suppliers Group, 
and the broader international community.
    A fundamental question raised by the agreement is whether it 
strengthens or weakens efforts to curb the spread of nuclear weapons.
    Issue I: In explaining the agreement the Bush administration has 
stressed that India has enacted tough export control regulations, 
agreed to continue its moratorium on nuclear testing, agreed not to 
export sensitive uranium enrichment and plutonium separation 
(reprocessing) technologies, and to work with the United States on 
negotiating a global ban on the production of fissile material for 
nuclear weapons.

   An assessment will be needed of which of these undertakings 
        were already Indian policy prior to the July 18, 2005, Bush-
        Singh summit, where the contours of the March 2 agreement were 
        endorsed; which are required by international law, irrespective 
        of the March 2 agreement; and which are the product, 
        specifically of the March 2 agreement.

    Issue II: Under the agreement India will undertake to divide its 
nuclear facilities into civilian and military installations and to 
place the civilian facilities under International Atomic Energy Agency 
(IAEA) inspection, precluding their use for nuclear weapons. 
Information released on March 2 indicated that India will place 
approximately two-thirds of its nuclear installations under IAEA 
monitoring.

   An assessment will be needed as to whether the division 
        between civilian and military facilities constrains Indian 
        nuclear weapons production capabilities or leaves such 
        capabilities intact, or actually facilitates India's ability to 
        produce more fissile material.

    Issue III: Based on available information, a number of nuclear 
power reactors, using Canadian-supplied technology, will not be placed 
under IAEA inspection, but will be placed on India's military list, 
intended for use in the country's nuclear weapons program. These 
facilities can be used both to produce electricity and weapons-quality 
plutonium.

   An assessment will be needed as to whether the division 
        means that technology originally supplied by outside states 
        that was intended for peaceful uses will now be used for 
        military purposes. If India has now declared a diversion of 
        technology from peaceful to military use, an assessment will be 
        required as to whether India can be expected to reliably abide 
        by future civil nuclear trade agreements.

    Issue IV: It appears that plutonium (separated and in spent fuel) 
that was created previously in reactors that will now be placed under 
IAEA inspection will not, itself, be subject to inspection. This will 
provide a substantial stockpile of material for the enlargement of the 
Indian nuclear weapons arsenal.

   An assessment will be needed of the impact of this 
        uninspected stockpile of material on the overall dimensions of 
        the March 2 agreement.

    Issue V: It appears that new civil nuclear cooperation by the 
United States and other members of the Nuclear Suppliers Group could 
provide uranium supplies for the Indian nuclear power program that will 
enable India to use more limited indigenous uranium supplies for 
nuclear weapons.

   An assessment will be needed of whether such assistance from 
        the United States would violate its obligation under the 
        nuclear Nonproliferation Treaty to ``not in any way to assist, 
        encourage, or induce any non-nuclear weapon State to 
        manufacture or otherwise acquire nuclear weapons or other 
        nuclear explosive devices. . . .'' Other nuclear supplier 
        states have similar obligations.

    Issue VI: Ending the nuclear trade embargo against India could 
create important precedents.

   An assessment will be needed as to whether the United 
        States-India agreement: Will encourage other similarly situated 
        states, such as Pakistan, to seek comparable exceptions from 
        existing international rules of nuclear commerce; will 
        encourage other states, such as Iran, to leave the nuclear 
        Nonproliferation Treaty; will encourage states like Brazil, 
        which joined the NPT in the expectation that this would provide 
        access to civil nuclear technology denied to states outside the 
        treaty, to reconsider their support for the treaty.

    Issue VII: More broadly, in promoting the agreement, the Bush 
administration has emphasized that it is a key factor in cementing 
United States-Indian relations on such important issues as meeting the 
threat of radical Islam and serving as a military counterweight to 
China.

   With United States-Indian relations already flourishing, 
        including in the area of defense cooperation, an assessment 
        will be needed as to whether the agreement is central to the 
        enhancement of United States-Indian strategic relations or 
        merely an additional, nonessential element in improving ties 
        between the two nations.

                               __________

       India and the New Look of U.S. Nonproliferation Policy\1\

      (By William C. Potter, Center for Nonproliferation Studies)

    The old football adage ``You can't tell the players without a 
program'' applies increasingly to the international politics of 
nonproliferation. Gone are the days when the United States routinely 
lined up on the side of those pursuing the goal of halting and 
reversing the spread of nuclear weapons. This change in Washington's 
nonproliferation game plan has been underway for some time, but was 
most clearly expressed in the July 18, 2005, India-United States Joint 
Statement. This extraordinary document, which reverses more than a 
quarter century of U.S. declaratory policy, suggests that the national 
security team of George W. Bush regards nuclear proliferation to be 
both inevitable and not necessarily a bad thing.
    In light of the magnitude of this policy shift and its potential to 
impact negatively on the NPT, associated nonproliferation institutions, 
and even elements of the President's own nonproliferation initiatives, 
one would have expected the policy announcement to follow a careful and 
systematic review of the costs and benefits of the proposed change. A 
rational decision would have required input from all of the major 
governmental players with nonproliferation responsibilities, including 
the senior officials in charge of nonproliferation policy in the 
Departments of State and Energy. In fact, however, the new policy 
appears to have been formulated without a comprehensive high-level 
review of its potential impact on nonproliferation, the significant 
engagement of many of the government's most senior nonproliferation 
experts, or a clear plan for achieving its implementation. Indeed, the 
policy shift bears all the signs of a top-down administrative directive 
specifically designed to circumvent the interagency review process and 
to minimize input from any remnants of the traditional 
``nonproliferation lobby.''\2\
                      what precisely has changed?
    U.S. nuclear export policy has undergone at least three major 
transformations since 1945. An initial emphasis on secrecy and denial, 
highlighted by the 1946 Atomic Energy Act, gave way in 1954 to the 
active promotion internationally of peaceful uses of atomic energy. 
This phase came to an end in 1974 following the Indian detonation of a 
``peaceful nuclear explosion'' and the adoption by the United States of 
an export policy emphasizing technology control. Although Washington's 
public rebuke of India was mild, the Indian explosion not only led to a 
major revision in U.S. thinking about nuclear exports, but it had the 
effect of moving nonproliferation from the periphery toward center 
stage on Washington's foreign policy agenda. One consequence of the 
change in priority was intensification of U.S. diplomatic efforts to 
establish strict guidelines for the major nuclear exporting states 
covering the transfer of nuclear fuel and sensitive technology. An 
important multinational initiative--the Nuclear Suppliers Group (NSG)--
was mobilized for this purpose.
    The NSG politically obligates its 45 members to pursue two sets of 
guidelines for nuclear and nuclear-related dual-use exports. Central to 
the guidelines, which like other aspects of NSG policy were adopted by 
consensus, is the principle that only NPT parties or other states with 
comprehensive (``full-scope'') safeguards in place should benefit from 
nuclear transfers. It is this principle of comprehensive safeguards as 
a condition for export, which the United States labored long and hard 
to persuade the NSG to adopt, that will have to be abandoned if the 
India-United States Joint Statement is implemented.
    The key provision of the joint statement that will necessitate a 
fundamental change in U.S. nuclear export policy is the promise by the 
U.S. President that he will seek to adjust U.S. laws and policies, as 
well as international regimes, to enable full civil nuclear energy 
cooperation and trade with India. These adjustments are necessary since 
India does not have full-scope safeguards in place and is one of only 
four states (along with Israel, Pakistan, and North Korea) that remain 
outside of the Treaty on the Nonproliferation of Nuclear Weapons (NPT). 
By promising that the United States will work to achieve full civil 
nuclear cooperation with India, President Bush has announced, for all 
practical purposes, that technology control is no longer the 
cornerstone of U.S. nuclear export and nonproliferation policy. 
Instead, it has given way to a strategy in which politics has primacy 
and regional security and international economic objectives trump those 
of nonproliferation. Although this shift is not the first time 
nonproliferation objectives have been subordinated to other U.S. 
foreign policy considerations, it represents the most radical change in 
recent nuclear export policy.
                  the underpinnings of the new policy
    It always is dangerous to attribute much rationality to the process 
by which policy changes or to assume that policy will be internally 
consistent. Moreover, as suggested above, it is not obvious that 
nonproliferation considerations were given much weight in the decision 
to alter U.S. policy toward India. Nevertheless, to the extent that 
assumptions about proliferation influenced the shift in U.S. policy, 
they would appear to include the following perspectives:\3\
    1. Nuclear proliferation is inevitable; at best it can be managed, 
not prevented. According to this perspective, nuclearization of the 
Indian subcontinent should have been anticipated and cannot be 
reversed. Although the pace of nuclear weapons spread globally has been 
much slower than predicted, we are approaching a new ``tipping point'' 
in which a number of second tier states may ``go nuclear.'' U.S. policy 
to counter proliferation must be selective. In those instances in which 
the United States cannot prevent nuclear weapons spread, it can and 
should seek to influence the development of responsible nuclear weapons 
policies on the part of new nuclear nations that are consistent with 
U.S. national interests, including the adoption of enhanced safety and 
security procedures and practices.
    2. There are good proliferators and bad proliferators. U.S. 
decisionmakers and scholars generally have viewed the spread of nuclear 
weapons negatively. This perspective has persisted for most of the 
post-World War II period and has not varied greatly regardless of the 
orientation of the prospective proliferator. Throughout most of the 
1970s and 1980s, for example, U.S. nonproliferation declaratory policy 
remained adamantly opposed to the spread of nuclear weapons despite the 
fact that many of the countries of greatest proliferation concern--
states such as Argentina, Brazil, Israel, South Africa, Taiwan, South 
Korea, and even India and Pakistan--were either friends of the United 
States, or at least not its adversaries. This prevailing perspective 
continued during the 1990s at a time when the number of states of 
proliferation concern diminished but were seen to be more anti-American 
in orientation (e.g., Iraq and Iran). A minority viewpoint, however, 
has long questioned the assumption that proliferation necessarily was 
undesirable. Kenneth Waltz, in particular, popularized the view that 
the spread of nuclear weapons may promote regional stability, reduce 
the likelihood of war, and make wars harder to start.\4\ Although it is 
not obvious that the proponents of a reorientation in U.S. policy 
toward India have been directly influenced by Waltz's arguments, the 
India-United States Joint Statement indicates more clearly than ever 
before that Washington is not opposed to the possession of nuclear 
weapons by some states, including those outside of the NPT.\5\ This new 
policy of nonproliferation exceptionalism is far more explicit and 
pronounced than prior routine efforts by the United States and its 
allies to deflect criticism of Israel's nuclear policies in different 
international fora. As one defense expert close to the administration 
reportedly put it, unlike the Clinton administration which ``had an 
undifferentiated concern about proliferation,'' the Bush administration 
is not afraid to distinguish between friends and foes.\6\
    3. Multilateral mechanisms to prevent the spread of nuclear weapons 
are ineffectual. The Bush administration has consistently exhibited a 
strong preference for foreign policy and military tools that are 
unconstrained by the need to seek approval from international 
organizations or multilateral bodies be they the IAEA, the U.N. 
Security Council, or even NATO. This general orientation applies with 
equal force to the nonproliferation sphere, and was in evidence at the 
2005 NPT Review Conference in which the United States invested few 
resources, was ill-prepared, and lacked even a realistic vision about 
what would constitute a productive outcome. For those inclined to be 
dismissive of the utility of multilateral instruments, the inability of 
the unwieldy NPT body to agree on any nonproliferation measures must 
have reinforced their prior conviction that nonproliferation progress 
will only be achieved by unilateral action or streamlined ``coalitions 
of the willing.'' Ironically, in light of the changes it has promised 
to seek pursuant to the joint statement, the one established 
multilateral nonproliferation body that the Bush administration had 
sought to strengthen recently was the NSG.
    4. Regional security and economic considerations trump those of 
global nonproliferation. Diplomats and scholars have long struggled 
with the problem of how best to enhance nuclear stability in South Asia 
without appearing to reward those few states not party to the NPT--the 
most widely subscribed-to treaty in the world. Compounding this dilemma 
is the difficulty of reconciling the reality that India, Israel, and 
Pakistan possess nuclear weapons with the language of Article IX of the 
NPT that explicitly restricts nuclear weapon status to those five 
states which manufactured and exploded a nuclear weapon prior to 
January 1, 1967. The India-United States Joint Statement essentially 
resolves the dilemma by ignoring how other states may interpret the 
repudiation by the United States of existing domestic law and 
international political obligations regarding nuclear trade with a non-
NPT state. It does so, presumably, because the powers that be in 
Washington have determined that a combination of international 
political and economic objectives takes precedence over 
nonproliferation considerations. Although these objectives have not yet 
been publicly enunciated by the administration, there is good reason to 
believe that they include the conviction that a substantial Indian 
nuclear arsenal will serve U.S. interests in Asia in the future vis-a-
vis a more assertive and powerful China.
    The convergence of United States and Indian national security 
interests vis-a-vis China is emphasized by Robert Blackwill, U.S. 
Ambassador to India during President Bush's first term and often cited 
as the most influential proponent of the shift in U.S. policy toward 
lndia.\7\ According to Blackwill, there are ``no two [other] countries 
which share equally the challenge of trying to shape the rise of 
Chinese power.''\8\
    This argument is made even more explicitly by Ashley Tellis in a 
report issued by the Carnegie Endowment for International Peace four 
days before the joint statement by President Bush and Prime Minister 
Singh.\9\ According to Tellis, who served as Senior Policy Advisor to 
Blackwill during his tenure in India and is also credited to be one of 
the principal intellectual architects of the new U.S. policy, it would 
be a mistake to attempt to integrate India ``into the nonproliferation 
order at the cost of capping the size of its eventual nuclear 
deterrent.''\10\ To do so would be ``to place New Delhi at a serious 
disadvantage vis-a-vis Beijing, a situation that could not only 
undermine Indian security but also U.S. interests in Asia in the face 
of the prospective rise of Chinese power over the long term.''\11\ To 
his credit, Tellis openly acknowledges the fundamental danger to the 
global nonproliferation regime posed by the shift in U.S. policy that 
his report anticipated. However, he believes the risk is manageable and 
is justified by U.S. geopolitical interests that transcend 
nonproliferation.
    In this regard, it should be noted that some elements of the new 
U.S. policy toward India have antecedents in which nonproliferation 
considerations in South Asia also took a back seat to other foreign 
policy and national security objectives. This situation prevailed vis-
a-vis Pakistan throughout most of the 1980s following the Soviet 
invasion of Afghanistan. It also can be discerned after 9/11 in the 
less than forceful manner in which the United States has pressed 
Pakistan to reveal the full scope of the AQ Khan network. Prior to the 
July 18 joint statement, however, the tradeoffs between pursuing global 
nonproliferation objectives and those of regional security were never 
linked as directly or publicly.
                   what are the likely consequences?
    It is difficult to isolate the nonproliferation impact of the 
India-United States Joint Statement from a number of other 
developments. It also is premature to assess the longer term 
nonproliferation consequences of the reorientation in U.S. policy 
toward India. To some extent, the impact of the July statement will 
depend on its implementation by Washington and New Delhi, how widely it 
is emulated and/or supported by other major states, and the degree to 
which it is reflected in further departures from traditional U.S. 
nonproliferation policy. Nevertheless, one can venture a number of 
hypotheses about how the turn in U.S. policy may affect the 
international dynamics of nonproliferation.
Erode the NPT
    One of the most influential studies of U.S. nuclear 
nonproliferation policy adopted as a guiding principle Florence 
Nightingale's admonition that ``Whatever else hospitals do they should 
not spread disease.''\12\ Although the joint statement purports to 
encourage more prudent nonproliferation behavior by India, it is far 
more likely to promote the further spread of nuclear weapons by eroding 
the norm of nonproliferation embodied in the NPT. It is apt to have 
this effect by reinforcing doubts by many NPT members about the 
commitments by the nuclear weapon states (NWS) to their treaty 
obligations and the benefits the nonnuclear weapon states (NNWS) derive 
from the treaty.
    The timing of the joint statement, coming on the heels of the 
disappointing and largely unproductive 2005 NPT Review Conference, will 
be perceived by many states as further evidence that the United States 
cannot be counted on to honor its nonproliferation obligations. 
Contributing to this view is the not unrealistic assessment on the part 
of many NPT members that U.S. policy in the leadup to the Review 
Conference and during its negotiation was characterized by relatively 
low-level and inexperienced representation, inadequate preparation, 
little interagency coordination, inconsistent policy implementation, 
and little concern for the consequences of a failed conference. NPT 
members also will not overlook the parallels between the U.S. readiness 
to disavow political commitments it undertook with respect to arms 
control and disarmament at the 2000 NPT Review Conference (i.e., the 
``13 Practical Steps'') and the further disavowals that the joint 
statement will require if it is implemented. These pertain to the 
Decision on Principles and Objectives for Nuclear Non-Proliferation and 
Disarmament taken at the 1995 NPT Review and Extension Conference that 
``New supply arrangements . . . should require as a necessary 
precondition, acceptance of IAEA full-scope safeguards and 
internationally legally binding commitments not to acquire nuclear 
weapons or other nuclear explosive devices'' (paragraph 12), and the 
reaffirmation of this principle at the 2000 NPT Review Conference. 
Given this recent proclivity by the United States to interpret 
selectively its NPT and NSG obligations, other NPT members may 
reasonably question the value Washington attaches to the current fabric 
of nonproliferation treaties, regimes, and guidelines and reduce their 
own investments in nonproliferation accordingly. How, one may ask, does 
the United States persuade Malaysia, Indonesia, Sri Lanka, Pakistan, or 
China to strengthen their nuclear export controls when it announces its 
intention to weaken its own nuclear export regulations?
    The joint statement also is apt to be reviewed particularly closely 
and critically by a number of NPT members who themselves previously 
possessed nuclear weapons or pursued their acquisition. Although the 
United States did not formally recognize India as an nuclear weapon 
state in the joint statement, the voluntary nature of IAEA safeguards 
that the Indian Prime Minister agreed to accept and the limitation of 
these safeguards to India's civilian nuclear program convey the 
impression that the United States is prepared to treat India for some 
purposes as it does other nuclear weapons states recognized by the NPT. 
This change in posture, which will almost certainly be viewed by most 
states as a reward to India for its nuclear weapons tests, is apt to be 
resented strongly by countries such as South Africa and Ukraine that 
previously claimed nuclear weapons but relinquished them in order to 
join the NPT as NNWS. It will be regarded with equal resentment by 
regional powers such as Argentina, Brazil, and Egypt that explored a 
nuclear weapons option, but voluntarily chose to forego that 
possibility in favor of membership in the NPT.
    It is reasonable to assume that these and other states that at one 
time or another seriously contemplated and/or pursued military nuclear 
programs may reconsider the wisdom of their prior nonproliferation 
decisions in light of the new U.S. posture toward India. A similar 
reassessment of the value of the NPT for their national security may be 
undertaken by a set of NNWS that have not actively pursued a nuclear 
weapons option, but made explicit the conditionality of their NPT 
membership on assurances that the international community would not 
recognize any additional NWS. Japan is perhaps the best example of this 
group. Not only has it has been the most consistent and outspoken 
critic of the Indian and Pakistani nuclear tests, but its senior 
officials repeatedly have emphasized that if the assurances Japan 
received prior to joining the NPT were not honored, it would have to 
reconsider the role of the treaty in promoting its security. The point 
to emphasize in this regard is not that Japan or any other state 
necessarily will repudiate their NPT membership as a direct consequence 
of the shift in U.S. policy toward India, but rather to acknowledge 
that decisionmaking about nonproliferation is a dynamic process that 
does not end with accession to the NPT. Just as U.S. policy preferences 
regarding nonproliferation may change over time, so may of those 
countries that currently adhere to the NPT as nonnuclear weapon states.
    The shift in U.S. policy toward India also coincides with growing 
frustration by many nonnuclear weapons states with the pace of nuclear 
disarmament and the commitment on the part of the nuclear weapon states 
to their Article VI legal obligations, as well as those political 
commitments assumed under the 1995 Decision on Principles and 
Objectives and the 13 Practical Steps of the 2000 NPT Review Conference 
final declaration. If, as is likely, the reorientation in U.S. policy 
toward India is embraced, or at least accepted, by the four other NWS 
parties to the treaty, one or more NNWS may decide that dramatic action 
is required to demonstrate the erosion of the NPT and its diminished 
value as a means to achieve disarmament. Although the joint statement 
by itself is unlikely to lead directly to the defection by one of these 
disenchanted NNWS, it could provide further impetus for such an act by 
a country such as Mexico or Egypt. In the case of Mexico, the defiant 
action almost certainly would be only symbolic. In the Egyptian case, 
however, a desire to highlight the disarmament shortcomings of the NPT 
may coincide with other less symbolic reasons for leaving the treaty, 
including dissatisfaction with the lack of implementation of the 1995 
resolution on the Middle East and wariness in Cairo that Iran has 
embarked on a dedicated nuclear weapons program. If, as a consequence 
of the joint statement, Egyptian decisionmakers perceive the costs of 
leaving the NPT to be diminished, their overall nonproliferation 
calculus could be significantly altered.
Undermine Efforts To Strengthen Export Controls
    On February 11, 2004, President Bush gave a major address at 
National Defense University in which he outlined a new nonproliferation 
strategy. A key component of his proposal was to close a perceived 
loophole in Article IV of the NPT that enables NNWS to acquire all 
forms of nuclear technology, including sensitive uranium enrichment and 
plutonium reprocessing facilities, as long as they are under IAEA 
safeguards and are used exclusively for peaceful purposes. In 
particular, President Bush called on the Nuclear Suppliers Group to 
tighten its export control guidelines by prohibiting the export of 
enrichment and reprocessing technology and equipment to countries that 
do not already operate enrichment and reprocessing plants. This 
initiative, prompted in particular by Iran's pursuit of a uranium 
enrichment capability, appeared to attach increasing importance to the 
NSG as a primary antiproliferation mechanism that might compensate in 
part for deficiencies in the less flexible NPT. The President's 2004 
proposal also was consistent with U.S. efforts to strengthen the NSG 
throughout much of its existence, including successful efforts to fend 
off attempts by Russia in recent years to dilute the body's guidelines 
by creating a special nuclear export exception for India. The tough 
U.S. stance on exports, apparent as late as the last NSG meeting in 
June 2005, actually appeared to yield some results as Russia, in what 
one commentator described as a ``fit of lawabidingness,'' reluctantly 
told India in late 2004 that it could no longer supply nuclear fuel for 
two reactors at Tarapur because of NSG constraints.\13\
    No doubt, policymakers in Russia feel vindicated by the shift in 
U.S. policy signaled by the July 2005 joint statement. Nuclear vendors 
in France and a number of other NSG states that have long eyed the 
market opportunities in India also will applaud the new U.S. approach 
and can be expected to encourage their governments to support the 
creation of a special export regime for India under the NSG even if it 
means establishing the principle of exceptionalism.\14\ Although 
numerous NSG members are likely to have major reservations about the 
negative nonproliferation impact of nuclear exports to a non-NPT state, 
most are likely to hold their noses and not overtly oppose Washington's 
efforts to modify the NSG export guidelines. According to several U.S. 
officials who asked not to be named, ultimately the NSG will adopt the 
change in policy advocated by the United States, although at the cost 
of undermining the ability of President Bush to achieve what had been 
the priority objective of limiting exports of uranium enrichment 
technology and equipment.\15\
    Already Iranian nuclear negotiators have pointed out the 
inconsistency of U.S. efforts to deny enrichment technology to a NNWS 
party to the NPT while supporting nuclear trade with a non-NPT state 
that has a dedicated and demonstrated nuclear weapons program. The 
tenuous logic of the new U.S. position also is not apt to be lost on 
the DPRK or some NPT NNWS that would like to acquire dual use 
technology capable of producing weapons grade fissile material under 
the guise of a civilian nuclear energy program. In addition, one must 
assume that new NSG members such as China will find it much more 
difficult to internalize the argument about the importance of stringent 
nuclear exports when U.S. policy is applied in an exceptionalist 
fashion. A Congressional Research Service Report for Congress, for 
example, observes that the United States-India nuclear cooperation 
could prompt other suppliers, like China, to justify nuclear exports to 
Pakistan.\16\
                       can one limit the damage?
    It is unrealistic to assume that the Bush administration will 
acknowledge that nonproliferation instruments and norms have been 
weakened as a result of the India-United States Joint Statement or 
attempt to repair the damage that already has been done. It also is 
unlikely that Congress will challenge the President directly on his 
initiative, particularly if it is cast in terms of power politics vis-
a-vis China. The administration, however, does not yet appear to have a 
clear plan about how to obtain the changes in, or waivers of, complex 
U.S. domestic law governing nuclear exports; nor can it be assured that 
Congress will be prepared to support either Presidential waivers or 
amendments to relevant provisions of the Atomic Energy Act prior to 
implementation by India of the safeguards commitments Prime Minister 
Singh pledged to undertake under the terms of the joint statement.\17\ 
At a minimum, before acting on the administration's request, Congress 
should insist that India implement its safeguards commitments and 
pledge to continue to honor all prior legal understandings regarding 
U.S. nuclear transfers, including U.S. prior consent.\18\ Although the 
administration is apt to resist an attempt by Congress to attach any 
additional conditions to the joint statement, it would be appropriate 
for Congress to call attention to the conspicuous absence in the joint 
statement of any commitment by India to cease production of fissile 
material for weapons purposes and to express the sense of Congress that 
such a pledge should be forthcoming before the United States is 
prepared to resume nuclear trade.
    The Bush administration is apt to meet resistance initially at the 
NSG, which operates on the principle of consensus, to create a separate 
export control regime for India. Critics of the new approach will 
remind Washington of its own powerful arguments against such a move, 
and some NNWS members of the NSG, such as South Africa, Germany, and 
Canada, may oppose an exceptionalist approach as it will appear to 
devalue the benefits of NNWS membership in the NPT. Although it would 
be desirable for the NSG to resist the Bush administration's new plan, 
ultimately Washington is apt to get its way, particularly given the 
support its proposal will have from Russia, France, and possibly other 
NWS. This victory, however, is likely to be at the cost of losing any 
prospect for obtaining the restrictions it previously sought on the 
export of uranium enrichment and reprocessing technology and equipment. 
The best that can be hoped for from a nonproliferation perspective, is 
that NSG members can be persuaded that indeed India is an exceptional 
case and that similar exceptions should not be granted to other states 
that are outside of the NPT and do not subscribe to full-scope 
safeguards. Ashley Tellis, for example, argues that ``[s]eeking 
exceptions while still trying to maintain universal goals need not 
weaken the larger nonproliferation order if the United States uses its 
power artfully to bring along leading countries within the regime. . . 
.''\19\ That expectation, however, probably is unrealistic given the 
less than artful exercise of power typically displayed by the United 
States, the precedent that the Indian case will set, and the history of 
nuclear trade between other NSG and non-NPT members (e.g., China and 
Pakistan).
    The Bush administration has avoided commentary on the possible 
impact of the joint statement on Indian-Pakistani relations. Although 
it is not obvious how the new U.S. stance toward India will enhance 
regional stability in South Asia, that objective needs to be pursued as 
a priority, as does the goal of improving the security of both nuclear 
weapons and fissile material. If the joint statement provides the 
United States with additional leverage to influence the nuclear posture 
of India and to reinforce prudent practices with respect to securing 
nuclear weapons and material, that opportunity should be exploited. In 
particular, the United States should discourage strongly any further 
expansion of the Indian nuclear arsenal and the production of 
additional fissile material for that purpose. India and Pakistan also 
both should be encouraged to refrain from nuclear weapon practices that 
could reduce crisis stability and prompt rapid employment of nuclear 
arms. Although the joint statement also should be utilized to reinforce 
India's prior good behavior in the nuclear export sphere, the far 
greater risk of imprudent exports resides in Pakistan, and it is not 
apparent how the new U.S. approach to India will improve Pakistani 
practices with respect to either nuclear exports or the safeguarding of 
its nuclear assets.
    A number of the more harmful nonproliferation outcomes identified 
above could be mitigated were India and the United States to 
demonstrate that as part of their new strategic relationship they also 
were committing themselves or strengthening their existing commitments 
to a number of disarmament and nonproliferation measures highly valued 
by most members of the international community. Although there is no 
prospect that either state will undertake what would be the most 
powerful and significant gesture--ratification of the Comprehensive 
Test Ban Treaty--it is conceivable, if unlikely, that several more 
modest but important measures could be supported. Both countries, for 
example, should express their support for an indefinite moratorium on 
nuclear testing. India also should agree to a moratorium, already in 
place for the United States, on the production of fissile material for 
military purposes, and both countries should support the conclusion of 
a verifiable Fissile Material Cut-Off Treaty. In addition, Washington 
should initiate the return to the United States of the small number of 
nonstrategic nuclear weapons currently deployed in Europe and propose 
steps to reduce its stockpile of nuclear warheads in addition to its 
deployed weapons.\20\ Although implementation of these measures by 
India and the United States would not rectify all of the negative 
nonproliferation consequences of the joint statement, it would help to 
replenish what currently is a serious disarmament and nonproliferation 
credibility deficit in both countries.
                              conclusions
    In terms of nonproliferation, the best that reasonably can be 
expected to result from the India-United States Joint Statement is a 
one-time detour by the United States on the road toward promoting 
universal adherence to the objectives of the NPT. Sadly, this ``best 
case'' interpretation is more likely to be correct if, in fact, the 
recent decision to reverse policy on India was made in haste without 
due input from senior officials with nonproliferation responsibilities 
and with little regard to nonproliferation considerations. In that 
case, it is possible that the course of U.S. nonproliferation policy 
has not yet been fully determined and may constitute less of a break 
with traditional policy than has been suggested in this article. One 
indication of this tendency would be a disavowal by the Bush 
administration of its commitments under the joint statement if there is 
inaction or backsliding by India in its promised undertakings.
    Some backsliding by both the United States and India is probably 
inevitable given complaints in both countries about who has to do what 
first. If treated as a target of opportunity, this slippage actually 
might be a good thing. It could afford the United States the 
opportunity to refurbish its nonproliferation credentials while still 
offering India the prospect of greater cooperation in the realm of 
nuclear safety and security, as well as research in nuclear fusion for 
power generation. Such a package could be crafted creatively so as not 
to collide directly with the NPT and the NSG, and could serve as a 
basis for similar arrangements with Pakistan.
    To return to the football analogy, it is now an appropriate moment 
to call timeout. It is not too late to change the game plan. The stakes 
are very high and neither the United States nor the international 
community can afford to lose this nonproliferation match.

------------
Endnotes:

    \1\The author is grateful to Gaurav Kampani, Jean duPreez, Scott 
Parrish, Lawrence Scheinman, Nikolai Sokov, Leonard Spector, and 
Jonathan Tucker for their comments on an earlier draft of this paper.
    \2\Telephone interviews by the author and other CNS staff with U.S. 
government officials (names withheld by request), July 19, 2005, and 
July 25, 2005. Gaurav Kampani compares the strategic shift and the 
manner in which it was accomplished to Kissinger's opening with China. 
Gaurav Kampani, correspondence with author, August 13, 2005.
    \3\A number of these assumptions are shared by actors other than 
those wielding power in the Bush administration and several variants of 
them also found expression during the Clinton administration.
    \4\See Kenneth N. Waltz, ``The Spread of Nuclear Weapons: More May 
Be Better,'' Adelphi Paper 171 (London: International Institute for 
Strategic Studies, 1981). For an updated version of Waltz' argument see 
Scott D. Sagan and Kenneth N. Waltz, ``The Spread of Nuclear Weapons: A 
Debate Renewed'' (New York: Norton, 2003).
    \5\One prominent advocate for the new policy who is familiar with 
Waltz' arguments is Ashley J. Tellis. See his important study, 
``India's Emerging Nuclear Posture'' (Santa Monica, CA: RAND, 2001).
    \6\Defense Science Board Chairman William Schneider quoted by 
Edward Alden and Edward Luce, ``A New Friend is Asia,'' The Financial 
Times (August 21, 2001), http://globalarchive.ft.com/globalarchive/
articles.html.
    \7\See, for example, Dana Milbank and Dafna Linzer, ``U.S., India 
May Share Nuclear Technology,'' Washington Post (July 19, 2005) and 
Zlatica Hoke, ``U.S. and India Getting Closer Than Ever,'' Voice of 
America New Analysis (July 22, 2005).
    \8\Robert Blackwill quoted in Hoke, ``U.S. and India Getting 
Closer.'' See also, the Honorable Robert Blackwill, ``Why is India 
America's Natural Ally?'' In the National Interest (May 2005), http://
www.inthenationalinterest.com/Articles/May%202005/
May2005BIackwill.html.
    \9\See Ashley J. Tellis, ``India As a New Global Power'' 
(Washington, DC: Carnegie Endowment for International Peace, 2005).
    \10\Ibid, p. 25: For relevance to Tellis' role in the plan to 
change U.S. policy, see Milbank and Linzer.
    \11\Ibid. Consistent with this perspective is the absence in the 
Joint Statement of any commitment by India to stop production of 
fissile material for weapons.
    \12\ Albert Wohlstetter et al., ``Moving Toward Life in a Nuclear 
Armed Crowd?'' Report to the U.S. Arms Control and Disarmament Agency 
(Los Angeles: Pan Heuristics, 1976, p. 1. A revised version of the 
report was published as ``Swords from Plowshares'' (Chicago: University 
of Chicago Press, 1979).
    \13\See Henry Sokolski, ``The India Syndrome: U.S. Nonproliferation 
Policy Melts Down,'' The Weekly Standard (August 1, 2005).
    \14\Great Britain already has moved in this direction by announcing 
its intent to alter its nuclear export laws consistent with 
Washington's wishes. See ``Britain To Ease Sanctions Against India,'' 
The Hindu (8-12-05) and Ashish Kumar Sen, ``Nuclear Battle Lines 
Drawing,'' India Monitor (August 14, 2005).
    \15\Telephone and personal interviews by CNS staff in the week 
following the July 18th Joint Statement.
    \16\See Sharon Squassoni, ``U.S. Nuclear Cooperation With India: 
Issues for Congress,'' CRS Report for Congress (Washington, DC: The 
Library of Congress, July 29, 2005), p. 7, http://www.fas.org/sgp/crs/
row/RL33016.pdf.
    \17\See Dennis M. Gormley and Lawrence Scheinman, ``Implications of 
Proposed India-U.S. Civil Nuclear Cooperation,'' NTI Issue Brief, July 
2005, www.nti.orq.
    \18\On the issue of prior consent, see Sokolski, ``The India 
Syndrome.''
    \19\Tellis, ``India As a New Global Power,'' p. 27.
    \20\These recommendations are consistent with the concept of a 
global ``disarmament roadmap'' for both NPT and non-NPT parties 
proposed by IAEA Director General Mohamed ElBaradei. See Mohamed 
ElBaradei, ``Nuclear Non-Proliferation: Global Security in a Rapidly 
Changing World,'' Carnegie Endowment Non-Proliferation Conference, 
Washington DC (June 21, 2004).


                The U.S.-India Deal ``Separation Plan''


                        OPEN LETTER TO CONGRESS

   (Experts in Support of the U.S.-India Civilian Nuclear Initiative)

 congress should enact enabling legislation authorizing the sharing of 
                 civilian nuclear technology with india
Executive Summary
   Congress should enact enabling legislation authorizing the 
        sharing of civilian nuclear technology with India to implement 
        the agreement reached between President George W. Bush and 
        Manmohan Singh.

   The enabling legislation is key to consummating a strategic 
        partnership with India that would solidify military 
        cooperation, a stable balance of power in Asia; mutually 
        beneficial trade, investment and technological collaboration, 
        the energy security of both countries and environmental 
        protection.

   Failure to enact the legislation would be a body blow to the 
        improvement now taking place in relations with India.

   The Nuclear Non-Proliferation Treaty (NPT) does not bar U.S. 
        civilian nuclear cooperation with India. Existing United States 
        law, however, goes beyond the NPT.

   The nuclear sharing initiative would make the world safer by 
        bringing India within the international non-proliferation 
        framework. India would place all its civilian nuclear reactors 
        under International Atomic Energy Agency safeguards in 
        perpetuity, thus barring the diversion of any nuclear materials 
        for military use; continue its moratorium on nuclear testing; 
        upgrade export controls on nuclear sensitive items; and, 
        participate in the negotiation of a Fissile Material Cutoff 
        Treaty.

   NPT signatories will not withdraw from the treaty and build 
        nuclear arsenals because the United States helps India to meet 
        its electricity needs through civilian nuclear power. Whether a 
        country develops nuclear weapons depends on how it perceives 
        its national security interests. India has pointed to nuclear-
        armed China and Pakistan in seeking to justify nuclear weapons. 
        By contrast, Brazil and Argentina are not likely to make 
        nuclear weapons because they do not perceive them to be 
        necessary. South Korea and Japan are protected by a U.S. 
        nuclear deterrent, and if they were to develop nuclear weapons, 
        it would be in response to the threat posed by a nuclear-armed 
        North Korea. Civilian nuclear cooperation with India would not 
        set a precedent applicable to Iran, North Korea or Pakistan 
        because they have either violated the NPT or proliferated to 
        other nations.

   India's surging energy needs will lead it to construct more 
        civilian nuclear facilities irrespective of the cooperation of 
        the United States.

   Civilian nuclear energy is a major tool in combating global 
        warming.

   No agreement is without risk. But the advantages of civilian 
        nuclear sharing with India outweigh any plausible negative 
        ramifications. The good should not be sacrificed on the altar 
        of the perfect.

                                 ______
                                 

    The administration will soon present to the Congress a request for 
action to implement the agreement between President Bush and Prime 
Minister Manmohan Singh providing for civilian nuclear cooperation with 
India. The signatories to this letter urge your support for the 
necessary legislation. This recommendation is based on our extensive 
experience and expertise relating to non-proliferation policy, security 
issues in Asia, the domestic economic and political environment in 
India and India-U.S. relations.
    Congress should support the agreement to promote U.S. strategic 
interests, U.S. non-proliferation goals, U.S. energy security and 
global efforts to reduce greenhouse gas emissions leading to global 
warming. Failure to implement it would be a body blow to the 
development of the strong relationship with India so important to 
achieving U.S. goals in Asia and beyond. We present herewith the case 
for the agreement and our response to the arguments put forward in 
Congressional testimony by critics of the accord.
    As Mohammed El Baradei, Director General of the International 
Atomic Energy Agency, said following the President's visit to New 
Delhi, ``this agreement is an important step towards satisfying India's 
growing need for energy. It would also bring India closer as an 
important partner in the non-proliferation regime . . . It would be a 
step forward toward universalization of the international safeguards 
regime.''
The Strategic Case
    The implementation of this agreement is necessary to promote a 
strategic partnership with a dynamic, self-reliant India that is 
playing an increasingly significant regional and global security role. 
Such a partnership has already begun to develop as a natural 
consequence of shared democratic values, compatible market economies, 
growing technological interdependence and a congruence of geopolitical 
interests. Extending this partnership to cooperation in civilian 
nuclear technology has now become urgent. With its population now past 
one billion, India needs a massive expansion of its civilian nuclear 
program in order to cope with an escalating energy shortage that could 
in time threaten its economic and political stability.
    Against the background of China's rise, including the projected 
expansion of its naval reach in the South China Sea and the Indian 
Ocean, a strong, stable India will advance the traditional U.S. 
objective of an Asian balance of power in which no one nation is able 
to exercise overwhelming dominance. Since both the United States and 
India are seeking constructive relations with China, neither Washington 
nor New Delhi wants their new partnership to become an anti-Beijing 
security alliance. At the same time, as a series of joint naval 
exercises have shown, the U.S. and Indian navies are positioned for 
growing cooperation from the Persian Gulf to the Straits of Malacca. In 
the event of disruptions in the movement of critical energy supplies 
through Asian sealanes resulting from wars or piracy, this cooperation 
will enhance the ability of the United States to respond effectively. 
Apart from such direct military cooperation, the United States and 
India have a common strategic stake in combating Islamic extremism in 
Afghanistan, the Persian Gulf, the Middle East and Central Asia.
    Two previous administrations have attempted to move toward a 
strategic partnership with India while keeping in quarantine any 
dealings related to civilian nuclear technology or dual-use technology 
with possible applications to Indian nuclear or missile programs. This 
approach has failed because India, a subcontinental giant with a middle 
class larger than the combined population of France, Germany and 
Britain, is endowed with a wealth of indigenous talent in science and 
technology and feels confident that it will achieve major power status 
with or without external help.
The Non-Proliferation Case
    Implementation of the US-India civil nuclear agreement will advance 
the objectives of the Nuclear Nonproliferation Treaty (NPT) by opening 
the door to India's participation in the global non-proliferation 
regime. Contrary to the Congressional testimony of some specialists:

   The NPT does not bar the United States and other signatory 
        nations from providing civilian nuclear technology under 
        safeguards to non-signatories such as India. It is for this 
        reason that the United Kingdom, France and Russia have endorsed 
        the agreement. Congress went beyond the NPT by requiring 
        safeguards on all of a country's nuclear installations as a 
        condition for U.S. civilian nuclear cooperation. This has had 
        consequences that conflict directly with U.S. nonproliferation 
        goals. The United States can sell civilian nuclear reactors to 
        China, which signed the NPT but has supplied nuclear weapons 
        technology to Pakistan. At the same time, the United States has 
        barred such sales to India, which did not sign the NPT but has 
        never transferred nuclear technology to others. The 
        justification put forward for this paradoxical result is based 
        on a legal technicality: that China's 1964 test took place 
        before the cutoff date for classification as a ``nuclear 
        weapons state'' specified in the NPT, while India's 1974 and 
        1998 tests did not.
     We recognize that critics ofthe agreement have legitimate concerns 
        about possible unintended consequences that cannot be foreseen. 
        On balance, however, we believe that such concerns are less 
        compelling than the clear, tangible, immediate benefits to the 
        non-proliferation regime that will result from the agreement.

   The agreement will expand safeguards coverage ofthe Indian 
        nuclear program by requiring India to place all existing and 
        projected reactors designated by India as civilian under 
        international safeguards in perpetuity. Initially, India 
        insisted that reactors built without foreign involvement be 
        exempt from safeguards, but withdrew this proviso during the 
        negotiations with President Bush. These safeguards will remain 
        in force in perpetuity. With or without U.S. help, India will 
        be forced by burgeoning population growth to expand civilian 
        nuclear power exponentially for electricity generation, and it 
        is important to bring this expanded capacity under 
        international inspection.

   Prime Minister Singh has fulfilled his commitment in the 
        accord that India would ``identify and separate civilian and 
        nuclear facilities in a phased manner.'' After bitter internal 
        battles with nuclear nationalists in India, the Prime Minister 
        has presented a credible eight-year timetable designating which 
        of India's existing nuclear facilities are now restricted to 
        nuclear power generation, which ones will be shifted over to 
        civilian purposes at specified stages, and which ones will be 
        left for military use. India's nuclear hawks wanted a much 
        shorter civilian list. By 2014, 65 percent of India's existing 
        installed thermal nuclear capacity, 14 of 22 reactors, will be 
        restricted to civilian purposes. As Undersecretary of State 
        Nicholas Burns stated on March 2, safeguards will apply to all 
        future civilian power reactors and ``breeder reactors that are 
        classified as civilian'' by India. The reactors to be placed 
        under safeguards include several that India built with its own 
        know-how and resources. In the past it has refused to place 
        them under safeguards, but will do so now in order to be able 
        to get foreign fuel and components.
     Critics object to the fact that the agreement gives India the 
        freedom to build new military reactors and exempts key research 
        and development facilities with a military potential from 
        safeguards, such as any breeder reactors not classified as 
        civilian. Given the magnitude and projected growth of its 
        energy needs, however, India appears likely in its own self-
        interest to use fast-breeder reactors it may subsequently build 
        for civilian purposes, as its current plans envisage.
     Another often-expressed objection is that the agreement will 
        enable India to use its indigenous uranium for military 
        reactors, since civilian reactors will be able to rely 
        increasingly on imported uranium fuel. But as The Washington 
        Post has pointed out, ``leaving a potentially large plutonium-
        making program outside the scope of multilateral inspections is 
        not a setback relative to the status quo,'' since India would 
        have been free to continue making as many nuclear weapons as it 
        deemed necessary regardless of the July accord, using breeder 
        reactors as well as uranium-fueled reactors.
     The critics object to the very concept of a civilian-military 
        separation plan that implicitly acknowledges the military 
        component of the Indian nuclear program. But this 
        acknowledgement was long-overdue. India has been a de facto 
        nuclear weapons state since 1974, and U.S. policy under two 
        administrations has already given de facto recognition to this 
        reality.

   Critics also argue that the accord will lead countries that 
        accepted the NPT and gave up their own nuclear aspirations to 
        consider reactivating their weapons programs. In our view, what 
        could put pressure on these countries is not the deal with 
        India but the geopolitical situation in their own regions. 
        Thus, Brazil and Argentina would appear unlikely to reopen 
        their NPT adherence, and should, in any case, have access to 
        nuclear technology, given their compliance to date with Article 
        One.
     By contrast, North Korea, an NPT signatory, says it has developed 
        nuclear weapons, pointing to perceived security threats that 
        have nothing to do with the U.S.-India agreement. Similarly, if 
        South Korea, Taiwan or Japan were to convert their U.S.-aided 
        civilian nuclear programs to weapons development, it would be 
        in response not to the agreement but to changing geopolitical 
        factors.
     Finally, critics believe that the bargain with India may invite 
        countries that already have nuclear weapons, like North Korea 
        and Pakistan, or are seeking to develop a nuclear weapons 
        option, like Iran, to demand equal treatment. But India's 
        record of observing Article One stands in sharp contrast to 
        Pakistan's role as a wholesale proliferator and to the failure 
        of Iran and North Korea to abide by their NPT commitments.

   The agreement will strengthen India's commitment to 
        participating in international efforts to prevent 
        proliferation. India has not exported nuclear material or 
        technology, but because it has been treated as an object of 
        suspicion by the Nuclear Suppliers Group and other 
        nonproliferation institutions, it has not directly participated 
        in their work. The agreement not only commits India formally to 
        align its export rules and practices with those of the Nuclear 
        Suppliers Group: it also opens the way for Indian participation 
        in the Proliferation Security Initiative, and in efforts to 
        guard against nuclear leakage. India's decision to support the 
        majority in the International Atomic Energy Agency's recent 
        vote to report Iran to the U.N. Security Council shows how 
        important this enhanced nonproliferation posture can be.

The Energy Security Case
    The agreement opens the way for India to meet its energy needs in 
ways that will advance long-term U.S. energy security goals. At present 
India gets only 2.6 percent of its electricity from nuclear power, but 
it is likely to increase this percentage at least ten fold in the next 
two decades. Even if it only gets part way toward this goal, this would 
be a significant reduction in its potential need for oil and gas, most 
of it now obtained from the Persian Gulf.
    As more and more Indians drive automobiles, its demand for oil is 
rapidly growing. India will increasingly be competing with the United 
States and other consumers for petroleum from the Gulf and other 
sources. President Bush emphasized energy security in his press 
conference with Prime Minister Singh at the conclusion of his recent 
visit to India. ``Congress has got to understand,'' he said, ``that it 
is in our economic interest that India have a civilian nuclear power 
industry to help take the pressure offthe global demand for energy. 
Increasing demand for oil from America, from India and China, related 
to a supply that is not keeping up with the demand, causes our fuel 
prices to go up and so to the extent that we can reduce the demand for 
fossil fuels, it will help the American consumer. This is what I'll be 
telling our Congress.''
The Global Warming Case
    As India industrializes, its greenhouse gas emissions are steadily 
increasing, making it one of the world's major polluters, albeit far 
behind the United States. India, like China, argues that it is in a 
developmental stage, seeking to catch up with more advanced industrial 
powers, and cannot be held to the same standard as the developed 
countries in any global warming agreement. To the extent that India 
shifts away from fossil fuels, its negative impact on global warming 
will be reduced, and the prospects for international limitations on 
greenhouse gas emissions will improve.
    To sum up, the arguments made against the agreement are outweighed 
by the arguments in its favor. Civilian nuclear cooperation with India 
will strengthen its political and economic stability; further U.S. 
strategic interests, U.S. non-proliferation goals and U.S. energy 
security, and help to combat the growing danger posed to mankind by 
global warming.
    This letter reflects the personal views of the undersigned and does 
not represent the views of the institutions with which they are 
affiliated.


    Selig S. Harrison, Convenor--Director, Asia Program,Center for 
International Policy; Senior Scholar, Woodrow Wilson International 
Center for Scholars

    Walter Andersen--Associate Director, South Asia Studies School of 
Advanced International Studies Johns Hopkins University; Former 
Director for South Asia, Bureau of Intelligence and Research, 
Department of State; Former Special Assistant to U.S. Ambassador to 
India William Clark

    Gary K. Bertsch--Director, Center for International Trade and 
Security University of Georgia; University Professor of Public and 
International Affairs, University of Georgia

    Daniel Blumenthal--Resident Fellow in Asian Studies, American 
Enterprise Institute; Former Senior Director, China, Taiwan, Mongolia, 
and Hong Kong, Office of the Secretary of Defense

    Marshall Bouton--President, Chicago Council on Foreign Relations; 
Former Director for Policy Analysis, Near East and South Asia, 
Department of Defense

    Honorable Richard Celeste--Former U.S. Ambassador to India; Former 
Governor of Ohio

    Honorable William Clark--Former U.S. Ambassador to India; Former 
Assistant Secretary of State for East Asian and Pacific Affairs

    Stephen P. Cohen--Senior Fellow, The Brookings Institution; Former 
Member, Policy Planning Council, Department of State

    Thomas Donnelly--Resident Fellow in Defense and National Security, 
American Enterprise Institute; Member, U.S.-China Economic and Security 
Review Commission

    Ainslee Embree--Professor Emeritus of History and former Director 
of the Southern Asian Institute, Columbia University; Former Special 
Consultant to U.S. Ambassador to India Frank Wisner

    Harold Gould--Visiting Scholar, Center for South Asian Studies, 
University of Virginia

    Leonard G. Gordon--Senior Research Associate, Southern Asian 
Institute, Columbia University

    Frederic Grare--Visiting Scholar, Carnegie Endowment for 
International Peace; Former Counselor for Cooperation and Culture, 
Embassy of France, Islamabad, Pakistan

    Robert M. Hathaway--Director, Asia Program, Woodrow Wilson 
International Center for Scholars; Former South Asia Specialist, 
Foreign Affairs Committee, U.S. House of Representatives

    Walter Hauser--Professor Emeritus of South Asian History, 
University of Virginia

    Honorable Karl F. Inderfurth--Director, International Affairs 
Program Elliott School of International Affairs, George Washington 
University; Former Assistant Secretary of State for South Asian Affairs

    Robert Kagan--Senior Associate, Carnegie Endowment for 
International Peace; Former Member of the Policy Planning Staff, 
Department of State; Principal Speech Writer to Secretary of State 
George P. Shultz

    Honorable Dennis Kux--Senior Scholar, Woodrow Wilson International 
Center for Scholars; Former U.S. Ambassador to the Ivory Coast

    Edward Luttwak--Senior Advisor, Center for Strategic and 
International Studies; Former Consultant, the Office of the Secretary 
of Defense, the National Security Council, the State Department, and 
the U.S. Army, Navy and Air Force

    McKim Mamuott--Professor Emeritus of Anthropology, University of 
Chicago; Former Consultant, the Ford Foundation and the U.S. Embassy, 
New Delhi

    Thomas R. Pickering--Senior Vice President for International 
Relations, The Boeing Company; Former Under Secretary of State for 
Political Affairs

    Honorable John B. Ritch--Director General, World Nuclear 
Association; Former U.S. Ambassador to the International Atomic Energy 
Agency; Former Staff Adviser on Nuclear Non-Proliferation and Arms 
Control, Senate Foreign Relations Committee

    Lloyd Rudolph--Professor Emeritus of Political Science, University 
of Chicago; Former Chair, South Asian Studies and Chair, Committee on 
International Relations, University of Chicago

    Susanne Rudolph--William Benton Distinguished Service Professor of 
Political Science Emerita, University of Chicago; Former Director, The 
Center for International Studies and Chair of the South Asia Center, 
University of Chicago

    Honorable Howard Schaffer--Deputy Director, Institute for the Study 
of Diplomacy Georgetown University; Former U.S. Ambassador to 
Bangladesh

    Honorable Teresita C. Schaffer--Director, South Asia Program, 
Center for Strategic and International Studies; Former Deputy Assistant 
Secretary of State for Near East and South Asian Affairs; Former U.S. 
Ambassador to Sri Lanka

    Honorable Frank Wisner, Vice-President, American International 
Group; Former U.S. Ambassador to India
                          U.S. Department of State,
                                     Washington, DC. 20520,
                                                    April 27, 2006.
Hon. Richard G. Lugar, Chairman,
U.S. Senate, Committee on Foreign Relations
    Dear Mr. Chairman: Thank you for your questions on the impact of 
the U.S.-India Civilian Nuclear Cooperation Initiative in the context 
of climate change and energy problems in the U.S. and the advantages of 
energy partnerships with countries like India. The Secretary asked that 
I respond to the questions that you asked during her recent testimony 
at the SFRC on April 5.
    Greater access to civilian nuclear energy will help to meet India's 
growing demand for energy. India--with an economy growing at 
approximately 8 percent each year--has a rapidly growing appetite for 
energy. Huge population growth, expanding industrial production, 
economic development, urbanization, and increased motor vehicle 
ownership are all driving this energy demand. Between 1980 and 2001, 
demand increased by 208 percent. Only 2% of India's power generation 
needs are currently met by nuclear energy. India plans on investing in 
additional civilian nuclear reactors in order to expand this percentage 
to 20% by 2020, helping to meet the needs of its growing economy while 
reducing its reliance on fossil fuels. The U.S.-India Civilian Nuclear 
Cooperation Initiative will open up U.S.-India trade and investment in 
nuclear energy for the first time in three decades. It will also help 
meet India's energy needs in an environmentally friendly manner.
    We view the U.S.-India Civilian Nuclear Cooperation Initiative and 
the rest of the U.S.-India Energy Dialogue as a process for 
strengthening India's total energy security. Our efforts to assist 
India in its effort to increase domestic energy production, reduce the 
environmental impact of energy production, transport and use, improve 
the efficiency of energy use, and develop energy technologies will 
ultimately work to strengthen India's energy security and meet its 
growing demand. I have attached a memorandum outlining in detail the 
various activities we are undertaking with India to resolve these 
urgent issues.
    Diversifying India's energy sector will help to alleviate the 
competition among India, the United States, and other rapidly expanding 
economies for scarce carbon-based energy resources, thereby lessening 
pressure on global energy prices. Civil nuclear cooperation with India 
will help it meet its rising energy needs without increasing its 
reliance on unstable foreign sources of oil and gas, such as nearby 
Iran. An India that can meet its energy needs efficiently and 
rationally ultimately strengthens global and U.S. energy security.
    The U.S. and India are cooperating on energy initiatives through 
five working groups: The Civil Nuclear Working Group, the Coal Working 
Group, the Power and Energy Efficiency Working Group, the Oil and Gas 
Working Group, and the New Technology and Renewable Energy Working 
Group. These DOE-led groups have been actively meeting since the 
formation of the U.S.-India Energy Dialogue in May 2005, and plan a 
full range of activities in the near term (enclosure).
    The Coal Working Group has been meeting since July 2005 with 
several key goals: increased collaboration on clean fossil energy 
technologies; creating an attractive investment climate for domestic 
and foreign investment in the energy sector; and developing an 
efficient and environmentally sound energy infrastructure. India has 
the third largest reserves of coal in the world and coal remains the 
mainstay of India's energy sector, comprising 70% of their power 
generation capacity. Indian coal produces about twice as much ash and 
particulate matter, and emits far more nitrogen oxide (an element in 
photochemical smog) and carbon monoxide (a poisonous gas) than 
*American coal. India's agreement to take part in the FutureGen Project 
is important since the project will create the technology to produce a 
near-zero emissions coal-fired power plant that will produce hydrogen 
and sequester carbon dioxide underground, enabling greater use of coal 
in an environmentally sustainable way when the technology is eventually 
used in other coal-fired power plants.
    Other initiatives to jointly research other forms of alternative 
energy like biofuels, solar and wind energy are also opportunities to 
expand the range of environmentally friendly technologies available to 
India. The President's Advanced Energy Initiative, announced during the 
State of the Union, highlights our own interest in pursuing expanded 
research in biofuels and solar energy. India is the fourth largest 
producer of wind power in world, with annual production of 4,300 
megwatts. It hopes to expand this amount through more cooperation with 
the U.S. in mapping exercises and resource assessments. Our New 
Technology and Renewable Energy Working Group hopes to further promote 
dialogue on these technologies through cooperation with DOE's National 
Renewable Energy Laboratory. We also feel that U.S.-India cooperation 
through the Asia Pacific Partnership on Clean Development and Climate 
along with other countries in the region will promote the development 
of cleaner, cost-effective, and more efficient technologies. The 
expected reduction of greenhouse gases from the use of these 
technologies, cleaner coal emissions, and expanded use of civilian 
nuclear energy are positive steps for India, the U.S. and the global 
community.
    The U.S.-India Energy Dialogue and the U.S.-India Civilian Nuclear 
Cooperation Initiative benefit the energy interests of both India and 
the United States. We hope this information is useful. Please do not 
hesitate to contact us if we can be of further assistance.
            Sincerely,
                                Jeffrey T. Bergner,
                  Assistant Secretary, Legislative Affairs,

Enclosure: As stated.

                               __________

               Fact Sheet: U.S.-India Energy Cooperation

    Under the U.S.-India Energy Dialogue, the United States and India 
are working together to meet the demands of rapid economic development 
and current population growth rates, both globally and within India, by 
increasing the availability of sustainable energy resources. 
Initiatives under this dialogue seek to increase India's domestic 
energy production, reduce the environmental impact of energy 
production, transport and use, improve the efficiency of energy use, 
and develop both incremental and transformational energy technologies. 
The U.S. and India have pursued these energy initiatives through five 
main tracks: The Civil Nuclear Working Group, the Coal Working Group, 
the Power and Energy Efficiency Working Group, the Oil and Gas Working 
Group, and the New Technology and Renewable Energy Working Group. 
Listed below are the major outcomes of these working groups, and the 
highlights of key new initiatives:

                              1. futuregen
   India will join as an international partner for the 
        FutureGen project to create a near-zero emissions coal-fired 
        power plant that will produce hydrogen and sequester carbon 
        dioxide underground, enabling greater use of coal in an 
        environmentally sustainable way.

   India plans to participate in the Government Steering 
        Committee of FutureGen and the FutureGen Industry Alliance. The 
        Government of India will contribute $10 million to the project 
        to join the government steering committee.

   The U.S. and India signed a framework agreement on FutureGen 
        during President Bush's visit.

     2. the international thermonuclear experimental reactor (iter)
   In December 2005, the U.S. and its ITER partners, the 
        European Union, Russia, Japan, South Korea and China, agreed to 
        invite India as a full partner. The Indian government is making 
        the agreed-upon contribution to the project for membership.

   American support was instrumental in ensuring the final 
        agreement. The partnership represents the first tangible and 
        concrete step towards greater cooperation between the USA and 
        India in civilian nuclear energy.

                3. the integrated ocean drilling program
   India and the U.S. will work toward India's membership in 
        the Integrated Ocean Drilling Program (IODP), a scientific 
        research program conducting ocean sediment sampling and 
        monitoring.

   ndia has leased the ocean research ship Aides Resolution for 
        a three-month expedition to study gas hydrates beginning in 
        March 2006. DOE owns specialized equipment on this ship that 
        Indians would like to use.

   Because the Indian hydrate expedition and follow-on studies 
        will include many U.S. research scientists, our involvement 
        will accelerate commercial production of U.S. hydrates. 
        Therefore, DOE has facilitated the export authorization for use 
        of the equipment.

                    4. increased energy cooperation
The Civil Nuclear Working Group
   A Joint Technical workshop was held January 9-12, 2006 in 
        Mumbai, India. The purpose of the January workshop was to 
        advance dialogue and cooperation between the United States and 
        India on technical issues associated with civilian nuclear 
        energy. A second workshop will likely take place in the U.S. 
        during 2006.

Power and Energy Efficiency Working Group
   U.S.-India Energy Efficiency Conference will take place 
        early May 2006 in India. The focus of the conference will be on 
        industrial and building energy efficiency.

   A proposed strategic partnership between India's National 
        Thermal Power Corporation and the U.S. Department of Energy's 
        National Energy Technology Laboratory will work to advance 
        research and development of clean and efficient power 
        generation.

   USAID recently launched a public-private partnership with 
        the General Electric Company (GE) to increase access to clean 
        and affordable energy services in rural communities in India. 
        The partnership will span a two-year period and provide up to 
        four communities in India with access to clean energy.

   A Clean Coal Business Development Council will likely be 
        launched during the Clean Coal Summit in July 2006.

   A workshop is planned in India in May 2006 to discuss the 
        results of a study supported by USAID on the feasibility of 
        Integrated Gas Combined Cycle (MCC) power plants in India.

   Continued cooperation on energy efficient buildings and on 
        the development of building codes. A U.S. team is expected to 
        conduct training in India in March/April 2006.

   The Distribution Reform Upgrades and Management program has 
        completed detailed project reports on four model projects an 
        efficient power distribution in the states of Karnataka, 
        Maharashtra, Gujarat and Delhi.

   The development of a graduate degree program in.power 
        distribution management is currently underway.

Coal Working Group
   Establishment of a Business Advisory Council to serve as a 
        resource to the CWG, consisting of representatives from 
        business, industry, academia and other non-governmental 
        organizations.
   Workshop in India in April 2006 to discuss investment 
        opportunities, particularly in the areas of exploration, coal 
        beneficiation, and power generation.
   Planning underway to have information/technical expertise 
        exchanges between U.S. and India, as well as the potential for 
        pilot projects in India in the areas of underground coal 
        gasification; coal liquefaction; coal mine reclamation; and 
        coal beneficiation/coal washeries.
   The U.S. Trade and Development Agency (USTDA) has provided a 
        $360,000 Feasibility Study grant for the Neyveli coal mine 
        expansion project.

Oil and Gas Working Group
   A joint conference on natural gas, including coal bed 
        methane (CBM) and involving the business community, is 
        currently being planned for May 2006 in New Delhi.

   A Memorandum of Understanding (MOU) on Energy Information 
        Exchange between U.S. Energy Information Administration (EIA)--
        Ministry of Petroleum and Natural Gas (MPNG) was signed on 
        February 9, 2005.

   A MOU between the U.S. Minerals Management Service and 
        India's Oil Industry Safety Directorate is expected to be 
        signed soon.

   A MOU between the U.S. Geological Survey and MPNG's 
        Directorate General for Hydrocarbons is expected to be signed.

   The USTDA and U.S. Environmental Protection Agency are 
        working with the Government of India to establish of a CBM 
        Clearinghouse.

   USTDA is working with the Government of India to finalizing 
        a grant for a limited feasibility study of a national pipeline 
        grid.

New Technology and Renewable Energy Working Group
    Several areas have been identified for potential cooperation on 
research and development. Potential collaborations include:

   The Indian Oil Company (IOC) has proposed a MOU with DOE's 
        National Renewable Energy Laboratory (NREL) on hydrogen.

   NREL has also proposed collaborative projects with IOC on 
        biofuels, including joint research and information sharing 
        focus on biodiesel fuels and production.

   The Indian Ministry of Non-Conventional Energy Sources 
        (MNES) and NREL are looking into joint research projects on 
        solar thermal power generation, low wind speed technology 
        research & development, renewable energy resource assessment 
        and use of resource data in relevant analysis tools.
Excerpt From CRS Memorandum, ``Assessment of Potential Benefits of U.S. 
               Civil Nuclear Cooperation With India''\1\
---------------------------------------------------------------------------

    \1\Memorandum prepared by the Congressional Research Service, K. 
Alan Kronstadt (Coordinator), Sharon Squassoni (Foreign Affairs, 
Defense, and Trade Division), and Mark Holt (Resources, Science, and 
Industry Division), March 29, 2006
---------------------------------------------------------------------------

Potential Benefits For Global Energy Markets, the Environment, and U.S. 
                         Business Interests\2\
---------------------------------------------------------------------------

    \2\This section written by Mark Holt, Specialist in Energy Policy, 
Resources, Science, and Industry Division.
---------------------------------------------------------------------------
    Because India is not a signatory to the Nuclear Nonproliferation 
Treaty and has used its nuclear power program to develop nuclear 
weapons, the United States and other nuclear supplier nations have 
restricted India's access to foreign nuclear technology and materials 
since the early 1970s. As a result, India's nuclear power program has 
relied on indigenous heavy water reactor designs based on small, 
imported reactors that were supplied before the international cutoff. 
India had set a goal of 10,000 megawatts of nuclear generating capacity 
by 2000,\3\ but by 2005 only 2,550 megawatts of nuclear capacity was on 
line.\4\
---------------------------------------------------------------------------
    \3\``Datafile: India.'' Nuclear Engineering International. Feb. 
1995. p. 17.
    \4\``World List of Nuclear Power Plants.'' Nuclear News. Mar. 2005.
---------------------------------------------------------------------------
    Proponents of the U.S.-India nuclear cooperation proposal contend 
that allowing India to import U.S. reactors would allow India's nuclear 
generating capacity to expand much more rapidly: ``The agreement also 
is good for the American economy because it will help meet India's 
surging energy needs--and that will lessen India's growing demand for 
other energy supplies and help restrain energy prices for American 
consumers,'' according to a White House statement.\5\ Secretary of 
State Condoleezza Rice has also contended that the proposed nuclear 
agreement could significantly reduce India's projected carbon dioxide 
emissions and create U.S. jobs related to reactor exports to India.\6\
---------------------------------------------------------------------------
    \5\The White House. Office of the Press Secretary. ``India Civil 
Nuclear Cooperation: Responding to Critics.'' Mar. 8, 2006.
    \6\Rice, Condoleezza. ``Our Opportunity With India.'' Washington 
Post. Mar. 13, 2006. p. A15.
---------------------------------------------------------------------------
    The extent to which the U.S.-India nuclear agreement would help 
restrain U.S. energy prices and reduce CO2 emissions would 
depend primarily on the amount of new Indian nuclear generating 
capacity resulting from the agreement and the amount of Indian fossil 
fuel consumption displaced by any such nuclear capacity. U.S. job 
creation would additionally depend on the ability of U.S. reactor 
vendors to compete with foreign suppliers for Indian contracts and the 
U.S. content of any resulting reactor projects. The White House has not 
yet provided a detailed analysis to support its contentions about the 
potential energy, environmental, and economic benefits of the proposed 
nuclear agreement. As indicated by the following discussion, the energy 
benefits to U.S. consumers are likely to be negligible for at least the 
next 20 years, although longer-term benefits could be significant under 
some imaginable scenarios. Any exports of U.S. reactors to India would 
almost certainly create U.S. jobs, although the magnitude of such 
employment growth is difficult to estimate.
    A recently released draft of India's first Integrated Energy Policy 
calls for India to order 6,000 megawatts of foreign-supplied nuclear 
generating capacity (six or seven large commercial reactors) during the 
next ten years, in addition to a two-reactor Russian nuclear power 
plant already under construction. The draft plan calls for Indian 
nuclear capacity to reach 9,000-11,000 megawatts in 2010, 21,000-29,000 
megawatts in 2020, and double each decade thereafter through 2050. The 
upper range of the projections assumes imports of technology and 
nuclear fuel.\7\
---------------------------------------------------------------------------
    \7\Saraf, Sunil. ``Indian Energy Policy Stresses Indigenous Nuclear 
Development.'' Nucleonics Week. Jan. 26, 2006. p. 8.
---------------------------------------------------------------------------
    Far more modest nuclear growth is predicted by the International 
Energy Agency (IEA), which estimates that India's nuclear generating 
capacity will reach 6,000 megawatts in 2010, 9,000 megawatts in 2020, 
and 14,000 megawatts in 2030.\8\ Given India's past shortfalls in 
meeting its nuclear power targets, the IEA projections may be more 
realistic than those in the Indian energy plan. However, because the 
IEA estimates were issued in 2004, they do not consider any potential 
boost from reactor imports.
---------------------------------------------------------------------------
    \8\International Energy Agency. World Energy Outlook 2004. p. 500.
---------------------------------------------------------------------------
    Even if legal barriers to nuclear sales to India were lifted, the 
potential difficulty in financing such sales would pose a significant 
obstacle to Indian nuclear power expansion. Nuclear power plants are 
far more capital-intensive than competing technologies; the higher 
construction costs are supposed to be recouped by lower fuel and other 
operating costs. However, the overall economic viability of nuclear 
power has been inconsistent throughout the world, and worldwide nuclear 
growth has been slow since the 1980s. The relatively few nuclear power 
plants that have been completed in recent years have experienced such a 
wide variety of construction circumstances and are of so many designs 
and sizes that no clear track record on capital costs has been 
demonstrated. Costs reported in the news media for reactors completed 
since 2000 range from less than $1,000 per kilowatt of capacity for 
Russia's Rostov 1\9\ to about $4,400 per kilowatt for Brazil's Angra 
2.\10\ Costs toward the lower end of that range will probably be 
necessary for a worldwide resurgence in nuclear power plant 
construction.
---------------------------------------------------------------------------
    \9\Weekly Business Report, Mar. 13, 2001; Interfax, July 1, 1999 
(from Nuclear Threat Initiative web site, www.nti.org).
    \10\Dow Jones, July 14, 2000.
---------------------------------------------------------------------------
    In the United States, no commercial reactors have been ordered 
since 1978 (and all orders since 1973 have been cancelled). About a 
dozen nuclear power plants are currently under consideration in the 
United States, but the Energy Information Administration calculates 
that new reactors would not be financially feasible without tax credits 
provided by the Energy Policy Act of 2005 (P.L. 109-58).\11\
---------------------------------------------------------------------------
    \11\Energy Information Administration, Analysis of Five Selected 
Tax Provisions of the Conference Energy Bill of 2003, Feb. 2004.
---------------------------------------------------------------------------
    Nuclear power's relatively high up-front costs, in addition to 
hindering nuclear energy expansion throughout the world, pose 
particular problems for India. IEA estimates that India will need to 
invest $665 billion in its electricity sector over the next 30 years 
and concludes, ``Given the extremely poor financial situation of the 
Indian power sector, the availability of the necessary finance remains 
very uncertain.'' Most Indian power plants are government-owned, with 
about two-thirds owned by State Electricity Boards (SEBs). Revenues to 
the SEBs cover only about 70% of their costs, and about 40% of their 
revenues come from subsidies. Power theft, non-billing, and non-
payments are widespread.\12\
---------------------------------------------------------------------------
    \12\International Energy Agency. World Energy Investment Outlook 
2003. p. 388.
---------------------------------------------------------------------------
    Private-sector financing in India remains problematic as well. 
India opened the electricity sector to independent power producers 
(IPPs) in 1991, but ten years later only 10,000 megawatts of such 
capacity had been constructed. According to IEA, ``The time and effort 
required to develop new IPP projects in India proved too great for some 
foreign investors, and many reduced their Indian exposure. Among 
recurring difficulties are the lack of prior clearance of the projects 
by the authorities, problems in securing fuel supply agreements and the 
bankruptcy of the SEBs.''\13\ The relatively high up-front risk of 
nuclear generation would appear to make private-sector financing 
especially difficult for Indian nuclear projects, although some 
interest has recently been expressed by Indian firms.\14\
---------------------------------------------------------------------------
    \13\International Energy Agency. Electricity in India: Providing 
Power for the Millions. 2002. p. 25.
    \14\AsiaPulse. ``India's Tata Group Expresses Interest in Nuclear 
Power.'' Mar. 6, 2006.
---------------------------------------------------------------------------
    Nuclear power in India is currently owned and operated by the 
central government through the Nuclear Power Corporation of India Ltd. 
(NPCIL). Because of the financing obstacles facing the SEBs and private 
sector, it appears likely that nuclear power expansion in the 
foreseeable future would have to continue to be undertaken by the 
central government. However, some Indian industry observers have 
questioned whether NPCIL has the resources to expand India's nuclear 
capacity at the rate envisioned by India's draft energy plan without 
private-sector assistance.\15\
---------------------------------------------------------------------------
    \15\Hindu Business Line. ``India Nuclear Power Generation Sector.'' 
Mar. 3, 2006.
---------------------------------------------------------------------------
    If a U.S.-India nuclear cooperation agreement is implemented and 
adequate financing for new nuclear power plants can be arranged, any 
resulting energy and environmental benefits would not be realized 
immediately. Reactor projects currently under consideration in the 
United States are expected to require at least ten years of design, 
licensing, and construction before operation can begin.\16\ For Indian 
reactors, additional time would probably be needed to negotiate a deal, 
including price, financing, and local content and technology transfer 
requirements. After China began serious negotiations in 1984 for its 
first foreign reactors, from France, the first two units began 
operating in 1994, and four additional foreign-supplied reactors have 
been completed since.\17\ (Two Russian-supplied reactors are currently 
under construction, and China is expected to soon award foreign 
contracts for four more nuclear units.) A case could be made that 
India's nuclear program might follow a similar pace.
---------------------------------------------------------------------------
    \16\Weil, Jenny, and Margaret Ryan. ``New Plants Entice Utilities, 
Investors, But Risks Loom Large.'' Nucleonics Week. Feb. 16, 2006. p. 
1.
    \17\MacLachlan, Ann. ``Framatome and Chinese Sign Letter of Intent 
for Daya Bay Units.'' Nucleonics Week. Mar. 20, 1986. p. 1; ``World 
List of Nuclear Power Plants.'' Nuclear News. Mar. 2005.
---------------------------------------------------------------------------
    If India began operating six new commercial reactors by 2025 
resulting from the U.S.-India nuclear cooperation agreement, the 
additional nuclear generating capacity would total about 7,200 
megawatts (about 1,200 megawatts each). Any additional Indian nuclear 
power capacity would be expected to displace some of the growth that 
would otherwise have taken place in electricity generation fueled by 
coal, natural gas, and oil. IEA projects that by 2025, coal-fired 
generating capacity will grow by 94,000 megawatts, natural gas-fired 
capacity will grow by 45,000 megawatts, and oil-fired capacity will 
grow by 7,000 megawatts.\18\
---------------------------------------------------------------------------
    \18\IEA, World Energy Outlook 2004. p. 500. (Average of 2020 and 
2030 capacity projections.)
---------------------------------------------------------------------------
               impact on oil and natural gas consumption
    If U.S.-supplied reactors displaced those three fuels in proportion 
to their expected growth, then the displacement would be 4,636 
megawatts of coal-fired capacity, 2,219 megawatts of natural gas-fired 
generation, and 345 megawatts of oil-fired generation. India's 
projected natural gas consumption in 2025 would be reduced by 119 
billion cubic feet per year and annual oil consumption reduced by 2.9 
million barrels.
    With world oil consumption projected to reach 119 million barrels 
per day by 2025,\19\ the reduction in India's oil consumption 
calculated above would have little or no impact on world oil markets. 
The calculated natural gas reduction would also be a small proportion 
of the projected world annual total consumption of 156 trillion cubic 
feet by 2025. Natural gas prices are currently set primarily in 
regional markets, but it is possible that by 2025 a world market could 
develop and that Indian imports could directly affect U.S. prices 
(although not the small amount of gas in the calculation above).
---------------------------------------------------------------------------
    \19\Energy Information Administration. International Energy Outlook 
2005. p. 93.
---------------------------------------------------------------------------
                potential co2 reductions\20\
---------------------------------------------------------------------------
    \20\Carbon dioxide emissions analysis prepared by Larry Parker, 
Specialist in Energy Policy, Resources, Science, and Industry Division.
---------------------------------------------------------------------------
    The 7,200 megawatts of displaced fossil-fuel generating capacity 
estimated above would have produced about 37 million metric tons of 
carbon dioxide per year. Carbon dioxide reductions of 37 million metric 
tons per year would be similarly small in comparison to total worldwide 
carbon dioxide emissions. However, such reductions would constitute 2% 
of India's current annual CO2 emissions and 3.6% of India's 
current energy-related emissions,\21\ which could help India meet 
future reduction goals that might be required by international 
agreements.
---------------------------------------------------------------------------
    \21\World Resources Institute. Climate Analysis Indicators Tool. 
[cait.wri.org].
---------------------------------------------------------------------------
    If faster nuclear growth than described above were assumed, the 
displacement of fossils fuels and carbon dioxide emissions would 
increase proportionately. Future advances in technology, such as 
commercially viable electric vehicles or vehicles powered by hydrogen 
from nuclear reactors, could further increase nuclear power's potential 
displacement of oil consumption in the long run. However, the timing 
and possible commercial impact of such technologies remains highly 
speculative.
               nuclear job creation in the united states
    The number of U.S. jobs that might result from the proposed India 
agreement would depend on the number of reactors imported by India 
(which, as noted above, may be limited by available financing), the 
ability of U.S. reactor vendors to compete with foreign suppliers for 
any such orders, and the U.S. content of any reactors supplied by U.S. 
vendors.
    Secretary Rice's Washington Post article cited above contends that 
even if India ordered only two U.S. reactors, ``it will mean thousands 
of new jobs for American workers.'' However, even such a minimal order 
is far from guaranteed, as shown by the U.S. experience with China, 
which has ordered no U.S. reactors since a U.S.-China nuclear 
cooperation agreement was implemented in 1997. China is considering a 
proposal for four reactors by Pittsburgh-based Westinghouse Electric 
Company, which is currently owned by British Nuclear Fuels Ltd. (BNFL) 
and being sold to the Japanese conglomerate Toshiba. However, 
Westinghouse faces strong competition for the order from the French 
supplier Areva, which has already built four reactors in China.
    U.S. reactor vendors (Westinghouse and General Electric Co.) might 
face a competitive disadvantage in India if the Nuclear Suppliers Group 
allows sales to India before a U.S.-India nuclear cooperation agreement 
can be implemented under section 123 of the Atomic Energy Act (42 
U.S.C. 2153). Analysts have also noted that India has not signed any 
international nuclear liability agreements, a situation that could put 
private-sector U.S. reactor vendors at a further disadvantage against 
competitors owned by foreign governments, such as Areva and Russia's 
Atomstroy Export, although BNFL is also government-owned.\22\
---------------------------------------------------------------------------
    \22\Poe, Sheryll. ``Non-Proliferation Advocates Question Trade 
Benefits of India Nuke Deal.'' Inside U.S. Trade. Mar. 24, 2006.
---------------------------------------------------------------------------
    If U.S. firms do receive future reactor orders from India, many of 
the components and services related to such orders would probably be 
procured from non-U.S. sources. Westinghouse has stated that the 
largest reactor components for its proposed sale to China would be 
foreign-supplied, although design, instrumentation and control, and 
other U.S.-supplied portions of the four-reactor deal would support 
5,000 U.S. jobs.\23\ General Electric contends that the U.S. content in 
two reactors the company is currently building in Taiwan totals more 
than 60%.\24\
---------------------------------------------------------------------------
    \23\Wald, Matthew L. ``U.S. Loans for Reactors in China Draw 
Objections.'' New York Times. Feb. 28, 2005.
    \24\E-mail communication from Rob Wallace, GE Energy, Feb. 15, 
2006.
---------------------------------------------------------------------------
    Another factor is that, over time, the Indian content of nuclear 
power plants imported by India would probably increase, because a major 
element of such import deals is usually technology transfer. For 
example, Areva's original reactor technology was licensed from 
Westinghouse, and Japan and South Korean reactors are based on U.S. 
designs as well. Much of the cost of even the first nuclear power 
plants ordered by India would be expected to go toward Indian 
materials, labor, and non-nuclear components.
    A U.S.-India nuclear agreement would open up other potential 
business besides reactor sales, possibly increasing the deal's impact 
on U.S. jobs. Contracts related to nuclear fuel, maintenance, and other 
services could potentially be signed by U.S. firms or foreign firms 
with U.S. nuclear operations.
    According to the U.S. Chamber of Commerce, ``India's nuclear power 
requirements are projected to generate as many as 27,000 high quality 
jobs each year for the next ten years in the U.S. nuclear industry 
alone.'' However, given the uncertainties discussed above, that 
estimate appears to be highly optimistic.
           Material Inserted Into the Record by Senator Boxer


  Nunn Urges Congress to Set Conditions on U.S.-India Nuclear Pact\1\
---------------------------------------------------------------------------

    \1\Copyright 2006 The Washington Post, March 21, 2006
---------------------------------------------------------------------------
             by glenn kessler, washington post staff writer
    In a setback for the administration's efforts to win approval of a 
landmark nuclear pact with India, former senator Sam Nunn said 
yesterday that he has serious concerns the deal would harm the ``United 
States' vital interest'' in preventing nuclear proliferation and urged 
Congress to set conditions for its support.
    ``Congress has a duty to look at the broader framework,'' Nunn, a 
moderate and highly respected Georgia Democrat who still has broad 
influence in both parties on proliferation and military matters, said 
in an interview. ``If I were still in Congress, I would be skeptical 
and looking at conditions that could be attached.''
    Undersecretary of State R. Nicholas Burns warned lawmakers last 
week that congressionally mandated conditions could cause the agreement 
to unravel. He and other administration officials say the agreement is 
a groundbreaking achievement that will bring India, which has not 
signed the nuclear Non-Proliferation Treaty, into the nonproliferation 
mainstream, while bolstering U.S.-India ties and adding jobs to the 
U.S. economy.
    But Nunn, who was briefed on the deal by State Department officials 
last week, said he is concerned it would lead to the spread of weapons-
grade nuclear material, unleash a regional arms race with China and 
Pakistan, and make it more difficult for the United States to win 
support for sanctions against nuclear renegades such as Iran and North 
Korea. Nunn is a board member of General Electric Co.--which built 
nuclear power reactors in India before New Delhi conducted its first 
nuclear test in 1974--but he said he thinks the economic benefits are 
overstated.
    The administration last week proposed legislation that would exempt 
India from sections of the Atomic Energy Act that restrict trade with 
countries that are not party to nuclear treaties. The proposal already 
faces an uphill battle in Congress, where key lawmakers such as Sen. 
Richard G. Lugar (R-Ind.), chairman of the Senate Foreign Relations 
Committee, and Rep. Henry J. Hyde (R-Ill.), chairman of the House 
International Relations Committee, have remained neutral. The 
administration has actively sought, without much success, the support 
of moderate opinion leaders such as Nunn.
    Under the pact, India is to separate its civilian and military 
nuclear programs over the next eight years to gain U.S. expertise and 
nuclear fuel to meet its rapidly rising energy needs. India's civilian 
facilities would be subject for the first time to permanent 
international inspections, but the agreement does not require oversight 
of India's prototype fast-breeder reactors, which can produce 
significant amounts of weapons-grade plutonium when fully operational.
    The Bush administration originally sought a plan that would have 
allowed India to continue producing material for six to 10 weapons each 
year, but the new plan would allow India enough fissile material for as 
many as 50 weapons a year. Experts said this would far exceed what is 
believed to be its current capacity.
    Nunn said that among the conditions he would attach to the 
legislation is the requirement it could not take effect until the 
president certifies that India pledges not to produce nuclear 
materials, such as plutonium or highly enriched uranium, for weapons. 
The current agreement ``certainly does not curb in any way the 
proliferation of weapons-grade nuclear material,'' Nunn said.
    ``India was a lot better negotiator than we were,'' Nunn asserted. 
While the administration has said it has no intention of aiding India's 
nuclear weapons program, ``the reality could be the opposite,'' he 
said. ``The administration has a high burden to explain this.''
    Nunn added that suggestions by some former and current 
administration officials that it might be in the United States' 
interest to allow India to build up its strategic capabilities is 
``totally counterproductive and dangerous reasoning.''
    Nunn, who served in the Senate for 24 years, is co-chairman and 
chief executive of the Nuclear Threat Initiative, a nonprofit 
organization that seeks to reduce the global threats from nuclear, 
biological and chemical weapons. Lugar is also a board member of NTI, 
and the two men wrote the Nunn-Lugar Act, which has helped destroy 
thousands of nuclear warheads in the former Soviet Union.
    In an interview published yesterday in the Indianapolis Star, Lugar 
said he might favor the legislation if he were convinced that the new 
relationship was in the United States' best interests, that there were 
``considerable if not complete'' safeguards on the spread of nuclear 
fuel and that it would lead to a reduction of oil consumption.
    The U.S. Chamber of Commerce has vowed an all-out push to win 
approval of the agreement, saying it would be a boon for U.S. business. 
But it has also sparked a backlash from nonproliferation experts who 
believe it will lead to the unraveling of the Non-Proliferation Treaty, 
which sought to limit the number of nuclear weapons states. ``Nunn's 
voice carries weight,'' said Henry D. Sokolski, executive director of 
the Nonproliferation Policy Education Center and a Pentagon official in 
the George H.W. Bush administration, who opposes the agreement. ``We 
have waited for a moderate, respected voice to speak clear sense on 
these matters. Now that he's spoken, it would be very strange if 
Congress doesn't listen.''

                               __________

             Issues and Questions on July 18 Proposal for 
                     Nuclear Cooperation with India

                                                  November 18, 2005
U.S. House of Representatives,
Washington, DC.

    Dear Member of Congress, We are writing to urge you and your 
colleagues to critically examine the July 18 proposal to allow for 
``full'' U.S.-Indian civilian nuclear cooperation, which would require 
significant changes to U.S. nonproliferation laws and longstanding 
international nonproliferation policy that have been supported and 
advanced by past Republican and Democratic administrations.
    We believe that the United States and India can and should expand 
their ties and common interests as free democracies through expanded 
cooperation in trade and human development, scientific and medical 
research, energy technology, humanitarian relief, and military-to-
military contacts. In addition, both the United States and India have a 
vital interest in reducing the global dangers posed by nuclear weapons 
through effective nonproliferation and disarmament endeavors.
    Unfortunately, the proposal for civil nuclear cooperation with 
India poses far-reaching and potentially adverse implications for U.S. 
nuclear nonproliferation objectives and promises to do little in the 
long-run to bring India into closer alignment with other U.S. strategic 
objectives.President Bush pledged to seek changes in the Atomic Energy 
Act (AEA) of 1954 as amended by the 1978 Nonproliferation Act, which 
bars civilian nuclear cooperation with non-nuclear-weapon states as 
defined by the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) 
that do not allow full-scope IAEA safeguards. This includes India. The 
President also pledged to seek changes to relevant Nuclear Suppliers 
Group (NSG) guidelines, which make full-scope safeguards a condition of 
civil nuclear cooperation with non-nuclear-weapon states as defined by 
the NPT--a U.S. policy objective adopted by NSG consensus during the 
George H. W. Bush administration.
    We have read the statements of the President and administration 
officials concerning the proposed agreement, but key details needed to 
help the Congress fully understand the implications of the proposal, in 
our view, have not yet been provided. Accordingly, we urge that before 
any action is taken on any legislation sent up by the administration to 
implement the proposal, Congress should obtain detailed answers to a 
number of questions. (See attached list.)
    Based on what is known, the nonproliferation benefits of the July 
18 proposal are vastly overstated by its proponents and the damage to 
the nonproliferation regime is potentially very high. Contrary to 
assertions by the administration, the current proposal would not bring 
India sufficiently into conformance with nonproliferation behavior 
expected of responsible states.
    So far, India has pledged only to accept voluntary safeguards over 
``civilian'' nuclear facilities of its choosing. This could allow India 
to withdraw any nuclear facility from (IAEA) safeguards for national 
security reasons. Such an arrangement would be purely symbolic and 
would do nothing to prevent the continued production of fissile 
material for weapons by India.The supply of nuclear fuel to India would 
free-up its existing stockpile and capacity to produce highly enriched 
uranium and plutonium for weapons. To help ensure that U.S. civilian 
nuclear cooperation is not in any way advancing India's weapons 
program, it would be essential to apply permanent, facility-specific 
safeguards on a mutually agreed and broad list of current and future 
Indian nuclear facilities involved in civilian activities and 
electricity production in combination with a cutoff of Indian fissile 
material production for weapons.
    Unfortunately, the communique does not call for any additional 
measures that would constrain India's nuclear arsenal. Specifically, 
civilian nuclear assistance should not be extended to India until it 
implements a cessation of the production of fissile material for 
weapons, which has been adopted by the five original nuclear-weapon 
states.
    In the July 18 communique India also pledged to a set of export 
control measures that it had already committed to or is obligated to 
pursue under UN Security Council Resolution 1540.
    The proposed arrangement could also trigger a significant erosion 
of the guidelines of the 45-member NSG, which are an important barrier 
against the transfer of nuclear material, equipment, and technologies 
for weapons purposes. No civilian assistance should be extended to 
India without the full concurrence of the NSG and approval of India's 
safeguards agreement with the IAEA.
    Non-nuclear-weapon states have for decades remained true to the 
original NPT bargain and forsworn nuclear weapons and accepted full-
scope IAEA safeguards in return for access to peaceful nuclear 
technology under strict and verifiable control. Many of these states 
made this choice despite strong pressure to spurn the NPT and pursue 
the nuclear weapons path. They might make a different choice in the 
future if non-NPT members receive civil nuclear assistance under less 
rigorous terms. The proposed civil nuclear cooperation arrangement may 
also undermine our ability to win necessary international support for 
persuading Iran to abandon its fuel cycle plans and to make its nuclear 
program fully transparent to the IAEA.
    On balance, India's commitments under the current terms of the 
proposed arrangement do not justify making far-reaching exc eptions to 
U.S. law and international non proliferation norms.
    We urge you to consider the full implications of the proposed 
agreement for cooperation between the United States and India, and 
pursue additional stipulations that might result in a positive outcome 
to U.S. and international security. Congress must also ensure it 
retains the authority to review whether the terms of any such 
arrangement are being implemented and take appropriate action if they 
are not.
    Building upon the already strong U.S.-Indian partnership is an 
important goal, and we remain convinced that it can be achieved without 
undermining the U.S. leadership efforts to prevent the proliferation of 
the world's most dangerous weapons.

            Sincerely,


    Hal Bengelsdorf--Consultant, and former Director of the Office for 
Nonproliferation Policy at the Energy Department and former Office 
Director for Nuclear Affairs at the State Department

    Amb. George Bunn--Consulting Professor, Stanford University Center 
for International Security and Cooperation; First General Counsel for 
the Arms Control and Disarmament Agency and negotiator of the NPT

    Joseph Cirincione--Senior Associate and Director of the 
Nonproliferation Project, Carnegie Endowment for International Peace

    Robert J. Einhorn--Senior Adviser, Center for Strategic and 
International Studies; former Assistant Secretary of State for 
Nonproliferation

    Lt. Gen. Robert Gard, USA (Ret.)--Senior Military Fellow, Center 
for Arms Control and Non-Proliferation

    Victor Gilinsky--Energy Consultant, and former U.S. Nuclear 
Regulatory Commissioner

    Amb. Thomas Graham Jr.--Chairman, Cypress Fund for Peace and 
Security, and former Acting Director of the Arms Control and 
Disarmament Agency

    Amb. Robert Grey--Director, Bipartisan Security Working Group, and 
former U.S. Representative to the Conference on Disarmament

    John Holum--former Undersecretary of State for Arms Control and 
International Security Affairs and former director of the Arms Control 
and Disarmament Agency

    Daryl G. Kimball--Executive Director, Arms Control Association

    Lawrence Korb--Senior Fellow, Center for American Progress, and 
former Asst. Secretary of Defense for Manpower, Reserve Affairs, 
Installations and Logistics

    Paul Leventhal--Founding President of the Nuclear Control 
Institute, and former Special Counsel of the U.S. Senate Committee on 
Government Operations

    Fred McGoldrick-- 1Consultant, and former Director of 
Nonproliferation and Export Policy at the State Department

    Kelly Motz--Associate Director, Wisconsin Project on Nuclear Arms 
Control

    Henry S. Rowen--Professor of Public Policy and Management 
emeritus,Graduate School of Business, Senior Fellow, the Hoover 
Institution Stanford University, and former Assistant Secretary of 
Defense for International Security Affairs

    Lawrence Scheinman--Distinguished Professor at the Center for 
Nonproliferation Studies, and former Assistant Director of the Arms 
Control and Disarmament Agency

    Henry Sokolski--President, Nonproliferation Education Policy 
Center, and former Deputy for Nonproliferation Policy in the Office of 
the Secretary of Defense

    Len Weiss--Consultant and former Staff Director of the U.S. Senate 
Committee on Governmental Affairs
                                 ______
                                 
            key issues for consideration on proposed nuclear
                         cooperation with india
    We cannot overestimate the long-term unintentional damage that 
could be done to the world's nonproliferation effort if the current 
proposal is allowed to go through as is without a complete vetting of 
its possible consequences.
    Accordingly, we urge that before any action is taken on any 
legislation sent up by the administration to implement the proposal, 
Congress should obtain from the administration detailed answers to a 
number of questions.
    These include:

          1. How reliable is India as a nuclear trading partner based 
        on its past record and how might the proposed deal affect 
        efforts to stop trade to and from states of concern?

                  a. Is there any prospect that there could be a 
                negative impact on attempts to stop Iran and North 
                Korea from obtaining assistance for their nuclear 
                programs?

                  b. How will assistance to Pakistan's nuclear program 
                by China and others be affected by this proposal if 
                implemented?

                  c. Is there any evidence of Indian violations since 
                1998 of U.S. and other export laws involving nuclear 
                weapons related technology and/or delivery systems, 
                including missiles?

                  d. To what extent might the current proposal 
                stimulate China's and Pakistan's production of nuclear 
                weapons or nuclear weapons material?

                  e. How effective are India's nuclear and missile 
                export laws and enforcement capabilities vis-a-vis 
                those of the NPT nuclear-weapon states and the 
                requirements of Resolution 1540?

          2. Will the delivery of U.S. technology or nuclear fuel for 
        the reactors in India free-up indigenous Indian nuclear fuel 
        for its weapons program?

                  a. Could such an action damage the NPT and our 
                ability to help enforce compliance with it?

                  b. What verifiable restrictions on India's use of its 
                own fuel will the United States insist upon?

                  c. Will the U.S. insist on case-by-case consent 
                rights or rights of disapproval on reprocessing and 
                enrichment and retransfers of U.S. origin items?

                  d. Is the administration considering the transfer of 
                uranium enrichment or reprocessing technology to India 
                as part of the U.S.-Indian accord?

          3. What kind of IAEA safeguards will be applied to Indian 
        civilian nuclear facilities?

                  a. Will they be INFCIRC 66 Rev.2 safeguards which are 
                applied in perpetuity?

                  b. If other safeguards are contemplated that are not 
                permanent, how would they prevent the diversion of 
                civilian materials or technologies to weapon use once 
                the putative U.S.-India agreement expires or is 
                otherwise terminated?

                  c. Will India be allowed to withdraw a civilian 
                facility from safeguards and declare it a military 
                facility?

                  d. What criteria would be used by the U.S. government 
                to determine which nuclear facilities and materials 
                should be subject to safeguards?

                  e. How much additional funding will the IAEA need in 
                order to meet the additional safeguards requirements?

          4. How will the United States verify Indian nonproliferation 
        commitments beyond safeguards under the proposed agreement?

                  a. Will the U.S. be able to determine independently 
                which Indian facilities are civilian and which are 
                military? If not, how will we know whether India's 
                declaration is appropriate?

                  b. What mechanisms are in place to monitor Indian 
                implementation of its export laws, and how long would 
                it take to ensure that the appropriate Indian laws are 
                in place and are working effectively?

          5. Does the administration consider India's 1974 nuclear 
        explosion in which U.S. heavy water was used in the production 
        of the bomb's plutonium a violation of the sale agreement 
        between India and the United States? If so, does India agree 
        with our interpretation of that agreement? If they don't, how 
        can we assure that similar disagreements won't happen with the 
        current proposal? Should the proposal be amended to provide for 
        return of all delivered materials in the event of such a 
        disagreement?

          6. Both U.S. and Indian spokesmen have referred to a 
        ``phased'' approach to implementation of the proposal if 
        approved. If so, what are the steps and what is the sequence? 
        Is the U.S. government working on a plan with a timetable that 
        would phase in our cooperation with India in accordance with 
        India's meeting its obligations?

                  7. Has the administration obtained any evidence of 
                Pakistani, Israeli, or North Korean interest in 
                civilian nuclear cooperation on terms similar to those 
                proposed for India. What is the argument for doing this 
                favor for India and not for these other states? How 
                will the administration respond if other states, like 
                China or Russia, seek exemptions for their preferred 
                political or commercial partners?

          8. What specific proposals, if any, has the U.S. discussed 
        with NSG partners to alter its guidelines so that civilian 
        nuclear trade with India might proceed and what are the 
        specific reactions of other NSG members? Will the 
        administration proceed with ``full'' civil nuclear cooperation 
        with India if the NSG does not unanimously support such an 
        exception to NSG rules for India? How will the proposed rule 
        changes relating to India affect President Bush's proposal to 
        the NSG to make the Additional Protocol a condition of supply?

    These questions suggest that the proposal by the administration 
requires much more discussion and examination before any legislative 
action is taken.

                               __________

 Many Skeptical Eyes Are on U.S.-India Nuclear Deal; Congress, Critics 
                    Want Answers About the Risks\1\
---------------------------------------------------------------------------

    \1\Copyright 2006, Gannett Company, Inc., All Rights Reserved, USA 
TODAY, April 5, 2006
---------------------------------------------------------------------------
                           by: barbara slavin
    WASHINGTON--The Bush administration's plan to sell nuclear 
technology to India for the first time in three decades is under 
scrutiny from lawmakers on Capitol Hill and critics who say the deal 
will increase the risk that dangerous materials will spread.
    Secretary of State Condoleezza Rice is to testify today before both 
houses of Congress in support of the deal, finalized last month when 
President Bush was in New Delhi.
    ``The intention is to do due diligence, and there are a lot of 
questions members want answered,'' said Rep. Henry Hyde, R-Ill., 
chairman of the House International Relations Committee.
    Senate Foreign Relations Committee Chairman Richard Lugar, R-Ind., 
suggested that Congress is in no hurry to move. ``I believe that we 
have only scratched the surface of this intricate agreement and the 
national security questions it has raised,'' he said in a statement.
    Rep. Tom Lantos of California, the ranking Democrat on the House 
International Relations Committee, said the administration has not yet 
given Congress details of how it intends to cooperate with India's 
nuclear industry.
    The administration is requesting an exception to a 1954 law that 
bans U.S. nuclear cooperation with any country that has not allowed the 
International Atomic Energy Agency (IAEA), the United Nations' nuclear 
watchdog, to monitor all its nuclear facilities.
    The Bush administration has portrayed the deal as a major 
breakthrough for U.S.-India relations and for global efforts to stop 
nuclear proliferation. If Congress approves, the United States would 
end a three-decade embargo on selling nuclear technology to India. 
India exploded a nuclear device in 1974 that it had developed under the 
guise of a civilian program. Under the U.S.-India agreement, India 
would separate its civilian and military nuclear facilities and let the 
IAEA inspect civilian sites.
    ``We are far better off working with the Indians and having the 
IAEA place safeguards on India's civil nuclear program than we are if 
India is isolated,'' Undersecretary of State Nicholas Burns, the prime 
negotiator of the deal, said recently. Burns said the deal will cement 
a strategic relationship with the world's most populous democracy.
    Critics say the agreement could encourage the spread of nuclear 
technology.
    Seven proliferation experts led by Henry Sokolski, executive 
director of the Nonproliferation Policy Education Center in Washington, 
sent a letter Tuesday to the chairmen and ranking members of the Senate 
and House foreign relations committees urging Congress not to approve 
the deal until the administration ``has specified what further steps it 
is planning to take'' to ensure that the agreement does not increase 
proliferation risks.
    David Albright, a former IAEA inspector who now heads the Institute 
for Science and International Security, a Washington think tank, said 
his institute has documented worrisome Indian practices. For more than 
20 years, he said, a uranium-enrichment plant outside Mysore, India, 
has placed ads in newspapers to buy sensitive nuclear technology. The 
content of the ads revealed sensitive information, Albright said. The 
plant and trading companies acting on its behalf have also failed to 
identify the end-user for such equipment, he said.
    In 2004, the State Department sanctioned an Indian scientist, 
Y.S.R. Prasad, for aiding Iran's nuclear program. Prasad is a former 
head of India's Nuclear Power Corporation and an expert on the 
extraction of tritium from heavy-water reactors. Tritium is used to 
make small, compact nuclear warheads.
    Prasad has denied giving Iran information about tritium, and the 
Indian government has asked that the State Department restrictions on 
U.S. dealings with the scientist be lifted, said Venu Rajamony, 
spokesman for the Indian Embassy.

                               __________

        Indian Navy Trains Iranian Sailors; U.S., India Straddle
                         Foreign Policy Line\1\
---------------------------------------------------------------------------

    \1\Copyright 2006 Defense News and Army Times Publishing Co. and 
Army Times Publishing Co., All Rights Reserved, March 27, 2006
---------------------------------------------------------------------------
    by: by vivek raghuvanshi, new delhi and gopal ratnam, washington
    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 policy-
makers 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 Sen. Richard Lugar, R-Ind., 
chairman of the Senate Foreign Relations Committee, and Rep. 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.''

                               __________

                          Rethinking India\1\
---------------------------------------------------------------------------

    \1\Copyright 2006 Los Angeles Times, All Rights Reserved, March 1, 
2006
---------------------------------------------------------------------------
                               editorial
    PRESIDENT BUSH ARRIVES in India today to pursue one of his longtime 
foreign policy objectives: bringing the United States and India closer. 
It's a worthy goal. India is the world's largest democracy, and its 
economy is growing. And although the White House doesn't want to draw 
too much attention to old-school realpolitik, India is in a 
strategically important neighborhood, sharing borders with China and 
Pakistan.
    But the price Bush has paid for closer ties with India is too high. 
The deal he struck last summer for nuclear cooperation with New Delhi 
would undermine the Nuclear Nonproliferation Treaty. It would reward 
India, which never signed the treaty, cheated on an earlier technology 
deal with the United States, then went on to test a nuclear bomb.
    The message to Iran, North Korea and other nuclear wannabes 
couldn't be clearer or more destructive. These regimes and others will 
rightly conclude that the United States is interested in stopping the 
spread of nuclear know-how and technology only to regimes it dislikes. 
This perceived double standard only confirms the view that the Bush 
administration doesn't really believe in nonproliferation or any other 
treaty-based form of arms control or security. It just believes in 
changing hostile regimes whose aspirations threaten ours. This 
undermines U.S. moral leadership on the single most dangerous threat to 
humankind: the spread of nuclear weapons.
    But there's still hope. The nuclear deal requires approval from 
both nations' legislatures, and it's in deep trouble in Washington and 
New Delhi.
    In Washington, the administration has failed to secure the support 
of Congress, notably Sen. Richard G. Lugar (R-Ind.), whose views 
deserve particular respect because of his decades of work on nuclear 
disarmament and risk reduction. In India's Parliament, the deal is also 
under fire. The nationalist right thinks Washington should recognize 
that India is already an independent nuclear power that need make no 
concessions. There may be no way to avoid a collision here, but Bush 
should try to convince Indian officials that the deal needs to be 
renegotiated if it is to gain congressional approval.
    One interesting idea for a revamped deal comes from Daniel Poneman, 
a former National Security Council official. He proposes that India 
sign on to a plan similar to the one that Russia is offering Iran: 
lease nuclear fuel from abroad for its civilian reactors instead of 
making its own. The spent fuel, which can be used to make nuclear 
weapons, could be safeguarded by the International Atomic Energy 
Agency.
    India's sensitivity about its sovereignty may make the idea a non-
starter; after all, the reason India didn't sign the nonproliferation 
treaty in the first place is because it does not believe its nuclear 
plans should be subject to conditions set by others. Still, an effort 
by Bush to pull back will help restore the global credibility of the 
nonproliferation ideal.
VIII.--Hearing of the U.S. Senate Committee on Foreign Relations, April 
                                26, 2006

                              ----------                              


 
 U.S.-INDIA ATOMIC ENERGY COOPERATION: STRATEGIC AND NONPROLIFERATION 
                              IMPLICATIONS

                              ----------                              


                       WEDNESDAY, APRIL 26, 2006

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Richard G. 
Lugar (chairman of the committee) presiding.
    Present: Senators Lugar, Hagel, Chafee, Allen, Voinovich, 
Martinez, Biden, Boxer, Nelson, and Obama.

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

    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order.
    The committee meets today to continue its examination of 
the United States-India Civilian Nuclear Agreement. On April 5, 
the committee met in open session with Secretary of State 
Condoleezza Rice. On March 29, we examined the agreement in 
closed session with Under Secretaries Nick Burns and Bob 
Joseph. Today, we'll have the opportunity to hear the views of 
the eight esteemed experts from outside the U.S. Government.
    Now, some months ago, I submitted 82 questions, related to 
the agreement, to the State Department as an initial step 
toward establishing a dialog that would help Congress make an 
informed decision. The State Department provided answers to all 
those 82 questions. After the hearing with Secretary Rice, I 
submitted about 90 additional questions for the record. The 
ranking member and several other members of this committee have 
also submitted questions after these hearings. We appreciate 
the administration's attention to these questions as the 
committee carefully works through the intricacies of the 
nuclear agreement with India.
    The committee is cognizant of how valuable a closer 
relationship with India could be for the United States. At our 
last hearing, many members commented on the importance of 
improving ties with India. Our nations share common democratic 
values, and the potential of our economic engagement is 
limitless.
    Energy cooperation between the United States and India is 
particularly important. India's energy needs are expected to 
double by 2025. The United States has an interest in expanding 
energy cooperation with India to develop new technologies, to 
cushion supply disruptions, to cut greenhouse gas emissions, 
and to prepare for declining global fossil fuel reserves. The 
United States own energy problems will be exacerbated if we do 
not forge energy partnerships with India, China, and other 
nations experiencing rapid economic growth. That is why I have 
introduced S. 2435, the Energy Diplomacy and Security Act, 
which would encourage international energy dialogs and advance 
a broad range of energy diplomacy goals.
    But even as we pursue closer ties with India, we must 
examine the implications and risks of initiating a cooperative 
nuclear relationship. India has not signed the Nuclear Non-
Proliferation Treaty; it has built and tested nuclear weapons; 
it has declared its intention to continue its nuclear weapons 
programs and the production of fissile material. If Congress 
approves this agreement, we will be establishing a new course 
after decades of declining any cooperation with India's nuclear 
program. Consequently, our committee has spent much time 
probing the details of the United States-India Civilian Nuclear 
Agreement.
    Among many questions, we are attempting to evaluate the 
potential benefits of drawing India into a deeper relationship 
with the International Atomic Energy Agency and placing more 
Indian reactors under safeguards. The committee has also 
expressed great interest in the timing and sequence of how the 
India Nuclear Agreement would be implemented. Since the 
committee last met with Secretary Rice, India has initiated 
discussions with the International Atomic Energy Agency on a 
safeguards agreement and an additional protocol. This is a 
welcome development, but I urge India and the IAEA to work hard 
to conclude an effective agreement in a timely fashion. All 
parties involved in the negotiations, including the Bush 
administration, should facilitate the maximum amount of 
transparency possible so that Congress is better equipped to 
make informed judgments.
    Today we will hear from two panels of highly knowledgeable 
experts. Our first panel will focus on the strategic dynamics 
of the agreement, and the second panel will take up the 
question of nonproliferation implications of nuclear 
cooperation between the United States and India.
    On our first panel, we welcome the distinguished former 
Secretary of Defense, William Perry. Presently, he is 
codirector of the Preventive Defense Project. He is joined by 
Dr. Ashton Carter, also a codirector of the Preventive Defense 
Project and a former Assistant Secretary of Defense for 
International Security Policy. Joining them will be Dr. Robert 
Gallucci, dean of the Edmund A. Walsh School of Foreign 
Service, at Georgetown. Dr. Gallucci served as a chief U.S. 
negotiator during the 1994 crisis over North Korea's nuclear 
program. And, finally, Dr. Ashley Tellis is with us, from the 
Carnegie Endowment for International Peace. Dr. Tellis played a 
leading role in the formulation of the United States-India 
Nuclear Agreement, serving in key State Department positions.
    On our second panel, we will welcome Dr. Ronald Lehman, 
director of the Center for Global Security Research at Lawrence 
Livermore National Laboratory and formerly the head of the U.S. 
Arms Control and Disarmament Agency; Mr. Robert Einhorn, a 
senior advisor at the Center for Strategic and International 
Studies and formerly Assistant Secretary of State for 
Nonproliferation; Dr. Gary Milhollin, director of the Wisconsin 
Project on Nuclear Arms Control; and Dr. Stephen Cohen, a 
senior fellow at Brookings Institution.
    We are pleased to have with us so many good friends of this 
committee. Most of our witnesses have provided invaluable 
service to the Foreign Relations Committee over the years as we 
have struggled with nonproliferation and other geopolitical 
issues. We thank each of them in advance for their willingness 
to again lend a hand to us with their extraordinary expertise.
    I would like now to call upon the distinguished ranking 
member of the committee for his opening statement.
    Senator Biden.

 STATEMENT OF HON. JOSEPH R. BIDEN, U.S. SENATOR FROM DELAWARE

    Senator Biden. Thank you very much, Mr. Chairman. And I'd 
ask unanimous consent that my entire opening statement be 
placed in the record, and I'll try to----
    The Chairman. It will be placed in the record in full.
    Senator Biden [continuing]. Truncate it a bit, because I 
know we're up against a vote later on, and we have some very 
important witnesses.
    And I'd also say, at the outset, that I have a number of 
questions that at least I deem to be important, and it would 
take some time for the witnesses to respond to all of them. So, 
what I may do is submit them in writing to the witnesses, so 
that we can get through everyone, and shorten the question 
period so everybody gets a chance to ask questions.
    But I want to begin by thanking you, Mr. Chairman, for 
holding this hearing, actually a series of hearings we're going 
to have, on this--the administration's nuclear deal with India.
    The administration didn't consult with us, at least didn't 
consult with me, as it negotiated its July 18 Joint Statement 
between President Bush and Prime Minister Singh. And, in my 
view, it's paid little attention to our concerns as it 
negotiated with India, regarding plans for separating India's 
civil nuclear facilities from its military ones. And it 
submitted a legislative proposal to us, and a decision proposal 
to the Nuclear Suppliers Group, that I would argue is poorly 
drafted enough to cast doubt on the administration's approach.
    But, despite this, as I indicated 3 weeks ago, I think 
we're in a quandary here. Quite frankly, this is not a treaty I 
would have suggested that we negotiate the way it was 
negotiated. But the downside and the impact on our strategic 
relationships in the region, I think, at least as this hearing 
starts, I start from the premise--that it would do serious 
damage if we rejected this treaty. But the upsides of the 
treaty are not nearly as positive as I think they could or 
should be, which leads me, Mr. Chairman, to suggest that I--
like many others, I suspect--am considering amendments that 
might deal with some of what I believe to be the shortcomings 
in this negotiated agreement, primarily not demanding positions 
from India, but assurances from the administration as to how 
they'll proceed.
    And we need a lot more answers, Mr. Chairman. Although 
you've indicated that the administration answered a lot of your 
questions, I don't know that many questions that have been 
submitted have been answered since the separation agreement has 
been submitted to us, in March; and it has yet to share the 
negotiating record or explain just what it agreed to when it 
accepted the idea of ``India-specific'' safeguards or 
``corrective measures that India may take in the event of 
disruption of foreign fuel supplies'' or assurances regarding 
fuel supplies or strategic reserves of nuclear fuel for India. 
I'm still uncertain as to what all that means. The 
administration has yet to share with us the full list of 
India's civil nuclear facilities, even in a classified forum. 
And it has not met what I thought was a commitment to share 
drafts of the peaceful nuclear cooperation agreement that it is 
negotiating with India. I think all of this is worth us being 
able to look at and see.
    But, as I said, Mr. Chairman--I must stay up front--this 
new deal for India makes more sense than it does harm. But I 
don't think it is, to use the phrase of a famous American 
formerly in the administration, I don't think it's a slam dunk. 
And that's why we're here today, to take the testimony from 
some of our country's best thinkers on nuclear policy.
    I will submit, as I said, the rest of my statement for the 
record, but I'm anxious to hear from our witnesses, and I will, 
as I said, Mr. Chairman, in addition to the few questions I 
might ask, have a number of very specific questions I'd like to 
ask them to consider responding to in writing. I realize, in a 
sense, that makes more work for them. I apologize for that. But 
it would be helpful.
    Thank you.
    [The prepared statement and addition material of Senator 
Biden follow:]

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

    Thank you, Mr. Chairman. And thank you for chairing this series of 
hearings on the administration's nuclear deal with India.
    The administration did not consult us as it negotiated the July 18 
Joint Statement between President Bush and Prime Minister Singh.
    It paid little attention to our concerns as it negotiated with 
India regarding India's plan for separating its civil nuclear 
facilities from its military ones.
    And it submitted a legislative proposal to us and a decision 
proposal to the Nuclear Suppliers Group that were so poorly drafted as 
to cast doubt on the administration's seriousness of purpose.
    Despite this, I indicated 3 weeks ago that I will probably support 
the agreement at the end of the day. I did so because I agree that the 
time has come to develop a new relationship between India and the 
parties to the Nuclear Non-Proliferation Treaty.
    And I did so also because undoing this deal could do more damage--
in terms of our relationship with India--than approving it, with 
carefully drafted conditions.
    This deal brings risks, and I believe the administration and 
Congress must minimize those risks.
    So far, Mr. Chairman, the administration has done a lot more to 
lobby us than to work with us.

   It has yet to answer our questions for the record.
   It has yet to share its negotiating record or explain just 
        what it agreed to when it accepted the idea of ``India-specific 
        safeguards,'' or ``corrective measures that India may take . . 
        . in the event of disruption of foreign fuel supplies,'' or 
        U.S. ``assurances regarding fuel supply,'' or ``a strategic 
        reserve of nuclear fuel'' for India.
   The administration has yet to share with us the full list of 
        India's civil nuclear facilities--even in classified form.
   And it has reneged on an earlier promise to share drafts of 
        the peaceful nuclear cooperation agreement that it is 
        negotiating with India.

    Mr. Chairman, I still think that a new deal for India makes sense. 
But it isn't a ``slam dunk,'' as they say, and that is why we are here 
today to take testimony from some of our country's best thinkers on 
nuclear policy.
    Today's witnesses all have impressive backgrounds, and I have 
relied upon the wisdom of many of them over the years. I look forward 
to hearing their insights today.
    I want to especially thank Bill Perry for coming in from California 
and for upsetting his schedule in Washington in order to help us today. 
Dr. Perry is a man who answers his country's call, just as he did 
regarding North Korea policy after he had retired as Secretary of 
Defense.
    I would recommend that we also schedule a follow-up hearing with 
experts on the Atomic Energy Act, to discuss possible amendments to S. 
2429, and experts on India who could tell us what the consequences of 
enacting those amendments might be.
    Finally, Mr. Chairman, I hope that you will make clear to the 
administration that the Senate and this committee should not be taken 
for granted.
    We expect the administration to answer our questions, to provide us 
the details on the related agreements that India is negotiating with 
the United States and with the IAEA, and to work with us to make S. 
2429 a respectable bill.
    Until the administration does that, we simply should not act on its 
proposed legislation.
    Mr. Chairman, we recently received a letter from Ambassador John 
Ritch, a former staff member of this committee, in support of the India 
nuclear deal. I ask that his letter and an attached op-ed from the 
International Herald Tribune be included in today's hearing record.
    Thank you.
                                 ______
                                 
                                                     23 April 2006.
Hon. Richard G. Lugar, Chairman,
Hon. Joseph R. Biden, Jr., Ranking Member,
Committee on Foreign Relations,
 U.S. Senate, Washington, DC.

Subject: Submission on U.S.-India Nuclear Cooperation
    Dear Senators Lugar and Biden: For the committee's consideration 
and record in connection with the 26 April hearing on proposed U.S.-
India nuclear cooperation, I offer the attached summary of my views, as 
published recently in the International Herald Tribune. My perspective 
derives from:

   22 years of service on the staff of the Foreign Relations 
        Committee;
   7 years as U.S. representative to the IAEA and other U.N. 
        agencies in Vienna; and
   5 years interacting with the Indian nuclear establishment in 
        my current capcity.
            With respect and warm regards,
                                             John B. Ritch,
                       Director General, World Nuclear Association.
                                 ______
                                 

         [From the International Herald Tribune, Apr. 6, 2006]

            It Makes Sense To End India's Nuclear Isolation

                           (By John B. Ritch)

    London.--President George W. Bush has taken a momentous step in 
shelving a U.S. policy that for three decades cast India as a nuclear 
pariah-state and isolated the world's largest democracy from nuclear 
commerce, even for the peaceful purpose of generating electricity.
    In Washington a fierce debate has erupted over the impact on the 
Nuclear Nonproliferation Treaty.
    The U.S.-India deal conforms to the treaty by ensuring that nuclear 
commerce remains in the civil realm. But critics say it jeopardizes the 
treaty by legitimizing India's nuclear deterrent. Supporters counter 
that India's weapon is a long-standing fact, that India has used 
nuclear technology responsibly and that it is time to close ranks with 
a democracy.
    Before the Bush initiative, two truths coexisted uneasily. First, 
the nonproliferation regime is one of history's great diplomatic 
achievements. Since its inception in 1970, the treaty has kept the 
number of nuclear-armed nations under 10.
    Episodes of non-compliance have shown the treaty's value. After the 
first Gulf War revealed Iraq's covert nuclear efforts, the treaty 
regime gained strength as the International Atomic Energy Agency 
acquired new detection capabilities and broader authority for its 
inspectors. Treaty inspections ``caught'' both North Korea and Iran, 
and have spurred collective diplomacy against these violations.
    A second, less convenient truth is that the treaty was, from the 
outset, unfair to India as a great nation. The treaty drew a line in 
time, recognizing only the UN Security Council's five permanent members 
as ``nuclear-weapon states.'' Thus, when India became the world's sixth 
nuclear power in 1974, it faced Hobson's choice: Disarm or remain 
outside the treaty.
    For reasons of principle and strategic interest India remained 
outside, declaring that it would eliminate its small deterrent as soon 
as the five favored ``weapon states'' fulfilled a treaty pledge to 
dismantle their own much larger nuclear arsenals.
    Indians went on, for three decades, to become proud developers and 
careful custodians of their own sophisticated nuclear technologies. To 
supply power for economic growth, India now plans to build hundreds of 
reactors by mid-century, even without the new agreement.
    The Bush initiative would accept India's reality. Critics complain 
that the accord leaves India's military program ``unconstrained.'' 
Advocates counter that India's civil power reactors will fall under 
inspection safeguards.
    This debate is sterile. Inspections on India's civil facilities 
cannot affect its military program. But neither will civil nuclear 
trade with India spur an Asian arms race. India's leaders have no 
motive to abandon India's long-standing policy of maintaining minimal 
nuclear deterrence vis-a-vis Pakistan's smaller nuclear force and 
China's larger one.
    Although legal under the nonproliferation treaty, the deal will 
require change in a U.S. law enacted in 1978 that made treaty 
membership a condition of nuclear trade. In 1992, the Nuclear Suppliers 
Group of nations embraced the same coercive approach. Now these 
countries are set to follow the U.S. lead, with only China expressing 
resistance.
    The new policy would revert--in the unique case of India--to the 
basic treaty requirement of confining nuclear trade to the civil realm. 
It would also welcome India as a partner in world nuclear trade 
controls and collaborative projects to develop nuclear technology.
    Some say that ending India's nuclear isolation sends a dangerous 
message to potential proliferators. This charge does not withstand 
analysis. How will the ambitions of Iran, North Korea, and Pakistan be 
inflamed by the principle now being affirmed?
    The principle is this: In sensitive nuclear technology, we will 
trade legally--and with nations that have earned the world's trust. As 
a practical matter, no nation appears likely to ``proliferate'' because 
India is allowed civil nuclear commerce.
    Thus has the new policy been endorsed by Hans Blix and Mohamed 
Elbaradei, the IAEA leaders entrusted over the last quarter century to 
oversee the nonproliferation regime.
    Nuclear cooperation with India offers some economic opportunity--
and potentially enormous environmental value. India has recognized the 
urgency of a worldwide clean-energy revolution if humankind is to avoid 
unleashing devastating climate change.
    The U.S.-India deal promises a partnership between the two largest 
democracies to deliver this environmental benefit--within India and to 
a wider world--on a scale that can make a difference.
    With a strong legal, strategic and environmental rationale, this is 
a Bush initiative that has gained a broad coalition of support abroad.

    The Chairman. Well, thank you very much, Senator Biden.
    And I appreciate your sentiments. And we're all probing. 
And hopefully witnesses will be able to answer our questions 
today, as well as additional questions as we seek more 
information.
    Let me suggest, as a format for our hearing, Senator Biden 
has mentioned, and I talked to him a moment before the meeting, 
about the fact that we will have rollcall votes at noon. We 
have two distinguished panels, and many Senators who wanted to 
ask questions. So, I'm going to ask if the witnesses could try 
to summarize their initial comments in approximately 7 minutes 
or so, plus or minus a minute or two, and then ask members, in 
our round of questioning, to confine their questions to 5 
minutes. At least arithmetically, I think we can make it, that 
way. And if we don't, why, the world will not come to an end--
    [Laughter.]
    The Chairman [continuing]. And we will do the best that we 
can to honor the opportunities for both witnesses and members 
to ask their questions.
    I'd like to ask for the testimony, on the first panel, to 
commence in this order. First of all, Dr. Carter, then 
Secretary Perry, then Dr. Gallucci, and then Dr. Tellis.
    Dr. Carter, we're delighted, once again, to have you here, 
and if you would proceed.

  STATEMENT OF HON. ASHTON B. CARTER, CODIRECTOR, PREVENTIVE 
 DEFENSE PROJECT, BELFER CENTER FOR SCIENCE AND INTERNATIONAL 
           AFFAIRS, HARVARD UNIVERSITY, CAMBRIDGE, MA

    Dr. Carter. Thank you, Mr. Chairman and members.
    Mr. Chairman, I have a written statement, which takes the 
form of an article that will appear in the forthcoming issue of 
Foreign Affairs, which is dedicated to the emergence of India 
onto the world stage. They've not released it yet for me to 
enter it into the record, but, with your permission, when it 
does get released, I'd like to make that my written statement.
    The Chairman. It will be placed as a part of the record. 
And let me just say, the prepared statements each of you made 
will be made a part of the record. You need not ask for 
permission. That will occur.
    Dr. Carter. Thank you.
    I would like to offer my three-part assessment of both the 
nuclear and nonnuclear aspects of the India deal. First, I will 
assess what the United States gave, and the implications of 
what it gave, for the nonproliferation regime; second, I will 
examine what the United States stands to get from India in 
return; and, third, I will assess the likelihood that we will 
actually get what we are seeking as our side of the bargain.
    Today I will argue that the deal, as negotiated by the 
United States, is quite uneven, but I will not be recommending 
that the United States attempt to rebalance the deal by seeking 
more technical nuclear steps by India. Instead, I think that 
rebalancing should be done by clarifying that the strategic 
partnership inaugurated by this deal carries very high 
expectations of India, especially in connection with Iran and 
its nuclear program.
    I judge the damage to the nonproliferation regime 
occasioned by this deal to be palpable, but quite manageable. 
This is not a torpedo amidships, as some have said, but 
American efforts to seek additional technical measures will not 
appreciably repair whatever damage has already been done.
    Mr. Chairman and members, most of the controversy about the 
India deal has swirled around its nuclear aspects. This is 
understandable, since preventing nuclear war and terrorism is 
the highest American national security priority in this era, as 
Bush himself has acknowledged. The decade has already witnessed 
a stunning defeat for the United States in North Korea's 
runaway nuclear program. The same could be unfolding more 
slowly in Iran. Meanwhile, an unbowed Osama bin Laden has 
declared to his followers that obtaining weapons of mass 
destruction is a ``religious duty.''
    Indeed, if the nuclear aspects of the India deal are 
assessed in isolation, one must conclude that the deal was a 
very unbalanced one, and a bad one for the United States. 
Washington recognized Delhi's nuclear status in return for 
little in the way of new steps by India to combat nuclear 
proliferation and terrorism that Delhi was not already 
committed or inclined to give, and for almost no technical 
restraints on India's growing nuclear arsenal.
    Through the U.S. concession, the nonproliferation regime 
also paid a palpable, although probably manageable, price to 
its integrity and support. But it would be a mistake to assess 
the India deal in a nuclear-only frame.
    President Bush and his key advisors were clearly looking 
through a wider lens, and so should the public and the U.S. 
Congress. Viewed through such a wider geopolitical lens, the 
deal has the United States giving the Indians what they have 
craved for so long--nuclear recognition--in return for a 
strategic partnership between Washington and Delhi, as the two 
democracies face similar potential challenges from China, 
Pakistan, Iran, and elsewhere in the coming decades. In short, 
Washington ``gave'' on the nuclear front to ``get'' something 
on the nonnuclear front.
    Powerful arguments can be made that strategic partnership 
with India will prove to be in the deep and long-term U.S. 
security interest. A nuclear-recognition quid for a strategic-
partnership quo is, therefore, a reasonable framework for an 
India deal.
    However, as a diplomatic transaction the India deal as 
negotiated by President Bush is quite uneven. First of all, a 
United States-Indian strategic partnership would seem to be in 
Delhi's interest as well as America's. So why pay them for it? 
Second, the deal is uneven in its specifics. What the United 
States gives is spelled out quite clearly, but what India gives 
in return is vaguer. Third, the deal is uneven in timing. The 
United States gave its big quid of nuclear recognition up 
front, as we essentially already gave it last summer, but what 
we stand to get in return from partnership with India lies 
further out in an uncertain future.
    Despite the deal's flaws, Congress should not attempt to 
renegotiate the deal to win a more balanced version than the 
Bush administration obtained. The big U.S. card of nuclear 
recognition has already been played, and cannot be taken back 
by Congress at this point, without casting a lasting cloud over 
the whole idea of Indo-U.S. partnership.
    Haggling over some of the details of the implementation of 
the nuclear parts of the deal is unlikely to restore much of 
whatever lost reputation for nonproliferation consistency the 
United States has already suffered, and would probably be 
viewed as grudging and punitive in Delhi. The result would be 
to undermine the goodwill that was supposedly the whole purpose 
of giving nuclear recognition to India in the first place.
    Rather than subtracting from the Indian side of the ledger 
in an effort to rebalance the India deal, Congress should, 
instead, emphasize what the United States expects on its side 
of the ledger to give meaning to the new ``strategic 
partnership.'' The United States should expect India to join it 
in countering any destabilizing effects China's future rise 
might have on Asian security; assisting in any emergency in 
Pakistan, such as radicalization of its government or loss of 
control of its nuclear weapons; reversing traditional Indian 
opposition to controls on transfer of nuclear technology, and 
especially using its diplomatic clout against potential 
proliferators like Iran; growing its military-to-military 
relationships, including arms cooperation, to match, in time, 
those the United States has with its closest allies; and giving 
preferential treatment to United States defense and nuclear 
industries when the Indian Government makes investments in 
these sectors. That would rebalance the ledger. That's the kind 
of rebalancing I think we should be seeking.
    If I may, Mr. Chairman, there are two particular issues I 
wanted to address in the assessment.
    The first is the question of how much damage nuclear 
recognition for India did to the nuclear nonproliferation 
regime. The United States has declined to recognize India's 
nuclear arsenal over time for two reasons. First, India's 
nuclear arsenal is watched closely by arch rival and nuclear-
armed Pakistan and by China, with which India has fought no 
fewer than three wars since its independence from Great 
Britain. Recognizing the Indian arsenal, the argument went, 
might spar its open growth and thus an arms race in South Asia. 
The second reason had to do with the integrity of the NPT 
regime, and that is the point I'd like to touch on briefly, if 
I may.
    It is inconceivable to me that North Korea's Kim Jong Il 
pays much heed to the internal consistency of the NPT regime as 
he calculates how far he can get with his nuclear breakout. 
North Korea's governing ideology is less communism than a 
fanatical embrace of autarky and ``self-reliance,'' including 
open defiance of international norms like the nonproliferation 
regime. North Korea's tolerance for international ostracism is 
legendary. If Kim's nuclear program can be stopped at all at 
this point, it will be through a tough and focused diplomacy of 
sticks and carrots in which the NPT will play little part. 
Likewise, after 1998 Saddam Hussein simply ceased paying 
attention to the NPT.
    Iran's cat-and-mouse game with the EU-3, the United States, 
and the IAEA over its recently revealed nuclear program 
bespeaks at least a smidgen of sensitivity to international 
opinion as embodied in the NPT. Nuclear recognition for India 
gives Tehran a new talking point: If India gets a free pass, 
why not Iran? But, like North Korea, Iran's nuclear program has 
deeper roots, and against these the NPT will not weigh in very 
heavily. Besides, for now, Tehran denies it is seeking a 
nuclear arsenal at all but only nuclear power, so it will be 
hard-pressed to use India as a precedent for its current 
diplomatic situation.
    The impact of the Bush-Singh deal on the ``rogues'' is 
therefore minimal. Its main impact will be felt on two other 
groups of countries. First, there are the ``in-betweens'': 
States that are not rogues, but that flirt with nuclear status. 
In the recent past, the in-betweens have included South Africa, 
Argentina and Brazil, the post-Soviet States of Ukraine, 
Kazakhstan, and Belarus--which you, Mr. Chairman, did so much 
to denuclearize, as did Secretary Perry--South Korea, Taiwan, 
and, only recently joining this category, Libya. These in-
betweens turned away from nuclear weapons for many reasons 
specific to their own individual circumstances, but in each 
case, the lasting international ostracism threatening them if 
they stood outside the NPT regime, was an influential factor 
for both governments and their people. Nuclear recognition for 
India suggests that forgiveness will eventually come to 
proliferators who wait, and tomorrow's in-betweens might be 
tempted by the Bush-Singh precedent.
    The most nonproliferation damage, curiously, might be done 
among the stalwarts of the regime: Governments that have no 
nuclear ambitions at all, but that faithfully uphold the rules, 
and also the nuclear powers that already enjoy a privileged 
place in it. These groups not only provide political support to 
discourage in-betweens and confront rogues, they provide vital 
and direct technical support by denying critical exports to 
those who infringe the NPT's rules.
    Damage limitation from this Bush-Singh deal must, 
therefore, center on the in-betweens and the stalwarts, not the 
rogues. A plan for doing so was a logical part of the U.S. 
diplomatic initiative, but it is clear that the Bush 
administration did not have one until after the deal was 
concluded, still less did it consult widely before Bush made 
his dramatic volte-face in July 2005.
    But most of the nations whose adherence to the NPT regime 
is critical will either support the deal or acquiesce in it. 
First, most accept the United States argument that India's 
nuclear nonproliferation behavior has been good--there have 
apparently been no Indian AQ Khans--and that India's possession 
of nuclear weapons is an established fact and cannot be 
reversed. Second, all can see that India is hardly a rogue 
state, but a stable democracy likely to play a large and 
constructive role in the world of the 21st century. Third, many 
will regard India's 30 years in the ``penalty box,'' which 
exacted a heavy price from Delhi in both prestige and 
technology, as sufficient to make the point that the regime's 
adherents are serious about enforcing its norms.
    These arguments have won over many in the international 
nonproliferation community, notably IAEA Director General and 
Nobel laureate, Dr. Mohamed ElBaradei. And so, while there is 
some grumbling within the NPT regime over the deal, a revolt or 
collapse is not likely, and the damage to the regime can, in my 
judgment, be limited.
    The final point I'd like to make is that even as critics 
have exaggerated the nonproliferation costs of the nuclear part 
of the deal, so also its proponents have exaggerated its 
benefits in terms of energy security and nuclear security.
    Bush administration spokesmen have defended the deal's 
nuclear power provisions as critical to stopping India's rise 
from posing an oil and environmental crisis. But this claim 
does not survive close scrutiny. Energy security is terribly 
important to both India and the United States. All want India's 
huge population to satisfy its energy needs, which will grow 
faster than its GDP, increasing as much as fourfold within 25 
years, without contributing further to dependence on Middle 
East oil, pollution, and global warming. But the arithmetic 
does not support the case that nuclear power will add up to 
make the critical difference for India, though it can, and 
should, play a role. For the foreseeable future, electricity 
generation in India will be dominated by coal burning, whereas, 
nuclear plants--which today produce only 3 percent of India's 
electricity--will remain a single-digit contributor even under 
the most extravagant projections of United States-assisted 
nuclear expansion in India.
    Indian coal is plentiful, but of poor quality and highly 
polluting. Burning coal more cheaply and more cleanly will do 
more than any conceivable expansion of nuclear power to aid 
India's economy and the environment.
    India's share of world oil consumption will grow from 3 to 
4 percent over the next 20 years. But nuclear power does 
nothing to address the principal Indian oil-consuming sector--
cars and trucks--since these don't run off the electrical grid, 
and won't for a long time.
    Finally, the type of assistance the United States is best 
positioned to provide to India's nuclear generation capacity--
light water reactors operating on low-enriched uranium fuel--is 
at odds with the Indian establishment's uneconomical vision of 
a civil nuclear power program built primarily around breeder 
reactors. Indeed, much of what has been said on the energy 
front just doesn't survive the numbers.
    The administration also claims the deal will require India 
to improve its laws and procedures for controlling exports or 
diversions of sensitive nuclear technology--preventing an 
Indian AQ Khan. But at the same time, the administration 
acknowledges India's apparently excellent record of controlling 
nuclear exports--though not always ballistic missile exports.
    India is already bound by the United States-sponsored U.N. 
Security Council Resolution 1540, which requires such good 
conduct, so on paper at least, Delhi has sold the same horse a 
second time in the deal.
    In any event, the United States is justifying the deal's 
nuclear recognition to other nations around the world on the 
grounds that India's nuclear proliferation behavior is already 
exemplary. It will be difficult for the United States to argue 
this point both ways at the same time.
    What is it then, that the United States should expect to 
get from the ``strategic partnership'' if a lot of these other 
things we're supposed to get don't hold up? There are five 
principal benefits the United States should seek to 
appropriately rebalance the deal. Some of those are future and 
hypothetical, but ones that we can fully expect we might need 
from strategic partnership from India in the future. I 
mentioned these five objectives earlier. The first two have to 
do with China and with Pakistan. Though no one wants to see 
either of the scenarios come to fruition in the future, neither 
can anyone rule them out. In either case, having India as a 
partner of the United States will strengthen our hand. Third, 
and most urgently, India should truly join the nuclear club, 
reversing old nonaligned habits and putting its diplomatic 
shoulder to the wheel in the case of Iran and other urgent 
counterproliferation efforts. Fourth, the United States should 
expect a continued intensification of Indo-U.S. military-to-
military contacts. Much more could be said about that, and Dr. 
Perry knows more about this issue than anybody else. Fifth and 
finally, as I said earlier, the United States should expect 
preferential treatment for United States industry in India's 
civil nuclear expansion and modernization of its military.
    Will we get all that? To fulfill all of these objectives 
will require India to change many of its longstanding 
positions, and that is not likely to happen all at once. Those 
who say that India's longstanding diplomatic positions will 
yield to this grand gesture the United States has now made of 
nuclear recognition are naive.
    Americans view the change of longstanding and principled 
nonproliferation policy to accommodate India as a concession, 
but Indians view it as an acknowledgment of something to which 
they have long been entitled. This is not a durable basis for a 
diplomatic transaction, and thus as a transaction, the deal was 
unbalanced. Still, in all, I think that the United States 
stands to enjoy tremendous gains from the strategic partnership 
with India. To the extent damage was done to the 
nonproliferation regime, it is manageable and was done when 
recognition was granted, and small measures cannot repair it.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary Carter follows:]

  Prepared Statement of Hon. Ashton B. Carter, Codirector, Preventive 
 Defense Project, Belfer Center for Science and International Affairs, 
                   Harvard University, Cambridge, MA

                      assessing the india deal\1\
---------------------------------------------------------------------------
    \1\An edited version of this statement appeared in the July/August 
issue of Foreign Affairs.
---------------------------------------------------------------------------
    During a state visit to Washington in July of 2005, Indian Prime 
Minister Manmohan Singh and U.S. President George W. Bush announced a 
potentially far-reaching ``strategic partnership'' between what will 
probably be the 21st century's most powerful democracies. To inaugurate 
what came to be known as the India Deal, Bush abruptly fulfilled a 
thirty-year quest by Delhi to be recognized as a sixth ``legitimate'' 
nuclear power, alongside the five victors of World War II. In March of 
2006, in a reciprocal visit to India, Bush settled most of the 
remaining details of the nuclear part of the India Deal in Delhi's 
favor.
    Debate in both Washington and Delhi has swirled around the nuclear 
aspects of the India Deal. This is understandable, since preventing 
nuclear war and terrorism is the highest American national security 
priority in this era, as Bush himself has acknowledged. The decade has 
already witnessed a stunning defeat for the United States in North 
Korea's runaway nuclear program. The same could be unfolding more 
slowly in Iran. Meanwhile, an unbowed Osama bin Laden has declared to 
his followers that obtaining weapons of mass destruction is a 
``religious duty.''
    Indeed, if the nuclear aspects of the India Deal are assessed in 
isolation, one must conclude that the Deal was a bad one for the United 
States. Washington recognized Delhi's nuclear status in return for 
little in the way of new steps by India to combat nuclear proliferation 
and terrorism that Delhi was not already committed or inclined to give, 
and for almost no technical restraints on India's growing nuclear 
arsenal. Through the U.S. concession, the nonproliferation regime also 
paid a palpable, although probably manageable, price to its integrity 
and support.
    But it would be a mistake to assess the India Deal in a nuclear-
only frame. President Bush and his key advisors were clearly looking 
through a wider lens, and so should the public and the U.S. Congress, 
which must amend U.S. nonproliferation laws that forbid the policies 
Bush agreed to. Viewed through such a wider geopolitical lens, the Deal 
has the United States giving the Indians what they have craved for so 
long--nuclear recognition--in return for a strategic partnership 
between Washington and Delhi as the two democracies face similar 
potential challenges from China, Pakistan, Iran, and elsewhere in the 
coming decades. In short, Washington gave on the nuclear front to get 
something on the non-nuclear front. Powerful arguments can be made that 
strategic partnership with India will prove to be in the deep and long-
term U.S. security interest. Indo-U.S. partnership seems not only 
logical but eminently achievable in India's democracy: in an 
influential 2005 Pew Research Center poll of 15 leading nations, India 
reported the highest proportion of favorable views of the United States 
at 71 percent. A nuclear-recognition quid for a strategic-partnership 
quo is therefore a reasonable framework for an India Deal.
    However, as a diplomatic transaction the India Deal as negotiated 
by President Bush is quite uneven. First of all, a U.S.-Indian 
strategic partnership would seem to be in Delhi's interest as well as 
America's. So why pay them for it? Second, the Deal is uneven in its 
specifics--what the U.S. gives is spelled out quite clearly, but what 
India gives in return is vaguer. Third, the Deal is uneven in timing--
the United States gave its big quid of nuclear recognition up front, 
but what it stands to get in return from partnership with India lies 
further out in the uncertain future.
Rebalancing the Deal
    Despite the Deal's flaws, Congress should not attempt to 
renegotiate the Deal to win a more balanced version than the Bush 
administration obtained. The big U.S. card of nuclear recognition has 
already been played and cannot be taken back by Congress at this point 
without casting a lasting cloud over the whole idea of Indo-U.S. 
partnership. Haggling over some of the details of the implementation of 
the nuclear parts of the Deal is unlikely to restore much of whatever 
lost reputation for nonproliferation consistency that the U.S. has 
already suffered, and would probably be viewed as grudging and punitive 
in Delhi. The result would be to undermine the goodwill that was 
supposedly the whole purpose of giving nuclear recognition in the first 
place.
    Rather than subtracting from the Indian side of the ledger in an 
effort to rebalance the India Deal, Congress should instead emphasize 
what the U.S. expects on its side of the ledger to give meaning to the 
new ``strategic partnership.'' The United States should expect India to 
join it in countering any destabilizing effects China's future rise 
might have on Asian security; assisting in any emergency in Pakistan 
such as radicalization of its government or loss of control of its 
nuclear weapons; reversing traditional Indian opposition to controls on 
transfer of nuclear technology and especially using its diplomatic 
clout against potential proliferators like Iran; growing its military-
to-military relationships, including arms cooperation, to match in time 
those the United States has with its closest allies; and giving 
preferential treatment to the U.S. defense and nuclear industries when 
the Indian government makes investments in these sectors.
    To see how the ledger can be rebalanced over time, one needs first 
to consider what India already got from the Deal on the nuclear front, 
and its repercussions for the nonproliferation regime; second, to 
prescribe the broader benefits the United States should aim to get from 
strategic partnership from India in coming decades; and third, to 
assess the chances that U.S. expectations will actually be met.
What Delhi Got
    India obtained defacto recognition of its nuclear weapons status: 
the United States will behave, and urge others to behave, as if India 
were a nuclear weapons state under the Nuclear Nonproliferation Treaty 
(NPT). The U.S. will not deny it most civil nuclear technology or 
commerce, nor require it to put all of its nuclear facilities under 
International Atomic Energy Agency (IAEA) safeguards--only those it 
declares to be civil. India can now import uranium, which has been a 
bottleneck in its nuclear program. It is worth noting that even if the 
Bush administration wished to make India a formal Nuclear Weapons State 
under the NPT (which it refused to do), it probably could not persuade 
all the other signatories of the NPT to agree to the change (such 
amendments require unanimity).
    Besides the new access to technology, nuclear recognition grants an 
enormous political benefit to India. With one stroke India joins the 
United States, Russia, China, Great Britain, and France as 
``legitimate'' wielders of the power and influence that nuclear weapons 
confer. The Deal allows India to transcend the nuclear box that has for 
so long defined and constrained its place in the international order, 
hopefully jettison at last its outdated Non-Aligned Movement stances 
and rhetoric, and occupy a more normal and modern place in the 
diplomatic world. Critics of the Deal contend that India's past and 
likely future behavior do not warrant this free pass. Proponents 
predict that with the nuclear issue (which the Bush administration 
describes as the ``basic irritant'' in Indo-U.S. relations) out of its 
psychological way, India will pivot from detractor of much of the 
international order, including especially the nonproliferation regime, 
to responsible stakeholder. Both sides agree that nuclear recognition 
is huge.
    The Deal has naturally been popular in India. Supporters of 
Congress Party Prime Minister Singh have emphasized Bush's nuclear 
recognition and downplayed any sense that India has taken on important 
obligations in return. Criticism from the opposition Bharatiya Janata 
Party (BJP) has been narrow and technical and probably reflects chagrin 
that a Congress Party government and not the BJP secured the Deal. The 
other source of criticism has been leftists in the Left Front parties. 
They are wedded to the old politics of the Non-Aligned Movement which 
was overtaken by the end of the Cold War, but they are unlikely to be 
able to block the Deal.
Measuring the Impact of Nuclear Recognition for India
    Previous U.S. administrations have adopted the stance that India's 
nuclear arsenal, first tested in 1974, is illegitimate and should be 
eliminated, or at least sharply constrained. They have done so for two 
reasons: First, India's nuclear arsenal is watched closely by arch-
rival and nuclear-armed Pakistan and by China, with which India has 
fought no fewer than three wars since its independence from Great 
Britain. Recognizing the Indian arsenal, the argument went, might spur 
its open growth and thus an arms race in South Asia. Second, Washington 
wanted to stick strictly to the principles underlying the NPT: that 
signatories would get the benefits of international standing and 
peaceful nuclear commerce, but those like India that stood outside the 
regime would not. Compromising these principles would, it was feared, 
give heart to nuclear aspirants that they could ``end run'' the NPT if 
only they waited thirty years like India; it would also dishearten the 
many countries that were not about to go nuclear but which loyally 
supported the NPT against new proliferators.
    But a stance is not a policy. As policy, elimination of India's 
arsenal became increasingly unrealistic as Pakistan went nuclear in the 
1980s, and then more so when India tested five bombs underground and 
openly declared itself a nuclear power in 1998. As the Bush 
administration conducted its nuclear negotiations with India in the 
fall of 2005 and spring of 2006, it ultimately abandoned efforts by 
nonproliferation specialists to attach further conditions to the Deal 
that would constrain India from increasing its nuclear arsenal further. 
The U.S. insisted that the Deal is a broad strategic agreement, not an 
arms control treaty. For example, some have argued that India should be 
required to stop making fissile material for bombs now like the other 
acknowledged nuclear powers have done rather than wait for the 
negotiation of an international Fissile Material Cutoff Treaty. Others 
contend that India should have to place more of its nuclear facilities 
under IAEA safeguards, to prevent diversion of fissile materials from 
its nuclear power program to its nuclear weapons program. Yet others 
would have India sign the Comprehensive Test Ban Treaty rather than 
abide, as it has since 1998, by a unilateral moratorium on further 
underground testing of its nuclear arsenal.
    The Indian government, with strong public support, has resisted all 
these efforts to constrain its future nuclear arsenal in technical 
ways. If the objective of U.S. proponents of these ways of rebalancing 
the India Deal is to prevent Indian arms racing with Pakistan and 
China, then that important goal would be better pursued in non-
technical ways. India has stated its intention to pursue a ``minimum 
deterrent'' rather than an all-out arms race. The Bush administration 
has encouraged this path, and can now make it an expectation of India 
as a responsible member of the nuclear club. But if the objective of 
seeking additional constraints on India's nuclear program is to ``take 
back'' some of the gain India got from nuclear recognition, then such a 
grudging move is likely to backfire. Indians will understandably view 
such a move as inconsistent with Bush's whole intent to use nuclear 
forgiveness as a way to open the way for strategic partnership.
    The second impact of nuclear recognition for India has to do with 
the integrity of the NPT regime and is more serious, though probably 
manageable. It is inconceivable that North Korea's Kim Jong Il pays 
much heed to the internal consistency of the NPT regime as he 
calculates how far he can get with his nuclear breakout. North Korea's 
governing ideology is less communism than a fanatical embrace of 
autarky and ``self-reliance,'' including open defiance of international 
norms like the nonproliferation regime. North Korea's tolerance for 
international ostracism is legendary. If Kim's nuclear program can be 
stopped at all at this point, it will be through a tough and focused 
diplomacy of sticks and carrots in which the NPT will play little part. 
Likewise, after 1995 Saddam Hussein simply ceased paying attention to 
the NPT.
    Iran's cat-and-mouse game with the EU-3, the U.S., and the IAEA 
over its recently-revealed nuclear program bespeaks at least a smidgen 
of sensitivity to international opinion as embodied in the NPT. Nuclear 
recognition for India gives Teheran a new talking point: If India gets 
a free pass, why not Iran which is also an important nation with an 
ancient culture? But like North Korea, Iran's nuclear program has 
deeper roots in its sense of security threat and Persian pride. Against 
these the NPT will not weigh in very heavily. Besides, for now Teheran 
denies it is seeking a nuclear arsenal at all but only nuclear power, 
so it will be hard-pressed to use India as a precedent for its current 
diplomatic position.
    The impact of the Bush-Singh deal on the ``rogues'' is therefore 
minimal. Its main impact will be felt among two other groups of 
countries. First, there are the ``in-betweens''--states that are not 
rogues but that flirt with nuclear status. In the recent past the in-
betweens have included South Africa, Argentina and Brazil, the post-
Soviet states of Ukraine, Kazakhstan, and Belarus, South Korea, Taiwan, 
and (only recently joining this category) Libya. These in-betweens 
turned away from nuclear weapons for many reasons specific to their own 
individual circumstances, but in each of these cases the lasting 
international ostracism threatening them if they stood outside the NPT 
regime was an influential factor for both governments and their people. 
Nuclear recognition for India suggests that forgiveness will eventually 
come to proliferators who wait, and tomorrow's in-betweens--Brazil 
comes to mind--might be tempted by the Bush-Singh precedent.
    The most nonproliferation damage, curiously, might be done among 
the stalwarts of the regime: governments that have no nuclear ambitions 
at all but that faithfully uphold the rules, and the nuclear powers 
that already enjoy a privileged place in it. These groups not only 
provide political support to discourage in-betweens and confront 
rogues, they provide vital and direct technical support by denying 
critical exports to those who infringe the NPT's rules. The Nuclear 
Suppliers Group (NSG), in particular, coordinates controls on exports 
by the nations with advanced nuclear power technology. The NSG was 
created through U.S. leadership, and it is the U.S. that has long stood 
against backsliding by member governments that come under pressure from 
their nuclear industries to sell technology abroad more liberally, 
including especially to India. Now all of a sudden the United States 
has decided to change policy, and others too might consider themselves 
free to pick and choose where they apply the nonproliferation rules--
the Chinese with Pakistan, the Russians with Iran, and some European 
vendors everywhere.
    Damage-limitation from the Bush-Singh deal must therefore center on 
the in-betweens and stalwarts. A plan for doing so was a logical part 
of the U.S. diplomatic initiative, but it is clear that the Bush 
administration did not have one until after the Deal was concluded, 
still less did it consult widely before Bush made his dramatic volte-
face in July 2005. But most of the nations whose adherence to the NPT 
regime is critical will either support the Deal or acquiesce in it. 
First, most accept the U.S. argument that India's nuclear 
nonproliferation behavior has been good--there have apparently been no 
Indian A.Q. Khans--and that India's possession of nuclear weapons is an 
established fact and cannot be reversed. Second, all can see that India 
is hardly a rogue state, but a stable democracy likely to play a large 
and constructive role in the world of the 21st century. Third, many 
will regard India's thirty years in the ``penalty box,'' which exacted 
a heavy price from Delhi in both prestige and technology, as sufficient 
to make the point that the regime's adherents are serious about 
enforcing its norms. These arguments have won over many in the 
international nonproliferation community, notably IAEA Director General 
and Nobel Laureate Dr. Mohamed ElBaradei And so while there is some 
grumbling within the NPT regime over the Deal, a revolt or collapse is 
not likely, and the damage to the regime can be limited.
    As critics have exaggerated the nonproliferation costs of the 
nuclear part of the India Deal, so also its proponents have exaggerated 
its benefits in terms of energy security and nuclear security. Bush 
administration spokesmen have defended the Deal's nuclear power 
provisions as critical to stopping India's rise from posing an oil and 
environmental crisis. But this claim does not survive close scrutiny. 
Energy security is terribly important to both India and the United 
States. All want India's huge population to satisfy its energy needs, 
which will grow faster than its GDP, increasing as much as fourfold 
within 25 years, without contributing further to dependence on Middle 
East oil, pollution, and global warming. But the arithmetic does not 
support the case that nuclear power will add up to make the critical 
difference for India, though it can and should play a role. For the 
foreseeable future, electricity generation in India will be dominated 
by coal burning whereas nuclear plants (which today produce only 3% of 
India's electricity) will remain a single-digit contributor even under 
the most extravagant projections of U.S.-assisted nuclear expansion in 
India. Indian coal is plentiful but of poor quality and highly 
polluting. Burning coal more cheaply and more cleanly will do more than 
any conceivable expansion of nuclear power to aid India's economy and 
the environment. India's share of world oil consumption will grow from 
3% to 4% over the next twenty years. But nuclear power does nothing to 
address the principal Indian oil consuming sector--cars and trucks--
since these don't run off the electrical grid and won't for a long 
time. Finally, the type of assistance the United States is best 
positioned to provide to India's nuclear generation capacity (light 
water reactors operating on low-enriched uranium fuel) is at odds with 
the Indian establishment's uneconomical vision of a civil nuclear power 
program built primarily around breeder reactors.
    The administration also claims the Deal will require India to 
improve its laws and procedures for controlling exports or diversions 
of sensitive nuclear technology--preventing an Indian A.Q. Khan. But at 
the same time, the administration acknowledges India's apparently 
excellent record of controlling nuclear exports (though not always 
ballistic missile exports). India is already bound by the U.S.-
sponsored U.N. Security Council Resolution 1540 which requires such 
good conduct, so on paper at least Delhi has sold the same horse a 
second time in the Deal. In any event, the United States is justifying 
the Deal's nuclear recognition to other nations around the world on the 
grounds that India's nuclear proliferation behavior is already 
exemplary, It will be difficult for the U.S. to argue this point both 
ways at the same time.
What Washington Should Get
    What is it then that the United States might expect from the 
``strategic partnership'' in return for the nuclear recognition it 
conferred upon India?
    First and foremost, the United States should expect India to serve 
as a potential future Asian counterweight to China. Though no one wants 
to see China and the United States fall into strategic competition, 
neither can anyone rule this out. The evolution of U.S.-China relations 
will depend on the attitudes of China's younger generation and new 
leaders, on Chinese and U.S. policies, and on unpredictable events like 
a crisis over Taiwan. It is reasonable for the United States to hedge 
against a downturn in relations with China by improving its relations 
with India, and for India to do the same. But for now both are intent 
on improving their relations and trade with China, not antagonizing 
China. Neither government will wish to talk publicly, let alone take 
actions now, pursuant to this shared--but hypothetical and future--
common interest.
    Second, the U.S. will want Indian assistance in a range of possible 
contingencies involving neighboring Pakistan--another common interest 
that is awkward for either party to the Deal to acknowledge. Pakistan, 
alongside Russia, belongs at the very center of urgent concern about 
nuclear terrorism. Terrorists cannot make nuclear bombs unless they 
obtain enriched uranium or plutonium from governments that have made 
these materials. The exposure of the A.Q. Khan network in Pakistan 
makes clear that Pakistan has to be regarded as a potential source of 
such materials--whether by theft, sale, diversion by internal radical 
elements with access to bombs or materials, change of government from 
Mushanaf to a radical regime, or some sort of internal chaos. Which 
version of the A.Q. Khan story is more alarming--that the government 
and military of Pakistan was unaware of what he was doing, or that they 
were aware and permitted it? Either way it illustrates a serious 
danger. Were there to be a threat or incident of nuclear terrorism 
originating in Pakistan, the United States would want to act in concert 
with as many regional players as possible, including India.
    The Pakistan contingency is even more difficult than the China 
counterweight contingency for the newly-minted strategic partners in 
Washington and Delhi to acknowledge. India seems intent on improving 
its relations with Pakistan--despite last year's bombings in Delhi and 
their impact on Indian public opinion--and a rapprochement between 
these long-time antagonists is in the U.S. interest. The United States, 
for its part, has important interests at stake with the Musharraf 
government--among them supporting the search for Osama bin Laden and 
other terrorists on Pakistani territory, arresting the growth of 
radicalism in Pakistan's population, and stabilizing Afghanistan--and 
can ill afford the perception of a ``tilt towards India.'' For now, 
therefore, the Pakistan contingency, like the China counterweight, 
remains a hypothetical and future benefit of the India Deal.
    Third, and most urgently, India should be expected to weigh in 
against Iran's nuclear ambitions and to compromise to a considerable 
extent its friendly relations with Iran in the interests of 
nonproliferation. Whether Delhi does this will be the clearest test of 
whether nuclear recognition ``brings India into the nuclear 
mainstream,'' as the Bush administration predicts, or whether India 
persists in its pre-Deal (actually, Cold war) positions of rhetorical 
support for the spread of nuclear fuel-cycle activities (uranium 
enrichment and plutonium reprocessing). India's September 24, 2005 and 
February 4, 2006 votes with the United States and its European partners 
in the IAEA Board of Governors, finding Iran in noncompliance with its 
NPT obligations and referring the matter to the United National 
Security Council were a welcome suggestion that India will support the 
international campaign to curb Iran's nuclear ambitions. But India's 
willingness truly to join the nuclear club, reversing old non-aligned 
habits and putting its diplomatic shoulder to the wheel in the case of 
Iran and other urgent counter-proliferation efforts will be an early 
and major test of the value of strategic partnership and its new 
status.
    Fourth, the United States should expect a continued intensification 
of Indo-U.S. military-to-military contacts, ultimately envisioning 
joint action in operations outside of a United Nations context. India 
has historically refused to join the United States military in 
operations that were not mandated and commanded by the United Nations. 
In the future, when the United States needs partners in disaster 
relief, humanitarian intervention, peacekeeping missions, or stability 
operations, the United States can reasonably expect India to cooperate. 
Judging from the evolution of U.S. security partnerships in Asia and 
Europe (especially NATO's expanded membership and Partnership for 
Peace), anticipation of joint action can lead first to joint military 
planning, then progressively to joint exercises, intelligence sharing 
and forging of a common threat assessment, and finally to joint 
capabilities. This is the path foreseen for a deepening U.S.-India 
strategic partnership in the defense field. Additionally, there could 
be occasions when access for and, if needed, basing of U.S. military 
forces on Indian territory would be desirable. At first this might be 
limited to port access for U.S. naval vessels transiting the Indian 
Ocean and overflight rights for U.S. military aircraft, but in time it 
could lead to such steps as use of Indian training facilities for U.S. 
forces deploying to locations with similar climate (the way German 
training areas were used for forces deploying to the Balkans). 
Ultimately, India could provide U.S. forces with ``over-the-horizon'' 
basing for Middle East contingencies of the sort preferred by Saudi 
Arabia and other Gulf states.
    Fifth, the United States will expect preferential treatment for 
U.S. industry in India's civil nuclear expansion and modernization of 
its military. The authors of the India Deal might have anticipated 
preferential treatment for U.S. industry in construction of Indian 
nuclear reactors and other civil power infrastructure made possible by 
the Deal. But there are two barriers to realization of this U.S. 
benefit. First, the United States must secure preferential access for 
its nuclear industry at the expense of Russian and European suppliers 
who are also seeking access to the Indian market. Second, the United 
States will also need to persuade India to focus its nuclear power 
expansion on light water reactors, not the exotic and uneconomical 
technologies (e.g., fast breeders) that the Indian nuclear scientific 
community favors. This benefit should therefore not be exaggerated. 
India is expected to increase the scale and sophistication of its 
military, in part by purchasing weapons systems abroad. In view of its 
concessions in the India Deal, the United States can reasonably expect 
preferential treatment for U.S. vendors relative to Russian or European 
vendors. Early discussions have included the F-16 and F-18 tactical 
aircraft and the P-3C Orion maritime surveillance aircraft.
Will the United States Get the Benefits of the India Deal?
    The list above is a very substantial--even breathtaking--set of 
potential benefits to the United States of a strategic partnership with 
India. How realistic is it?
    Some of the items on this list reflect common national interests of 
India and the United States. The United States might therefore have had 
many of these benefits without having to pay the nonproliferation costs 
associated with nuclear recognition for India. Most of the items on the 
list are also hypothetical and lie in a future that neither side can 
predict--this is certainly the case with regard to the China 
counterweight and Pakistan contingency items. Other items on the list, 
like Iran's nuclear program, will unfold sooner. The United States can 
certainly hope that India will behave as a true ``strategic partner'' 
in the future across all the items on this list. But there is a risk 
that when the United States comes to ask India to do something it is 
reluctant to do, that it comes to regret having played its big 
diplomatic card--nuclear recognition--so early in the process.
    India, as befits a great nation on its way to global prominence, 
will have its own opinions about this list. Some American proponents of 
the India Deal have compared it to Nixon's opening to China--a bold 
move based on a firm foundation of mutual interest, but more a leap of 
trust than a shrewd bargain. Mao and Nixon, however, had a clear and 
present common enemy--the Soviet Union--not a hypothetical set of 
possible future opponents. But the real difference between the Nixon/
Kissinger deal and the India Deal is that India, unlike Mao's China, is 
a democracy. No government in Delhi can turn decades of Indian policy 
on a dime or commit it to a broad set of actions in support of U.S. 
interests--only a profound and probably slow change in the views of 
India's elites can do this. India's bureaucracies and diplomats are 
fabled for their stubborn adherence to independent positions regarding 
the world order, economic development, and nuclear security. Proponents 
of the India Deal suggest that these positions will yield to the grand 
gesture of nuclear recognition by the United States. This expectation 
is naive. Americans view the change of long-standing and principled 
nonproliferation policy to accommodate India as a concession. Indians 
view it as acknowledgement of something to which they have long been 
entitled. This is not a durable basis for a diplomatic transaction.
    It is therefore premature to judge whether the expectations of this 
strategic partnership as apparently foreseen on the U.S. side are 
shared by India and will, in fact, materialize. The Deal itself was 
premature. The risk with a hastily prepared diplomatic initiative is 
that disenchantment will set in on both sides. At this point, the 
United States, including the Congress, can only do its best to ensure 
that its benefits are fully realized--by both parties.

    The Chairman. Well, thank you very, very much, Secretary 
Carter.
    Let me just mention, as a personal reference, Ash Carter 
provided a--it was longer than a memo--really, a tract that was 
the basis for the Senate meeting of, in a bipartisan way, 
Republicans and Democrats, that brought about the Nunn-Lugar 
Cooperative Threat Reduction Act. And after not much occurred 
during the previous Bush administration, that of George Herbert 
Walker Bush, we took an airplane trip to Russia and Ukraine 
early in 1992, and both Ash Carter and Bill Perry were onboard, 
in their private capacities. They were later to come into the 
Government in the service of President Clinton's administration 
in distinguished ways. But I simply pay tribute to them, to 
begin with, in the spirit of strong bipartisanship, but 
especially for their interest in nonproliferation that impelled 
that kind of leadership then, as well as the administration's. 
That is why you're valued as witnesses today. We listen to you 
with a great deal of respect.
    I'd like to now recognize Secretary Perry for his 
testimony.

   STATEMENT OF HON. WILLIAM J. PERRY, SENIOR FELLOW, HOOVER 
         INSTITUTION, STANFORD UNIVERSITY, STANFORD, CA

    Dr. Perry. Thank you, Mr. Chairman. I will be brief, and I 
will organize my views in three related points.
    The first point is, I enthusiastically support the 
development of a strategic partnership between the United 
States and India, of which this agreement could be an important 
step. The benefits of a strategic partnership were convincingly 
outlined in the earlier testimony of Secretary Rice to this 
committee. I associate myself with her views on the importance 
of a strategic partnership. In particular, I expect that this 
could include a robust military-to-military partnership, 
including, for example, joint exercises in humanitarian relief 
operations, in responding to emergencies at sea, and in 
peacekeeping operations. Those exercises could be modeled after 
the comparable exercises conducted in Europe by the Partnership 
for Peace.
    My second point, I understand the need of India to 
aggressively develop nuclear power for their growing industrial 
base, and I believe that the United States should support India 
in that development.
    The importance of nuclear power to India and to the global 
environment were convincingly outlined by Dr. David Victor in 
his op-ed piece in the International Herald Tribune on 17 
March. And I commend this to the committee. I associate myself 
with Dr. Victor's views on this subject.
    My third point, I am disappointed that the United States 
did not seize the opportunity presented in the formulation of 
this agreement to undertake a joint program with India directed 
at preventing the spread of nuclear weapons. Stopping nuclear 
proliferation is an important American objective. It is an 
important international objective. And it should be an 
important Indian objective. I believe that it is not too late 
to join forces with India to further this critical objective.
    I'd like to highlight four actions that India could take 
that would make a significant difference in preventing the 
spread of nuclear weapons.
    First, India could join other nuclear powers in 
implementing strong controls on the transfer of nuclear 
technology and materials.
    Second, India could take a leadership position in promoting 
an international cutoff in the production of fissile material.
    Third, India could cooperate with the United States and the 
EU-3 in pressuring Iran to stop the programs that are 
facilitating an Iranian nuclear bomb.
    And, fourth, India could explicitly reaffirm its intention 
of limiting its nuclear arsenal to minimal deterrence levels.
    Secretary Rice, in her testimony, has suggested that India 
is prepared to take many of these actions, but they are not an 
explicit part of the agreement. I do not recommend that the 
Senate try to modify the agreement to include them. Instead, I 
recommend that the Senate task the administration to vigorously 
pursue continuing diplomacy to facilitate these actions, and 
that should be as a follow-on to the agreement. Indeed, I 
believe that these actions are strongly in the interest of 
India, and I believe that the Indian Government understands 
that.
    What is the motivation--what is the incentive that the 
administration would have to actually carry out this diplomacy? 
First of all, they are in India's interest. And, second, only--
only if India moves aggressively to carry out these actions 
will they be providing the foundation on which the strategic 
partnership desired by both countries can, in fact, be 
achieved.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Perry follows:]

  Prepared Statement of Hon. William J. Perry, Senior Fellow, Hoover 
             Institution, Stanford University, Stanford, CA

    My views on the recently concluded Civilian Nuclear Cooperation 
Agreement between India and the United States can be summarized in 
three points.
    First, I enthusiastically support the development of a strategic 
partnership between the United States and India, of which this 
agreement could be an important step. The benefits of a strategic 
partnership were convincingly outlined in the earlier testimony of 
Secretary Rice to this committee. I associate myself with her views on 
the importance of a strategic partnership. In particular, I expect that 
this could include a robust military-to-military partnership, 
including, for example, joint exercises in humanitarian relief 
operations, in responding to emergencies at sea, and in peacekeeping 
operations. Those exercises could be modeled after the comparable 
exercises conducted in Europe by the Partnership for Peace.
    Second, I understand the need of India to aggressively develop 
nuclear power for its growing industrial base, and I believe that the 
United States should support India in that development. The importance 
of nuclear power to India and to the global environment were 
convincingly outlined by Dr. David Victor in his op-ed piece in the 
International Herald Tribune on 17 March. And I commend this to the 
committee. I associate myself with Dr. Victor's views on this subject.
    Third, I am disappointed that the United States did not seize the 
opportunity presented in the formulation of this agreement to undertake 
a joint program with India directed at preventing the spread of nuclear 
weapons. Stopping nuclear proliferation is an important American 
objective. It is an important international objective. And it should be 
an important Indian objective. I believe that it is not too late to 
join forces with India to further this critical objective.
    I'd like to highlight four actions that India could take that would 
make a significant difference in preventing the spread of nuclear 
weapons:
          First, India could join other nuclear powers in implementing 
        strong controls on the transfer of nuclear technology and 
        materials.
          Second, India could take a leadership position in promoting 
        an international cutoff in the production of fissile material.
          Third, India could cooperate with the United States and the 
        EU-3 in pressuring Iran to stop the programs that are 
        facilitating an Iranian nuclear bomb.
          And, fourth, India could explicitly reaffirm its intention of 
        limiting its nuclear arsenal to minimal deterrence levels.
    Secretary Rice, in her testimony, has suggested that India is 
prepared to take many of these actions, but they are not an explicit 
part of the agreement. I do not recommend that the Senate try to modify 
the agreement to include them. Instead, I recommend that the Senate 
task the administration to vigorously pursue continuing diplomacy to 
facilitate these actions, and that should be as a follow-on to the 
agreement. Indeed, I believe that these actions are strongly in the 
interest of India, and I believe that the Indian Government understands 
that.
    What is the motivation--what is the incentive that the 
administration would have to actually carry out this diplomacy? First 
of all, they are in India's interest. And, second, only if India moves 
aggressively to carry out these actions will they be providing the 
foundation on which the strategic partnership desired by both countries 
can, in fact, be achieved.

    The Chairman. Thank you very much, Secretary Perry.
    I want to recognize, now, Dr. Gallucci, who has had a long 
career in public service, and particularly in dealing with the 
problems in North Korea.
    We really look forward to your testimony. Please proceed.

  STATEMENT OF HON. ROBERT L. GALLUCCI, DEAN, EDMUND A. WALSH 
 SCHOOL OF FOREIGN SERVICE, GEORGETOWN UNIVERSITY, WASHINGTON, 
                               DC

    Ambassador Gallucci. Thank you, Mr. Chairman, and thank you 
for this opportunity to testify on the national security 
implications of the proposed United States-India agreement on 
civil nuclear cooperation.
    Mr. Chairman, in this brief statement, I wish to make only 
three points. The first is that those who advocate making this 
special arrangement to permit nuclear cooperation with India 
ought to be clear and honest about why they are doing so. The 
second is that the reasons for making the particular deal they 
proposed, while important, do not justify the cost to the 
national security of doing so. And, third, that there is an 
arrangement which would, in fact, strike the right balance 
between competing national security interests, an arrangement 
that may be negotiable at some future time, if not now.
    The United States has good reasons for improving its 
relations with India, both political and economic. If this is 
obvious, so, also, is the chronic irritant that our 
nonproliferation policy has been to United States-India 
relations over the last 30 years.
    We should acknowledge the importance that India attaches to 
American willingness to change that policy so that the United 
States can begin to sell its nuclear equipment, material, and 
technology. We should also admit that the proposed deal would 
grant what New Delhi values most, namely, our acceptance of 
India as a nuclear weapons state. And, while we're at it, we 
should admit that, although the deal would be critically 
important to our goal of improving relations with India, it 
will really do nothing to help us deal with the risks posed by 
the proliferation of nuclear weapons. Assertions to the 
contrary, I think, are less than forthright.
    There is no reason why we should attach any positive value 
to India's willingness to submit a few additional nuclear 
facilities of its choosing to international safeguards, so long 
as other fissile material producing facilities are free from 
safeguards. This move has been called symbolic by critics, but 
it is not at all clear what useful purpose it symbolizes. The 
other elements of the deal that are supposed to contribute to 
its nonproliferation value were in place before the deal was 
struck.
    The first point, then, is that the administration proposes 
this deal to address a genuine regional security objective, and 
not because it helps, in any way, our global security concern 
over nuclear proliferation.
    The second point is that the proposed arrangement will be 
too costly to the national security to be justified by the gain 
in relations with India.
    Mr. Chairman, since the dawn of the nuclear age and the 
arrival of intercontinental ballistic missiles, our Nation has 
been defenseless against devastating attack, leaving us to rely 
on deterrents--the promise of retaliation--to deal with 
nuclear-armed enemies. From the beginning, we recognized that 
this left us vulnerable to anyone who could not be deterred; 
and so, in some basic way, our security depended on limiting 
the number of countries who ultimately acquired nuclear 
weapons. Most analysts believe that 50 years of 
nonproliferation policy has something to do with explaining why 
the spread of nuclear technology has not led to the 
proliferation of nuclear weapons, why we live in a world of 
eight or nine nuclear weapons states, rather than 80 or 90.
    A key part of that policy has been our support for an 
international norm captured in the very nearly universally 
adhered to Nuclear Non-Proliferation Treaty. The norm is 
simple. In the interest of international security, no more 
states should acquire nuclear weapons. There are many 
provisions in the treaty, and details to be understood, to 
fully appreciate the norm, but that is its essence.
    Certainly, the fact that we have eight or nine states with 
nuclear weapons, rather than only the original five, means that 
the norm has not held perfectly well, but it has had 
substantial force in the face of widespread acquisition of 
critical nuclear technologies, and that has been vital to 
America's security. Simply put, the administration now proposes 
to destroy that norm.
    Some claim the deal would only recognize the reality of 
India's nuclear weapons program. But that's not accurate. 
Recognizing that India and a few additional countries have 
acquired nuclear weapons over the last three decades is not the 
issue. The damage will be done to the nonproliferation norm by 
legitimizing India's condition, by exempting it from a policy 
that has held for decades. And we would do this, we assert, I 
think less than honestly because of India's exceptionally good 
behavior. In truth, we would reward India with nuclear 
cooperation, because we now place such a high value on improved 
relations with New Delhi, not because of its uniquely good 
behavior.
    Critics ask: If we do this deal, how will we explain, 
defend, and promote our policy of stopping Iran's proposed 
uranium enrichment program? Iran is, after all, a party to the 
Nuclear Non-Proliferation Treaty, and has, as far as we know, 
no fissile material outside of international safeguards and has 
never detonated a nuclear explosive device. A good question, 
but not the best one, because India has arguably been a more 
responsible member of the international community than Iran. 
Rather, if we do this deal, ask how we will avoid offering a 
similar one to Brazil or Argentina, if they decide on a nuclear 
weapons acquisition, or our treaty ally, South Korea. Dozens of 
countries around the world have exhibited good behavior in 
nuclear matters and have the capability to produce nuclear 
weapons, but chose not to, at least in part because of the 
international norm against nuclear weapons acquisition, 
reinforced by a policy we would now propose to abandon.
    Will we legitimize only India because it never joined the 
NPT, and thus did not have to withdraw from it to pursue 
nuclear weapons? No, if India was truly unique, there might not 
be much risk to that nonproliferation norm we so depend upon. 
But it is not unique. The deal would set a dangerous precedent. 
If we do this, we will put at risk a world of very few nuclear 
weapons states and open the door to the true proliferation of 
nuclear weapons in the years ahead.
    Finally, if there are two national security objectives in 
conflict here--one regional and one global--the question is: Is 
it possible to reconcile them? The answer, I think, is 
probably, ``Yes''; but not now, not in the current context. 
Clearly, and, I think, regrettably, if the administration's 
proposal does not succeed in much the same form in which it has 
been put forth, United States-India relations will deteriorate, 
for a time. But acknowledging that does not mean that we should 
go ahead with a deal that would do irreparable damage to our 
long-term national security interests. Instead, we should put 
forth a proposal that more clearly balances regional and global 
security interests, recognizing that it will be some time, at 
best, before it will appeal to New Delhi.
    The proposal would permit nuclear cooperation with India, 
if India accepts reasonably verifiable ban on the production of 
any more fissile material for nuclear weapons purposes. The 
approach would permit India reprocessing and enrichment 
facilities, but effectively require international safeguards on 
all its nuclear facilities and any nuclear material produced in 
the future.
    Its appeal, in regional terms, is that it would allow India 
to pursue nuclear energy without restrictions of any kind, more 
than we are willing to do, by the way, for Iran, at the moment.
    From the global security perspective, we will have 
succeeded in capping a nuclear weapons program, a substantive 
achievement which arguably offsets a breach of the longstanding 
policy against nuclear cooperation with a state such as India 
that does not accept full-scope safeguards. The deal would have 
to have other provisions, such as rigorous nuclear export 
control policies, a ban on export of enrichment and 
reprocessing technology, and a permanent prohibition on nuclear 
explosive testing. But that would be its essence.
    The deal described above would require India to choose 
between the opportunity to expand its nuclear energy program, 
on the one hand, and the expansion of its nuclear weapons 
arsenal, on the other. The administration proposes to allow 
India to do both. And that would be a mistake. Our security 
depends on maintaining that norm against the proliferation of 
nuclear weapons.
    Thank you, Mr. Chairman.
    [The prepared statement of Ambassador Gallucci follows:]

 Prepared Statement of Hon. Robert L. Gallucci, Dean, Edmund A. Walsh 
    School of Foreign Service, Georgetown University, Washington, DC

    In this brief statement, I wish to make only three points. The 
first is that those who advocate making this special arrangements to 
permit nuclear cooperation with India ought to be clear--and honest--
about why they are doing so. The second is that the reasons for making 
the particular deal they propose, while important, do not justify the 
cost to the national security of doing so. And third, that there is an 
arrangement which would, in fact, strike the right balance between 
competing national security interests, an arrangement that may be 
negotiable at some future time, if not now.
    The United States has good reasons for improving its relations with 
India, both political and economic. Part of the calculation must turn 
on our uncertainties about China, about whether Beijing will turn out 
to be more of a strategic competitor than partner in the decades ahead. 
If internal developments in China do not proceed as we hope, and if 
Chinese foreign policy turns out to be more hegemonic than we expect, a 
solid political relationship with India could be important to our 
security. Moreover, independent of such considerations, India's 
enormous and growing economic and political importance make the 
improvement of relations with New Delhi a prudent objective for the 
United States.
    If this is obvious, so also is the chronic irritant that our 
nonproliferation policy has been to U.S.-India relations over the last 
30 years. We should acknowledge the importance that India attaches to 
American willingness to change that policy so that the United States 
can begin to sell it nuclear equipment, material and technology. We 
should also admit that the proposed deal would grant what New Delhi 
values most, namely our acceptance of India as a nuclear weapons state. 
And while we are at it, we should admit that although the deal would be 
critically important to our goal of improving relations with India, it 
will really do nothing to help us deal with the risks posed by the 
proliferation of nuclear weapons. Assertions to the contrary are less 
than honest.
    There is no reason why we should attach any positive value to 
India's willingness to submit a few additional nuclear facilities of 
its choosing to international safeguards, so long as other fissile 
material producing facilities are free from safeguards. This move has 
been called ``symbolic'' by critics, but it is not at all clear what 
useful purpose it symbolizes. The other elements of the deal that are 
supposed to contribute to its nonproliferation value were in place 
before the deal was struck. The first point then, is that the 
administration proposes this deal to address a genuine regional 
security objective and not because it helps in any way our global 
security concern over nuclear proliferation.
    The second point is that the proposed arrangement will be too 
costly to the national security to be justified by the gain in 
relations with India.
    Since the dawn of the nuclear age and the arrival of 
intercontinental ballistic missiles, our nation has been defenseless 
against devastating attack--leaving us to rely on deterrence, the 
promise of retaliation, to deal with nuclear armed enemies. From the 
beginning, we recognized that this left us vulnerable to anyone who 
could not be deterred, and so, in some basic way, our security depended 
on limiting the number of countries who ultimately acquired nuclear 
weapons. Most analysts believe that 50 years of nonproliferation policy 
has something to do with explaining why the spread of nuclear 
technology has not led to the proliferation of nuclear weapons, why we 
live in a world of 8 or 9 nuclear weapons states, rather then 80 or 90. 
A key part of that policy has been our support for an international 
norm captured in the very nearly universally adhered to Nuclear Non-
Proliferation Treaty (NPT). The norm is simple: In the interest of 
international security, no more states should acquire nuclear weapons. 
There are many provisions in the treaty and details to be understood to 
fully appreciate the norm, but that is its essence. Certainly the fact 
that we have eight or nine states with nuclear weapons rather than only 
the original five, means that the norm has not held perfectly well. But 
it has had substantial force in the face of widespread acquisition of 
critical nuclear technologies, and that has been of vital importance to 
America's security. Simply put, the administration now proposes to 
destroy that norm.
    Some claim the deal would only recognize the reality of India's 
nuclear weapons program. But that is not accurate. Recognizing that 
India and a few additional countries have acquired nuclear weapons over 
the last three decades is not the issue. The damage will be done to the 
nonproliferation norm by legitimatizing India's condition, by exempting 
it from a policy that has held for decades. And we would do this, we 
assert less than honestly, because of its exceptionally good behavior. 
In truth, we would reward India with nuclear cooperation because we now 
place such a high value on improved relations with New Delhi, not 
because of its uniquely good behavior.
    Critics ask, if we do this deal, how will we explain, defend, and 
promote our policy of stopping Iran's proposed uranium enrichment 
program? Iran is, after all, a party to the Nuclear Non-Proliferation 
Treaty, and as far as we know, has no fissile material outside of 
international safeguards and has never detonated a nuclear explosive 
device. A good question, but not the best one because India has 
arguably been a more responsible member of the international community 
than Iran. Rather, if we do this deal, ask how we will avoid offering a 
similar one to Brazil or Argentina if they decide on nuclear weapons 
acquisition, or our treaty ally, South Korea. Dozens of countries 
around the world have exhibited good behavior in nuclear matters, and 
have the capability to produce nuclear weapons but choose not to, at 
least in part, because of the international norm against nuclear 
weapons acquisition reinforced by a policy we would now propose to 
abandon. Will we legitimatize only India because it never joined the 
NPT and thus did not have to withdraw from it to pursue nuclear 
weapons? No, if India was truly unique, there might not be much risk to 
that nonproliferation norm we so depend upon, but it is not unique: The 
deal would set a dangerous precedent. If we do this, we will put at 
risk a world of very few nuclear weapons states, and open the door to 
the true proliferation of nuclear weapons in the years ahead.
    Finally, if there are two national security objectives in conflict 
here, one regional and the other global, is it possible to reconcile 
them? The answer is probably yes, but not now, not in the current 
context. Clearly and regrettably, if the administration's proposal does 
not succeed in much the same form in which it has been put forth, U.S.-
India relations will deteriorate for a time. But acknowledging that 
does not mean that we should go ahead with a deal that would do 
irreparable damage to our long-term national security interests. 
Instead, we should put forth a proposal that more nearly balances 
regional and global security interests, recognizing that it will be 
some time, at best, before it will appeal to New Delhi.
    In looking for that balance, we should understand that there is 
something of a continuum to be considered in terms of nonproliferation 
provisions. At one end, for purists, is nothing less than Indian 
adherence to the NPT. This is nearly impossible to foresee. Next, for 
nonproliferation realists, is an Indian commitment to end fissile 
material production for any purpose and forego those facilities, 
enrichment and reprocessing, that yield it. This would leave India with 
nuclear weapons, but no means to produce the material to make more. 
Significantly, it would also deny India the option of exploring breeder 
reactor technology, something the Indian nuclear energy establishment 
very much wants to do.
    Finally, there is a more practical posture, which is to permit 
nuclear cooperation with India if it accepts a reasonably verifiable 
ban on the production of any more fissile material for nuclear weapons 
purposes. This approach would permit India reprocessing and enrichment 
facilities, but effectively require international safeguards on all its 
nuclear facilities and any nuclear material produced in the future. Its 
appeal in regional terms is that it would allow India to pursue nuclear 
energy without restrictions of any kind--more than we are willing to do 
for Iran at the moment. From the global security perspective, we will 
have succeeded in capping a nuclear weapons program, a substantive 
achievement which arguably offsets a breach of the longstanding policy 
against nuclear cooperation with a state such as India that does not 
accept full-scope safeguards. The deal would have to have other 
provisions, such as rigorous nuclear export control policies, a ban on 
export of enrichment or reprocessing technology, and a permanent 
prohibition on nuclear explosive testing, but this is its essence.
    The deal described above would require India to choose between the 
opportunity to expand its nuclear energy program on the one hand, and 
the expansion of its nuclear weapons arsenal on the other. The 
administration proposes to allow India to do both, and that would be a 
mistake. Our security depends on maintaining the norm against nuclear 
weapons proliferation.

    The Chairman. Well, thank you very much, Dr. Gallucci.
    We now look forward to the testimony of Dr. Ashley Tellis.
    Would you please proceed?

 STATEMENT OF DR. ASHLEY J. TELLIS, SENIOR ASSOCIATE, CARNEGIE 
       ENDOWMENT FOR INTERNATIONAL PEACE, WASHINGTON, DC

    Dr. Tellis. Thank you, Mr. Chairman.
    Thank you for inviting me to testify this morning on the 
issue of atomic energy cooperation between the United States 
and India. This is a complex subject, and I have written 
extensively about it.
    What I want to do this morning is really focus on just one 
aspect of the agreement, which is the strategic logic that 
underlies the President's initiative and its importance for 
transforming the relationship between our two countries.
    I think the United States and India today are confronted by 
a tremendous opportunity to craft a new global partnership, an 
opportunity that eluded us throughout the cold war and eluded 
us, in large measure, because both our countries were unable to 
reconcile the problems caused by India's anomalous status in 
the global nonproliferation order.
    I think it's really to the Clinton administration's credit 
that it tried to improve United States-India relations in order 
to serve American national interests by first trying to 
quarantine the nuclear issue while improving relations in all 
other areas to the degree possible. When this approach did not 
bear much fruit, the administration then shifted to a strategy 
of trying to cap, roll back, and eventually eliminate India's 
nuclear program. Both these approaches, unfortunately, were 
less than successful.
    I remind the committee of this history only because it 
underlines two important realities that we must keep in mind 
when we think about how we can engage India in a new 
relationship.
    The first is that the transformation of the bilateral 
relationship will not occur unless we find a solution to 
resolving India's anomalous status in the global 
nonproliferation order, to make it part of the regime that 
serves our common interests.
    The second is that we cannot transform the bilateral 
relationship so long as, on one hand, we seek to make India a 
partner of the United States, while, on the other hand, it 
continues to remain a target of our nonproliferation efforts.
    It is these two elements that essentially have caused the 
tension in our inability to transform the relationship in the 
last two decades. And, for that reason, I believe Secretary 
Rice, in her recent testimony to this committee, emphasized the 
fact that civilian nuclear cooperation today now becomes the 
key to unlock the progress in our expanding relationship.
    Prime Minister Manmohan Singh told Under Secretary Burns, 
in Delhi, during our negotiations on the separation plan, that 
the most important reason for this agreement, in his mind, was 
that it would signify a historic reconciliation between the 
United States and India, and a new concord after many decades 
of anxiety, distrust, and suspicion in our bilateral relations. 
I think these are noble thoughts, but I want to emphasize 
something else, that the reason why I believe Congress ought to 
support the agreement, ultimately, is because it advances, not 
simply a reconciliation with India, but three very important 
American national security interests.
    The first of these is that it is in America's interest to 
have a strong democratic India that serves as a full partner in 
an Asia that threatens to become more and more important to the 
United States over time. Civil nuclear cooperation is just one 
element in our effort to increase the growth of Indian power, 
to strengthen the economic foundations of India's democracy, 
and help it play the partnership role that we want in 
establishing a stable Asian order. This is part, I believe, of 
a larger U.S. effort to deepen our relations with all Asian 
countries, but particularly the democratic states in that 
continent.
    The second reason for why I hope Congress will endorse the 
President's initiative is because it is an integral part of 
constructing an effective nonproliferation regime.
    The civil nuclear agreement here is important for a very 
critical reason, because it embodies a bargain which allows 
India to become part of the nonproliferation order through 
formal commitments to the international system. I agree with 
all my preceding panelists this morning when they urge us to 
consider the fact that India's record of nonproliferation has 
been good. That is true. But it is a good record that has been 
undertaken purely as a result of unilateral actions.
    What this agreement seeks to do is transform those 
unilateral commitments into binding international obligations; 
in effect, shutting the door for any future Indian Government 
to change its mind were circumstances to provoke such choices.
    The third, and final, I think, why we ought to support this 
agreement with India is because it is part of a process to 
create a global order that protects liberal societies and 
advances freedom in so many ways: Promoting democracy, 
defeating terrorism, collaborating to protect energy routes, 
expanding trade and the international economic system. All 
these are objectives where Indian partnership with the United 
States is critical to successful outcomes.
    I think the President's proposal for full nuclear 
cooperation is driven ultimately by a conviction that it is 
time to remove the last remaining impediment to closer 
relations between our two countries. The question is often 
asked whether, in the absence of such an agreement, the United 
States-Indian partnership, on all other issues, would decay. 
The unfortunate answer to that question is, ``Yes.'' This is 
not to say that United States-Indian collaboration will 
suddenly evaporate if civil nuclear cooperation cannot be 
consummated, but it does emphasize that such cooperation would 
turn out to be hesitant, troubled, episodic, and unable to 
realize its full potential, in much the same way as we have 
seen our relationship for the last 30 years.
    I think what this initiative in final represents, is really 
a bold and decisive step. It is possible to conceive of many 
other agreements with India which might have turned out to be 
better than the one we have. But, in my judgment, the agreement 
that we finally reached is really the best possible deal that 
protects both core American and Indian vital national 
interests. No other deal was possible.
    And, therefore, comparing this deal, which is the best deal 
we can enjoy, in reality with other agreements that might have 
been possible, in principle I'm afraid would not take us to 
where we want to go, which is a closer relationship with a 
democratic power that has a trustworthy record and will become 
an important partner for the United States in the coming 
century.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Dr. Tellis follows:]

Prepared Statement of Dr. Ashley J. Tellis, Senior Associate, Carnegie 
           Endowment for International Peace, Washington, DC

    Good morning, Mr. Chairman, and Members of the committee. Thank you 
for inviting me to testify on the proposed cooperation between the 
United States and India in regards to atomic energy. This is obviously 
a complex subject with different facets stretching from the political 
to the technical. It is also a subject I have given some thought to and 
have written about in the past.\1\ As requested in your letter, I will 
focus my oral and written remarks this morning mainly on the strategic 
logic underlying the President's initiative on civil nuclear 
cooperation and its importance for the transforming U. S.-Indian 
relationship. I will be happy, however, to cover those aspects that I 
have not touched on in my formal testimony during the discussion that 
follows. I respectfully request that my statement be entered into the 
record.
---------------------------------------------------------------------------
    \1\My previous reflections on different aspects of the U.S.-Indian 
nuclear cooperation initiative can be found in Ashley J. Tellis, 
``South Asian Seesaw: A New U.S. Policy on the Subcontinent,'' Policy 
Brief, 38 (Washington, D.C.: Carnegie Endowment for International 
Peace, May 2005); Ashley J. Tellis, ``India as a New Global Power: An 
Action Agenda for the United States'' (Washington, D.C.: Carnegie 
Endowment for International Peace, June 2005); Ashley J. Tellis, 
Testimony to the House Committee on International Relations, 
Subcommittee on Asia and the Pacific, on ``The United States and South 
Asia,'' June 14, 2005; Ashley J. Tellis, ``Should the US Sell Nuclear 
Technology to India?--Part II,'' YaleGlobal Online, November 10, 2005; 
and, Ashley J. Tellis, Prepared Testimony to the House Committee on 
International Relations on ``The U.S.-India `Global Partnership': How 
Significant for American Interests?'' November 16, 2005.
---------------------------------------------------------------------------
    The United States and India today are confronted by an incredible 
opportunity to craft a new global partnership that promises to advance 
a range of common interests in a way that was simply impossible during 
the Cold War. These interests encompass a wide variety of issues 
ranging from the preservation of peace and stability in a resurgent 
Asia over the long term, through the current exigencies relating to the 
global war on terror, to promoting complex collective goods such as 
arresting the spread of weapons of mass destruction, managing climate 
change, and promoting liberal democracy and an open trading system.
    Thanks to the tight bipolarity of the Cold War, U.S.-Indian 
relations during that entire epoch were characterized by alternation: 
in almost every decade, troughs of estrangement invariably followed 
peaks of strong cooperation. Despite the desires of leaders on both 
sides, the quest for a strong bilateral relationship was repeatedly 
frustrated, which from an American perspective appeared to be the case 
for at least three reasons unique to India: first, New Delhi's emphatic 
determination to pursue a non-aligned foreign policy at a time when 
liberal states were under threat from global communism; second, India's 
relative weakness during much of the Cold War caused by its pervasive 
economic underperformance that, in turn, sealed its strategic 
irrelevance to the global system; and, third, India's anomalous nuclear 
status since 1974 when, in becoming ``a state with nuclear weapons, but 
not a nuclear weapon state,'' New Delhi found itself cast into a 
netherworld where it soon became the most important target of global 
anti-proliferation efforts.
    By the time the Cold War ended, the first two impediments were on 
their way to being resolved. The demise of the Soviet Union destroyed 
the international system that made non-alignment structurally relevant 
and freed both the United States and India to seek better relations 
undistracted by the pressures of Cold War geopolitics. By 1991--and 
although it was difficult to see this clearly at the time because of 
New Delhi's financial crisis--the Indian economy was also on its way to 
becoming a star performer, having left behind the abysmal 3.5 percent 
``Hindu rate of growth'' that had characterized its productive 
performance since independence.
    To its credit, the Clinton administration, perceiving both these 
realities, made an initial effort to construct a new relationship with 
India. A wide-ranging diplomatic dialogue was instituted in the hope 
that the two democracies could find common ground, and India was 
designated a ``big emerging market'' worthy of special U.S. commercial 
attention. But, despite its good intentions, the Clinton administration 
could not redress the third impediment that had by now come to haunt 
U.S.-Indian relations, namely India's anomalous nuclear status which 
made it the single most important target of U.S. anti-proliferation 
activities worldwide. Confronted by this challenge, the administration 
attempted to implement two different policies towards India. It began 
with an effort to improve ties with New Delhi across the board, while 
simply quarantining the nuclear issue in the hope of preventing it from 
contaminating improvements that might be realized in other areas of the 
bilateral relationship. This approach, however, quickly reached the 
limits of its success because the U.S.-led anti-proliferation efforts 
since 1974 had effectively succeeded in institutionalizing a complex 
global technology denial regime that prevented India from getting 
access even to important non-strategic technologies because of fears 
that these might eventually leach into its nuclear programs. India's 
irregular nuclear status under the Non-Proliferation Treaty had in fact 
become such an impediment that the Clinton administration's strategy of 
quarantining the nuclear issue failed either to resolve the nuclear 
disagreement or to transform the bilateral relationship.
    By the second term, the Clinton administration emphasized an 
alternative strategy, driven largely by its efforts to tighten the 
global nonproliferation regime. While continuing its previous effort to 
improve relations with India in a variety of areas such as diplomatic 
engagement and defense cooperation, the administration focused its 
energies simultaneously on capping, rolling back, and eventually 
eliminating India's nuclear weapons program. This shift in emphasis, 
unfortunately, turned out to be unsuccessful: not only did it 
exacerbate the already high Indian frustration with the U.S.-led 
technology denial regime, but it finally provoked New Delhi into a 
spectacular act of defiance through the nuclear test series of 1998 
when India in a deliberate challenge to the international order 
declared itself to be a ``nuclear weapon state.''
    Although much of this story may sound like ancient history, it is 
worth remembering for two important reasons that are critical to 
understanding the strategic wisdom underlying President Bush's decision 
to initiate civilian nuclear cooperation with India.
    First, the transformation of U.S.-Indian relations, as desired by 
the President and which enjoys bipartisan support in Congress, cannot 
be consummated without resolving the problems caused by India's 
anomalous status in the nuclear non-proliferation order. The Clinton 
administration spent eight long years trying to improve U.S. relations 
with India, while at the same time avoiding any effort to alter India's 
status as an outlier in the global non-proliferation system. The 
historical record shows conclusively that well intentioned though it 
was--and perhaps even necessary--this strategy ultimately failed. An 
old maxim of military strategy calls on leaders to ``reinforce success, 
abandon failure.'' President Bush's initiative on civil nuclear 
cooperation with India is an effort to do just that, given that all 
other U.S. policies since at least 1974 have by now proven to be less 
than successful.
    Second, the transformation of U.S.-Indian relations, as desired by 
the President and which enjoys bipartisan support in Congress, cannot 
be inherently schizophrenic if it is to be successful enough to advance 
common American and Indian interests in this new century. As our ties 
with friends and allies in Europe and Asia demonstrate, the United 
States has a variety of bilateral relationships defined by different 
degrees of intensity and intimacy. What all these relationships have in 
common, however, is that in no case is any U.S. partner made the 
deliberate target of a punitive policy concertedly pursued by 
Washington. Through his proposal for full civil nuclear cooperation 
with India, President Bush has in effect conveyed his belief that if 
India is to become a full strategic partner of the United States in 
this new century, a comparable courtesy must be extended to New Delhi 
as well. Stated in a different way, the President has recognized that 
it is impossible to pursue a policy that simultaneously seeks to 
transform New Delhi into a strategic partner of the United States on 
the one hand, even as India remains permanently anchored as 
Washington's nonproliferation target on the other.
    These two reasons combine to underscore the point that Secretary 
Rice made in her recent testimony to this committee. Far from being an 
appendage to growing U.S.-Indian ties, bilateral civilian nuclear 
cooperation promises to become ``the key that will unlock the progress 
of our expanding relationship.'' Congressional action to implement this 
initiative is therefore critical not simply because it will help 
address India's vast and growing energy needs--though it will certainly 
do that--or because it will mitigate the burdens of environmental 
pollution and climate change in South Asia--though those must be 
counted among its benefits as well--but because it symbolizes, first 
and foremost, a renewed American commitment to assisting India meet its 
enormous developmental goals and thereby take its place in the 
community of nations as a true great power.
    Renewed civilian nuclear cooperation thus becomes the vehicle by 
which the Indian people are reassured that the United States is a true 
friend and ally responsive to their deepest aspirations. By altering 
the existing web of legal constraints on civilian nuclear cooperation 
with India, Congress would also expand simultaneously India's access to 
a wide range of controlled technologies that are useful for numerous 
peaceful economic endeavors going beyond merely the production of 
electricity. The successful implementation of the civilian nuclear 
cooperation agreement would therefore epitomize'as Prime Minister 
Manmohan Singh told Under Secretary of State Nicholas Burns in New 
Delhi in February 2006--``a historic reconciliation between the United 
States and India and a new concord after many decades of anxiety, 
distrust, and suspicion in our bilateral relations.''
    The increasing value of this transforming bilateral relationship 
with India for the United States will be manifested most clearly in 
three areas that will be vitally important to American security in this 
century.
    To begin with, a strong American partnership with a democratic 
India will be essential if we are to be able to construct a stable 
geopolitical order in Asia that is conducive to peace and prosperity. 
There is little doubt today that the Asian continent is poised to 
become the new center of gravity in international politics. Most 
analyses suggest that although national growth rates in several key 
Asian states--in particular Japan, South Korea, and possibly China--are 
likely to decline in comparison to the latter half of the Cold War 
period, the spurt in Indian growth rates, coupled with the relatively 
high though still marginally declining growth rates in China, will 
propel Asia's share of the global economy to some 43 percent by 2025, 
thus making the continent the largest single locus of economic power 
worldwide. An Asia that hosts economic power of such magnitude, along 
with its strong and growing connectivity to the American economy, will 
become an arena vital to the United States--in much the same way that 
Europe was the grand prize during the Cold War. In such circumstances, 
the administration's policy of developing a new global partnership with 
India represents a considered effort at ``shaping'' the emerging Asian 
environment to suit American interests in the twenty-first century.
    This should not be interpreted as some kind of thinly veiled code 
signifying the polite containment of China, which many argue is in fact 
the administration's secret intention. Such claims are, in my judgment, 
erroneous. A policy of containing China is neither feasible nor 
necessary for the United States at this point in time. Further, it is 
not at all obvious that India, currently, has any interest in becoming 
part of any coalition aimed at containing China. Rather, the objective 
of strengthening ties with India is part of a larger--and sensible--
administration strategy of developing good relations with all the major 
Asian states. As part of this general effort, it is eminently 
reasonable for the United States not only to invest additional 
resources in strengthening the continent's democratic powers but also 
to deepen the bilateral relationship enjoyed with each of these 
countries--on the assumption that the proliferation of strong 
democratic states in Asia represents the best insurance against intra-
continental instability as well as threats that may emerge against the 
United States and its regional presence. Strengthening New Delhi and 
transforming U.S-Indian ties, therefore, has everything to do with 
American confidence in Indian democracy and the conviction that its 
growing strength, tempered by its liberal values, brings only benefits 
for Asian stability and American security. As Under Secretary of State 
Nicholas Burns succinctly stated in his testimony before the House 
International Relations Committee, ``By cooperating with India now, we 
accelerate the arrival of the benefits that India's rise brings to the 
region and the world.''
    Further, a strong American partnership with a democratic India will 
be essential if we are to succeed in preserving an efective non-
proliferation system that stems the difusion of nuclear materials and 
technologies required for the creation of nuclear weapons. The central 
component of civilian nuclear cooperation is critical in this regard 
because it formalizes a bargain that gives India access to nuclear 
fuel, technology, and knowledge on the condition that New Delhi 
institutionalizes stringent export controls, separates its civilian 
from its strategic facilities and places the former under safeguards, 
and assists the United States in preventing further proliferation. 
Bringing India into the global non-proliferation regime in this way 
produces vital benefits both for the United States and for all non-
nuclear weapons states insofar as it transforms India's hitherto 
commendable nonproliferation record, which is owed entirely to 
voluntary sovereign decisions made by successive Indian governments, 
into a formal and binding adherence through a set of international 
agreements. Thanks to the President's initiative, India has now agreed 
to obligations that in fact go beyond those ordinarily required of NPT 
signatories, such as refraining from transfers of enrichment and 
reprocessing technologies to states that do not already possess them 
and supporting efforts to limit their spread; working with the United 
States to conclude a multilateral Fissile Material Cutoff Treaty; 
continuing its unilateral moratorium on nuclear testing; and adhering 
to the Missile Technology Control Regime (MTCR) and the Nuclear 
Suppliers Group (NSG) guidelines.
    Bringing India into the global nonproliferation regime through a 
lasting international agreement that defines clearly enforceable 
benefits and obligations not only strengthens American efforts to stem 
further proliferation but also enhances U.S. national security. The 
President's accord with India advances these objectives in a fair and 
direct way. It recognizes that it is unreasonable to ask India to 
continue to bear the burdens of contributing towards ensuring the 
viability of the global nonproliferation regime in perpetuity, while it 
suffers stiff and encompassing sanctions from that same regime. And so 
the President has asked the Congress to support his proposal to give 
India access to nuclear fuel, technology, and knowledge in exchange for 
New Delhi formally becoming part of the global coalition to defeat the 
proliferation of weapons of mass destruction. In other words, he offers 
India the benefits of peaceful nuclear cooperation in exchange for 
transforming what is currently a unilateral Indian commitment to 
nonproliferation into a formally verifiable and permanent international 
responsibility.
    The fruits of this initiative are already in evidence, for example, 
in connection with India's strong support for the U.S.-led efforts to 
persuade Iran to live up to its freely accepted non-proliferation 
obligations. This Indian decision has not been easy because of New 
Delhi's otherwise good relations with Tehran. India and Iran share 
historical links that go back thousands of years; India and Iran played 
a pivotal role in ensuring the viability of the Northern Alliance in 
Afghanistan during the darkest days of Taliban rule; India remains one 
of Iran's most important customers for oil and natural gas, and it 
continues discussions with Islamabad and Tehran about the construction 
of a gas pipeline that would link the three countries and help meet 
India's large and growing energy needs. Many voices in the American 
debate on the civilian nuclear initiative have demanded that India 
curtail its economic and diplomatic links to Iran as the price of 
securing U.S. cooperation in regards to civilian nuclear energy. Such 
demands are unreasonable. The negotiations over the Iranian-Pakistani-
Indian gas pipeline are unlikely to succeed simply because of economic 
considerations, but New Delhi is unlikely to concede to any demands 
that rupture its diplomatic and economic relationship with Tehran if 
these are seen to have no relationship with the issue of nuclear 
proliferation. On this score, India is likely to behave in a fashion 
identical to that of our close allies such as Japan and Italy. It will 
demand--as it has done thus far--that Tehran live up to its 
international non-proliferation commitments and obligations, and it 
will abide by any decisions made by the international community to 
enforce these responsibilities, but it is unlikely to unilaterally 
sacrifice its bilateral relationship with Iran in areas that are not 
perceived to have any connection with non-proliferation and which do 
not pose a threat to common security.
    Finally, a strong American partnership with a democratic India will 
be essential if we are to successfully preserve a global order that 
protects liberal societies and advances freedom in myriad ways. This 
objective encompasses a congeries of diverse goals, including promoting 
democracy, defeating terrorism and religious extremism, collaborating 
to protect the energy routes and lines of communication supporting free 
trade and commerce, expanding the liberal international economic order, 
and managing climate change--each of which is critical to the well 
being of the United States. It does not take a great deal of 
imagination to recognize that for the first time in recent memory 
Indian and American interests on each of these issues are strongly 
convergent and that India's contribution ranges from important to 
indispensable as far as achieving U.S. objectives is concerned.
    The President's intention in proposing civilian nuclear cooperation 
with India is fundamentally driven by his conviction that every 
impediment to a closer relationship ought to be eliminated, so that 
both our countries can enjoy the fullest fruits of an ever-tighter 
partnership in regards to each of the issues above. It is also driven 
by his desire to assist New Delhi's growth in power on the assumption 
that a strong democratic India would ultimately advance America's own 
global interests far better than a weak and failing India would. The 
key word, which the administration understands very well in this 
context, is ``partnership.'' A strengthened bilateral relationship does 
not imply that India will become a treaty-bound ally of the United 
States at some point in the future. It also does not imply that India 
will become a meek, compliant and uncritical collaborator of the United 
States in all its global endeavors. Rather, India's large size, its 
proud history, and its great ambitions, ensure that it will always 
pursue its own interests--just like any other great power.
    During his recent visit to the United States in March this year, 
India's Foreign Secretary Shyam Saran, appealed to his American 
interlocutors to recognize that ``when an open society like India 
pursues its own interests, this is more likely than not to be of 
benefit to the United States.'' If the President's views on India going 
back to the campaign in 2000 are any indication, George W. Bush had 
already reached this conclusion at least five years ago. In fact, every 
initiative involving India, beginning with the Next Steps in Strategic 
Partnership in the first term and ending up with the proposal on 
civilian nuclear cooperation in the second, suggest that the President 
has concluded--correctly--that a strong and independent India 
represents a strategic asset, even when it remains only a partner and 
not a formal ally. This judgment is rooted in the belief that there are 
no intrinsic conflicts of interest between India and the United States. 
And, consequently, transformed ties that enhance the prospect for 
consistent ``strategic coordination'' between Washington and New Delhi 
on all the issues of global order identified above serve U.S. interests 
just as well as any recognized alliance.
    The question that is sometimes asked in this connection is whether 
a close U.S.-Indian partnership would be impossible in the absence of 
civilian nuclear cooperation. The considered answer to this question is 
``Yes.'' This is not to say that U.S.-Indian collaboration will 
evaporate if civilian nuclear cooperation between the two countries 
cannot be consummated, but merely that such collaboration would be 
hesitant, troubled, episodic, and unable to realize its full potential 
without final resolution of the one issue that symbolically, 
substantively, and materially kept the two sides apart for over thirty 
years. At a time when U.S.-Indian cooperation promises to become more 
important than ever, given the threats and uncertainties looming in the 
international system, the risk of unsatisfactory collaboration is one 
that both countries ought not to take.
    Through the civilian nuclear cooperation initiative, President Bush 
has embarked on a bold and decisive step to eliminate those long-
standing impediments between Washington and New Delhi and to place the 
evolving U.S-Indian relationship on a firm footing guided by a clear 
understanding of the geo-strategic challenges likely to confront the 
United States in the twenty-first century. Recognizing that a new 
global partnership would require engaging New Delhi not only on issues 
important to the United States, the administration has moved rapidly to 
expand bilateral collaboration on a wide range of subjects, including 
those of greatest importance to India. The proposal pertaining to 
extending civilian atomic energy cooperation to India is, thus, part of 
a larger set of Presidential initiatives involving agriculture, 
cybersecurity, education, energy, health, science and technology, 
space, dual-use high technology, advanced military equipment, and 
trade.
    Irrespective of the issues involved in each of these realms, the 
President has approached them through an entirely new prism, viewing 
India, in contrast to the past, as part of the solution rather than as 
part of the problem. He has judged the growth of Indian power to be 
beneficial to America and its geopolitical interests in Asia and, 
hence, worthy of strong support. And, he is convinced that the success 
of Indian democracy, the common interests shared with the United 
States, and the human ties that bind our two societies together, offer 
a sufficiently lasting assurance of New Delhi's responsible behavior so 
as to justify the burdens of requesting Congress to amend the relevant 
U.S. laws (and the international community, the relevant regimes) 
pertaining to peaceful nuclear trade. On all these matters, I believe--
without any qualification--that the President has made the right 
judgment with respect to India and its importance to the United States. 
I hope that Congress will agree.
    Thank you, Mr. Chairman, for your attention and consideration.

    The Chairman. Well, thank you very much, Dr. Tellis. As I 
mentioned at the beginning of the hearing, we will try to have 
a 5-minute round so that we respect the rights of all Senators 
to ask questions. Likewise, we will have another panel, another 
round of questions, and two votes at 12 o'clock.
    So, I will start the questioning, and start the 5 minutes, 
by indicating that I would observe, as you have, that, for 32 
years, the United States, in one form or other, has expressed 
disapproval of India's nuclear weapons program--with a sense of 
shock and outrage, to begin with, followed by a number of 
sanctions. These, likewise, were levied on Pakistan after it 
commenced a nuclear program, and remained in place for quite a 
long while.
    Many Senators around the table today were a part of a 
meeting with Secretary Powell shortly after 9/11/2001, in which 
we were summoned to S-407. Secretary Powell said, ``You must 
lift all the sanctions on India and Pakistan immediately.'' And 
there were many authors of all sorts of sanctions over the 
years, people thinking of other ways that somehow we might make 
our point, and they said, ``All of them?'' And he said, 
``Yes.'' And he said, ``Furthermore, forever, permanently, not 
just for a year or a trial situation. This is a new world. It's 
a new relationship. We all have to get used to that fact.'' 
Now, that was quite a cold drink of water for many people, but, 
nevertheless, it happened, and we proceeded into a different 
relationship.
    In the case of India, I'm one who applauds the fact that 
the relationship has moved very, very steadily, in a commercial 
sense, in an intellectual sense, as we talk about the students 
coming and going. Tom Friedman's book, ``The World is Flat,'' 
about his experiences, illustrates a very, very important 
aspect of it. But, at the same time, we also have been working 
our way through the problems of AQ Khan and testimony with 
regard to Libya, North Korea, Iran, elsewhere, where his 
minions, or he personally, have worked.
    So, it's still a dangerous world. And, likewise, in the 
talks with the Chinese last week or previously, we really 
didn't get into winding up their program, or inspecting anybody 
in China. It's a given that whatever they have to do, they are 
planning to do.
    The Indians recognize that, too, and they've made that 
point to us. They are two huge countries. It is all well and 
good to talk about a whole raft of countries around the world 
who might entertain nuclear situations. I remember going to 
Brazil in the mid-1980s, and the Defense Minister revealing to 
me that they were working on a program. Why he did so, I have 
no idea, except that he wanted to tell somebody, I suppose, 
about all of it. Now, they decided they didn't want to do that, 
after a while. Ditto for South Africa. I saw Qaddafi in Libya 
in September, and he explained why he didn't do it. But, 
nevertheless, he wants defense from us and the United Kingdom. 
If he's not going to have nuclear weapons, he wants 
conventional people to defend him. These are the realities. And 
I think you gentlemen have expressed that.
    I've asked you, Dr. Carter, for more information. You 
indicate that whatever may be the aspirations of many of us for 
a dialog with India on energy--and this is an attractive aspect 
of this--nuclear power might satisfy a part of India's energy 
needs, to a greater extent. You've indicated you suspect that 
in the next 10-20 years or so, that this is not de minimis, but 
nevertheless, not a substantial change in the percentage of 
power, and that, with regard to oil, they'll still increase 
their demands for that, which is a very big problem. During my 
visit in Libya last summer, I saw a hotel filled with Indian 
and Chinese oilmen, pinning down every last acre in the place. 
Ditto for the rest of Africa. We need to take that seriously 
and have that dialog.
    Why do you feel there will be so little substitution, given 
nuclear energy? Should our dialog really be more on clean-coal 
technology or other hybrid cars? How do we get into it with 
India on what I believe is likely to be as crucial a problem as 
nuclear proliferation--namely, the potential conflicts over the 
energy resources of the world? Could you respond to that for a 
moment?
    Dr. Carter. Yes, Mr. Chairman, thank you. I think you 
captured it exactly right. Nuclear power is an important part 
of the Indian energy future. I don't mean to say that I would 
like to see it constrained in any way, but one can't exaggerate 
the extent to which it is going to spell a difference for 
India.
    India's energy future will be determined by its strategies 
for both electricity generation and oil consumption. India's 
electricity generation is currently dominated by coal, but 
Indian coal is of poor quality and highly polluting. The idea 
of cooperating with India on clean coal is adumbrated somewhat 
in the Bush-Singh deal, and burning Indian coal more cleanly 
will do more than anything we are talking about here to address 
global warming, the Indian local environment and the Indian 
economy.
    With respect to oil, what you said is also exactly right. 
This initiative won't have much effect on Indian oil 
consumption, which is a huge problem. Sadly, neither India nor 
the United States is likely to achieve substantial substitution 
between nuclear power and oil consumption in the near future. I 
am a big supporter of more nuclear power in the United States, 
as well, and I think it is unfortunate that we have not built 
any additional nuclear plants in the last couple of decades.
    The Chairman. Well, I thank you for the answer and will 
look forward to more dialog on that subject. It just appears to 
me that the agreement--not the nuclear part, but other parts of 
the agreement--touch upon the energy issues. Hopefully, in our 
new relationship, that dialog will become more intense and 
constructive in both countries.
    Dr. Tellis. Mr. Chairman, could I add something to that?
    The Chairman. Oh, yes.
    Dr. Tellis. I think Dr. Carter is right about the near-term 
consequences. The biggest difference that nuclear energy will 
make is between what the Indians call a ``coal optimal'' and a 
``coal maximal'' regime. It does make the difference to whether 
the Indians go full steam in the direction of coal, versus some 
component of nuclear. But that is really a near-term problem.
    Over the longer term, their biggest constraint with respect 
to nuclear energy has been that they have not had access to 
international nuclear cooperation. And so, all the goals, all 
the objectives that they have defined for themselves with 
respect to nuclear energy were premised on the assumption that 
they would have to develop this technology and build it 
indigenously.
    If this agreement goes through, the rules of the game 
change. India gets access to foreign nuclear technology, which 
does change the quality of the energy mix that they seek.
    The Chairman. I would advertise, again, Senate bill 1950, 
which staff reminds me was introduced last year, the India-
United States Energy Security Act. And I really feel this is a 
tremendous thing to get into, but that would be another 
hearing, I suspect.
    Senator Biden.
    Senator Biden. Thank you very much.
    Let me apologize to the last two witnesses for not being 
here for your testimony. I have a bill in the Judiciary 
Committee, and there is a group of witnesses who flew in from 
around the country, as well, and the hearing is taking place at 
the same time. That's the reason I absented myself.
    Let me get right to my questions.
    Is there any reason why, in your view--obviously, you 
cannot speak for India--but why India should not join the PSI 
and adhere to the guidelines of the Australia Group and the 
Wassenaar Agreement? Is there any reason, from their 
perspective, that you could see, why they should not sign onto 
those three agreements? Anyone.
    Dr. Tellis. I think there is no--there's no reason, in 
principle, Senator. And, in fact, we have been, in our 
conversations with India, urging them to adhere to both the 
Australia Group and the Wassenaar Agreement. There is a 
specific issue with respect to PSI, and it has to do with the 
Suppression of Unlawful Activities at Sea Act. The way the SUA 
Convention has been framed, it offers protections to legitimate 
nuclear weapons states and to nonnuclear weapons states under 
the terms of the NPT Treaty. By definition, India does not fall 
in either of those two categories. And so, at the moment, what 
they appear to be doing is conducting a legal review to see how 
they can, without prejudice to their national interests, get 
some kind of----
    Senator Biden. How would their national interests be 
prejudiced, from their perspective?
    Dr. Tellis. I think their fear is that the SUA protects 
cargoes that come from nuclear weapons states and nonnuclear 
weapons states. It has nothing to say about cargoes involving 
countries that fall into this netherworld, which is India, 
Pakistan, and Israel. And so, they are working out, legally, 
some kind of formulation that would allow them to join PSI.
    Senator Biden. Is there any reason, gentlemen, why Congress 
shouldn't insist that India sign onto these agreements before 
we move forward with this agreement? Anyone. That's a question 
any and all of you, or none of you, or anyone in the back of 
the room, or anybody who wants to speak up. [Laughter.]
    Senator Biden. Ash.
    Dr. Carter. After India works through some of the legal 
issues, there is no reason why Delhi should not be able to sign 
on to any of these agreements. Your question is whether they 
should be required to do so, and that depends on what our 
intention is in requiring them to do so. I fully expect that, 
over time, they will join the PSI and adhere to the guidelines 
of the Australia Group and Wassenaar Agreement. The question 
is: Why, at this point, require them to do so?
    This gets to the question of whether what I described as 
the imbalance in the deal--in which India got something very 
big in nuclear recognition, and we got a lot of things that are 
future and hypothetical, but also potentially quite big--can be 
rebalanced in some way. The measures you described do not go 
very far toward rebalancing the deal, as they are perfectly 
useful things to require of India in the long run.
    If our intention in getting more from India on the nuclear 
front is to undo or mitigate the damage done by nuclear 
recognition, this cannot be achieved with any technical----
    Senator Biden. Yeah.
    Dr. Carter [continuing]. Measure.
    Senator Biden. The intention would be--and I'm not at all 
sure we should do it, but I'm investigating that--would be to 
demonstrate, less to us than to the rest of the world, that 
what we're really relying on here is Indian intentions. We're 
really taking, on faith, that India has no intention to break 
out, in any way, with regard to their nuclear capability, that 
they have peaceful intentions and require this recognition in 
order to be able to generate a civilian industry. And, second, 
what is really a rock-bottom distinction we make between India 
and other nations is that they're a democracy, they're acting 
in good faith, and that's why they are opted out, in a way, 
that we're not opting out anyone else who has previously gone 
down this road. That would be the rationale, if there was one.
    And, Dean, you're shaking your head and nodding. You remind 
me of some of my staff. Why don't you just say what the hell 
you think, instead of nod. Okay? [Laughter.]
    Ambassador Gallucci. Senator, thank you for recognizing me. 
[Laughter.]
    Senator Biden. Thank you for seeking recognition by the 
grimace on your face. [Laughter.]
    Ambassador Gallucci. Senator, I didn't leap to try to 
answer your question, because I oppose the approval of this 
deal, so the idea of, you know, working on how to improve it at 
the margins was not something that appealed to me. And, I agree 
with Ash, given the concerns that I have about this deal, they 
are not going to be met by that marginal improvement.
    The grimace, which you correctly picked up on, was at the 
idea that we are trusting India to proceed with a civil program 
when, in fact, I think the deal is structured entirely to 
protect its opportunities to pursue a nuclear weapons program 
and expand it. We contribute to that as we provide uranium--
there's a replacement principle here, there's more uranium 
available. Facilities that would be useful for the weapons 
program, the Indians explicitly exclude from safeguards.
    So, I think what we're trusting here is that they're going 
to continue to be a nuclear weapons state, and we are going to 
be legitimizing that, at our great peril.
    Senator Biden. I realize my time's up. We clearly are 
legitimizing that, and they're going to remain a nuclear 
weapons state. They're going to do that, no matter what. But 
the question--and I'm not asking a question, but the question 
raised from that, Mr. Chairman--is whether or not they are 
using this as an opportunity to be able to significantly expand 
their nuclear program, and, at the same time, their civilian 
program. Because you accurately point out there's a limitation 
on the amount of uranium available to them, and now they have 
to make a hard choice. They have to make a hard choice whether 
to reserve that for their weapons program or their civilian 
program. But there's not enough for their civilian program 
anyway, as I'm told. And so, it does get down a basis of trust, 
but--it seems to me. But I understand your point.
    And I'm over my time, and I thank the Chair.
    The Chairman. Thank you, Senator Biden.
    Senator Hagel.
    Senator Hagel. Mr. Chairman, thank you.
    Gentlemen, welcome. Thank you for your continued 
contributions to our country and this testimony, this morning, 
which is so very important.
    I spent a week in India and Pakistan, over the last 2 
weeks, during the Easter break, and had an opportunity to visit 
facilities and speak with the--both government and civilian 
leaders in both countries. And here's a question I'd like to 
put to each of you. In light of the testimony we've heard this 
morning, what my colleagues have noted, one of the references 
that Chairman Lugar made to Secretary Powell's comments after 
September 11, 2001--and I was one of those in that room that 
day that Secretary Powell noted that we should drop sanctions 
on Pakistan, India--not just for the year, but for a long time, 
but--always--because we have now entered a new age. It's just 
incidental, I suspect, that it's a new century. But the fact 
is, we have entered a new age. And I'd like to get your sense 
of--in light of all that we have heard this morning, your years 
of experience and expertise in nonproliferation, defense, 
diplomacy, economics, all that are woven into this same fabric 
of a nation's interest, of a world's interest--should we be 
reframing, should we be readjusting the entire framework of 
nonproliferation issues, including NPT, everything that has 
been the standard and the base and the foundation over the last 
50 years?
    When we look at the reality of the world that we live in 
and the continued reprocessing technology of uranium--who may 
have it, who probably will get it, who does have it--it's 
interesting to make policy, but unless that policy is relevant 
to the times and the challenges, it's nonsense. And I think we, 
too often in this town--I suspect, all nations' capitals--love 
to sit and listen and make policy, and especially listen to 
ourselves in these great echo chambers of wisdom--but we come 
up with completely irrelevant statements and issues when you 
try to connect those to the reality of what's actually going on 
in the world.
    So, my question is: Should we be just reassessing, 
reframing the entire nuclear framework that we have really come 
to rely on over the last 50 years?
    Secretary Perry.
    Dr. Perry. Thank you very much, Senator. I think that's a 
very important question, and I'd like to give you at least my 
version of that.
    We have entered a new age, in my judgment, and in this new 
age, the spread of nuclear weapons is an even more important 
problem than it was before. And I would think our policies 
ought to be designed to increase the actions we take to prevent 
the spread of nuclear weapons. In that sense, I am completely 
in accord with the point that Dr. Gallucci made in his 
testimony about the importance of this.
    The issue, in my mind, relative to this agreement, is: Does 
the agreement help us in that cause or deter us in that cause? 
In my judgment, the success in preventing the spread of nuclear 
weapons absolutely requires the cooperation of other major 
nations in the world; in particular, all of the nuclear powers 
of the world. India is a nuclear power. And I think we have a 
better chance of getting that cooperation if we work with them 
as strategic partners, than not. And it's for that reason alone 
that I support this agreement--reluctantly, but still support 
it.
    Senator Hagel. Thank you.
    Secretary Carter.
    Dr. Carter. I agree with what Dr. Perry just said. Your 
question also raises the issue of whether there are fundamental 
problems with the NPT regime. I'd say two things in response to 
that.
    The first is that the NPT is only one arrow in our quiver 
in protecting ourselves from nuclear weapons. The NPT is an 
important tool, but we should never think that the NPT alone is 
going to save us. The rogues pay no attention. They don't join, 
or they join and cheat. In this way, the effectiveness of the 
NPT is somewhat limited.
    The treaty's principal value is with respect to those who 
are not at all rogues, but might be tempted to develop a 
nuclear capability. As Bob Gallucci has indicated, the NPT has 
been an effective barrier to further proliferations, but it is 
not the only tool at our disposal.
    There is a tendency to say, ``Since the NPT doesn't do 
everything, maybe we ought to tear it up and throw it out.'' 
This approach underestimates the value of the treaty.
    There is one aspect of the NPT that I think we need to 
address going forward, and this is probably implied in what Dr. 
Perry said. In essence, the NPT allows states to develop 
nuclear power, but not the bomb. We all know that the boundary 
between a nuclear power program and a bomb program is not an 
impermeable one. Over time, we are going to have to try to 
expand the norm of the NPT to include not just nuclear weapons 
programs, but enrichment and reprocessing, as well. That is the 
next frontier for the NPT. You see it at work with respect to 
the Iranian program. You see it at work with respect to the 
Brazilian program. Just as we can't have a world where the bomb 
is in 80 or 90 countries, we really can't have a world in which 
enrichment and reprocessing is in 80 or 90 countries either. As 
additional states acquire enrichment and reprocessing 
capabilities, there is an increased risk that these programs 
will be abused or that these materials will fall into the wrong 
hands.
    The solution is not to tear up and abandon the NPT because 
it fails to do everything. Instead, we must expand the treaty 
to cover fissile materials as well as bombs.
    Senator Hagel. Thank you.
    Dr. Gallucci.
    Ambassador Gallucci. Senator, I think, for a long time, the 
issue of proliferation was a matter of states, nation-states. 
And the NPT is aimed at nation-states. And we have been 
remarkably successful in limiting the number of countries that 
have acquired nuclear weapons, compared to the countries that 
could, if they wished. And that's one of the reasons, and the 
principal reason, why I worry about this particular proposal, 
because I think it'll do damage to our efforts to limit the 
number of countries that have nuclear weapons.
    What's new--because you asked the question about whether we 
should be reconsidering all this--what's new is not the threat 
that would come from widespread proliferation to nation-states, 
but the additional threat over the last 10 years or so that we 
have now come to recognize, the quintessential threat, the 
ultimate threat of a real nondeterrable actor, al-Qaeda, with 
nuclear weapons. What do we do about that? And that goes to 
what Ash was talking about, a world in which plutonium moves 
around as a fuel, enrichment facilities are everywhere, and a 
switch can be turned to produce fissile material. That's a 
world we don't want to live in. That's a world in which the 
access to this material is going to get easier and easier over 
time. And that's a very dangerous one.
    It's related, here, because the Indian energy program does 
envision a breeder reactor fuel of cycle thorium-uranium-233. 
And I think it makes no more sense than anybody else's breeder 
fuel cycle, but it's out there; and it involves reprocessing 
and fissile material, as well as enrichment. That's an added 
concern I have about this arrangement, that it will involve 
fissile material in nuclear power production. It is not my 
principal concern, which is legitimizing India as a nuclear 
weapons state.
    India is, as Dr. Perry said, a nuclear power. And knowing 
that is certainly something that we should admit, and there's 
no question about that. But I think there is something terribly 
important about saying, at this point, we are going to proceed 
and accept its status as legitimate, because, as Ash Carter 
said, that really does suggest that eventually all will be 
forgiven. And I think the norm--I don't want to put it on the 
treaty--the norm against additional states acquiring nuclear 
weapons is that important. We don't want to leave a world where 
we can count on the fingers of two hands, how many states we 
have with nuclear weapons. If it gets more complicated than 
that, it'll get more dangerous than that.
    Senator Hagel. Thank you.
    Dr. Tellis.
    Dr. Tellis. The question you asked, Senator, is a very 
difficult one to answer. And I think Sir Karl Popper used to 
have a phrase, which he used often, called ``piecemeal social 
engineering.'' And I think our approach to dealing with what 
are the infirmities in the system ought to adopt that approach. 
I think the NPT has served us well. It's one of many 
instruments that we have. But there are three issues, in my 
judgment, that need resolution. One is the whole status of the 
fuel cycle and the rights that countries have to the fuel 
cycle, which can be used for both benign and malign purposes. 
The second is the status of the outliers and what that means 
for the future durability of the regime. And I support this 
agreement, because it's an effort to at least bring one of the 
three, and perhaps the most important outlier, into the regime. 
And the third is the whole question of the security of nuclear 
materials and nuclear weapons, which is not addressed directly 
by the NPT, but is part of the system.
    I think our efforts ought to be in each of these three 
areas. And if we proceed with gradualism, piecemeal social 
engineering, we come out ahead, rather than any bold attempts 
to redesign the system from scratch.
    Senator Hagel. Thank you.
    The Chairman. Thank you, Senator Hagel.
    Senator Boxer.
    Senator Boxer. Thank you so much. And I want to apologize 
in advance. I have to be somewhere in--5 minutes ago. So, I--
but I stayed, because this is so important.
    Mr. Chairman, I wanted to compliment you and Senator Biden. 
This panel is so terrific. And they really represent, I think, 
all of the views that we have in the Senate, some people who 
outright don't like this, some people who outright love this, 
and those in between. So, it's been very helpful to me.
    I want to ask a question about Iran, because I think 
that's, kind of, the unspoken--one of the unspoken issues. The 
other is China. So, I have two questions, and I'll make them 
fast.
    There are those who believe that timing is everything. And 
surely all of us would agree, timing is something. And this 
isn't coming to us in a vacuum. There are other things going on 
in the world. And I think it's fair to say that, whether you're 
a Republican, a Democrat, an Independent, and wherever you 
live, you're worried about Iran's nuclear capabilities in the 
future. So, now here's--this comes to us at this particular 
time.
    One of the members of the second panel, Gary Milhollin, 
testified before the House. And this is what he said, and I 
want to get your response--and I'll start with Dr. Gallucci--
``If stopping Iran is our first priority, we should shelve the 
India deal, at least until the Iranian nuclear crisis is over. 
Iranian officials are citing the deal almost every day to argue 
that the United States cares less about proliferation than 
about using proliferation rules to support its friends and 
punish its adversaries. Shelving the deal would prove that this 
is not true.''
    Do you agree with that statement, Dr. Gallucci?
    Ambassador Gallucci. I think there is some truth in it, but 
I would be concerned that if you embraced it entirely, you 
would be caught on the proposition that we're going to hold our 
strategic relationship with India hostage to a timing issue 
with Iran. And it is perhaps true that Dr. Milhollin is 
thinking we're not going to solve the Iran problem anytime 
soon, so it can hang on that hook for a long time. But I think, 
in other words, Senator, that we are rhetorically handicapped, 
as he suggests, as we go to various fora--U.N. Security 
Council, for example--to argue that Iran poses an extraordinary 
threat to regional and international security by its program, 
which, we are asserting, is aimed at nuclear weapons 
acquisition, and they deny, while, at the same time, adopting a 
different policy with India. But, as I said in my prepared 
remarks, I don't like the comparison, because I, myself, can 
see India as a more responsible player in the international 
arena than Iran.
    Senator Boxer. So, what you're basically saying is, it's a 
little bit of a--it's constraining us in our rhetoric at a time 
when we should not be so constrained. But you don't think that, 
as a premise, it's--we shouldn't base our decision on this. Is 
that basically what you're saying?
    Ambassador Gallucci. I'd accept that summary, Senator.
    Senator Boxer. OK. Anybody--do most people agree with that? 
[Witnesses all nodded heads.]
    OK. Then let me move on, because, Dr. Tellis, something 
confused me. I read that you wrote to the administration, ``If 
the United States is serious about advancing its geopolitical 
objectives in Asia, it will most--it would almost, by 
definition, help New Delhi develop strategic capabilities such 
that India's nuclear weaponry and associated delivery systems 
could deter against the growing and utterly more capable 
nuclear forces Beijing is likely to possess by 2025.'' And 
this--according to the Washington Post, you wrote this to 
Condoleezza Rice and her folks over at State in arguing for 
this.
    And I've always believed that's, kind of, the silent, but 
moving, force behind this. But then, today, in your statement, 
you said, ``A policy of containing China is neither feasible 
nor necessary for the United States. And it is not at all 
obvious that India has any interest in becoming part of a 
coalition aimed at containing China.'' So, which is your view?
    Dr. Tellis. Both. Except that they were said in different 
contexts. The first was in a publication, when I was 
discussing, abstractly, the future of the balance of power in 
Asia. The second is really what the policy consequences are. I 
have never advocated that we support the Indian nuclear program 
as a way of deterring the Chinese. The Indians will buy their 
own insurance, make their own investments in that regard.
    The only thing I have said is that any agreement that 
requires India to constrain its nuclear weapons program is 
obviously not going to be acceptable to the Indians. And I 
believe, personally, it shouldn't--it will also not be in our 
interest.
    Senator Boxer. Thank you, Doctor. I just don't see how you 
can make both those statements. But we don't have time.
    Thank you.
    The Chairman. Thank you very much, Senator Boxer.
    Senator Chafee.
    Senator Chafee. Thank you, Mr. Chairman. Thank you, 
gentlemen, for your testimony.
    Dean Gallucci, you said in your testimony, ``If we do this 
deal, ask how we will avoid offering a similar one to Brazil or 
Argentina if they decide on nuclear weapons acquisition, or our 
treaty ally South Korea.'' Would you expand on what might occur 
in that scenario?
    Ambassador Gallucci. That was a shorthand version of what 
Ash Carter was arguing to you, I think, unless he denies it. 
But I do believe that we're both looking at the same 
phenomenon. We're looking not at the rogue states as the issue 
here. I didn't mention North Korea. I brought up Iran in, kind 
of, a favorable context for India. But the issue here is, when 
you have a state that has the capability to move from a 
peaceful nuclear program to a nuclear weapons program, a state 
with a record of--good behavior--in other words, it looks like 
a state of the kind India is right now, and that good behavior 
is used as a justification for abandoning the policy that we've 
had for decades. I ask here this question: If we abandon the 
policy of no nuclear cooperation with states that have nuclear 
weapons programs and are not the original five members of the 
Non-Proliferation Treaty, then what's to stop other states, 
like Argentina, Brazil, and South Korea? And I picked those for 
the same reason Ash did, because they had nuclear weapons 
programs at one point, and they have capable civilian programs 
now. If there's no penalty here, they could go through a 
calculation--maybe not the current regime or the next one, but 
the one after that. And suppose there's no norm in place about 
not acquiring nuclear weapons, and the norm is, no more nuclear 
weapons states. Well, ``more,'' after what? Well, after the 
original five. That's the norm. Right? And if you violate it, 
in this case, and say, ``Well, we're doing it, because India is 
really good,'' well, we've got other ``really good'' states, 
and, before you know it, you'll have a lot of ``really good'' 
states with nuclear weapons, I fear. And the world is--while 
not a safe place, it's safer for the very few numbers of 
weapons states that we have, in my view.
    Senator Chafee. Thank you very much.
    And, Secretary Perry--Carter--excuse me--you said that 
India has no AQ Khans--there are no AQ Khans in India. Yet, in 
2004 and 2005, the United States sanctioned Indian scientists 
and chemical companies for transferring Iran--to Iran, WMD-
related equipment and technology. How confident are you that 
there are no AQ Khans?
    Dr. Carter. That's a very good question. I cannot be 
certain, but I am unaware of any evidence that there have been 
Indian AQ Khans; that is, networks illicitly transferring the 
wherewithal of nuclear weapons of mass destruction. I believe 
it is accurate to say, and is in the public record, that Indian 
firms have been caught making transfers of technology related 
to ballistic missiles and possibly chemical weapons, as well. 
Although their transgressions are less severe than those 
committed by AQ Khan, the United States should make clear its 
expectations that these illicit transfers will stop.
    This brings me to a more general point. India has gotten 
something huge in its admission to the nuclear club. The United 
States must make clear that membership has responsibilities, as 
well as privileges. We ought to look very carefully at India's 
discharging of its responsibilities as a member of the club. 
Particular emphasis should be placed on the need for Indian 
cooperation in stopping illicit transfers and any AQ Khan-like 
activity, and providing support for the United States position 
on Iran. The United States should clarify the expectation that 
India will change its policy on the Iranian nuclear issue. We 
changed our policy about India, and now we need them to change 
their policy about nuclear security in the world, and it starts 
with Iran.
    Senator Chafee. Well, thank you.
    And maybe you've answered this already, but I'll ask. Dr. 
Perry, Dean Gallucci says that we should agree to this deal if 
India accepts a reasonably verifiable ban on the production of 
any more fissile material for nuclear weapons purposes. Why not 
make that part of the agreement?
    Dr. Perry. I'm very much in favor of India accepting that 
ban. A judgment call is that I would not make it part--a 
requirement for the agreement, because I think that would be a 
poison pill that would kill the agreement. I do think we should 
take on, as a vigorous diplomatic measure following the 
agreement, working with Iran to try to get--working with India 
to try to get such agreement.
    Senator Chafee. All right. Thank you.
    The Chairman. Thank you very much, Senator Chafee.
    Senator Obama.
    Senator Obama. Thank you very much, Mr. Chairman. Thank 
you, to the panelists. This has been extremely useful. I 
apologize that I missed some of the earlier presentations.
    I've said before, when Secretary Rice was here, that it 
strikes me that the geopolitics of this deal may make sense. In 
fact, I think they do. I think there are all sorts of reasons 
why we would want to strengthen our alliance with India. It 
strikes me that the details are not entirely where we want 
them. And, Secretary Perry, it sounded like that's your 
assessment of the agreement; Secretary Carter, it appears that 
is your assessment, as well. I just wanted to go over, again, 
what role you see the Senate playing, at this point, or--is it 
your judgment that we essentially have to hold our nose and 
vote up or down on this, or do you think that there are still 
modifications or improvements that can be made? And I address 
this to those who think that conceptually this makes sense.
    I'll have a separate question for you, Mr. Gallucci.
    Any of you.
    Dr. Carter. Senator, I'll start off.
    I am in favor of the Senate expressing very clearly what 
the United States expects from this arrangement.
    Senator Obama. Can you iterate those----
    Dr. Carter. Yes; absolutely. One I just named, which is 
help on Iran. There are a host of other ways in which India can 
be an activist and a leader in nonproliferation. India has 
historically been a detractor of the nonproliferation regime, 
and we should expect that they will do a 180 in their policy. 
We did a 180 in our policy toward India, and we should expect 
them to do the same.
    Preferential access for United States suppliers of nuclear 
and military materiel to India is likewise a fair part of the 
transaction. I can make a list--and my statement includes one--
of the expectations that the United States should have. We have 
given India a big quid in the nuclear front; we are now looking 
for geopolitical quos, as you aptly put it. I think these 
objectives should be spelled out quite clearly as the 
expectations of this country over time.
    Unfortunately, although India received its big payoff up 
front, it will be some time before we know if our objectives 
have been fulfilled. This is one of the ways in which, as I 
said, the deal was unbalanced. They get what we give them now, 
and we get what they give us--maybe--later.
    Senator Obama. Anyone else? Secretary Perry, you want to 
comment on that?
    Ambassador Gallucci. Senator, I appreciate you wanting to 
give me a pass on this, since I would have the Senate simply 
vote it down. But I guess I would say, as several people have 
pointed out, that there are apparently a number of ways you can 
go in the Senate, and the thought here is that, if you do 
proceed, that you wait to vote this up until you actually see 
the language of section 123, and you see what happens in the 
Nuclear Suppliers Group.
    Senator Obama. Go ahead.
    Dr. Perry. Senator Obama, I think the--as you said, the 
geopolitics rationale is not only a good reason, it's a 
powerful reason to go ahead with the agreement. I have 
expressed the concerns that Dr. Gallucci concerned about the 
weakness on nonproliferation aspects. It's my judgment--and 
it's different from Dr. Gallucci's judgment--on this point, 
though, it's my judgment that putting amendments on the 
agreement, requiring amendments for it, would not substantially 
fix that problem, but it would probably kill the agreement, and 
it would cause us to lose the geopolitical. For that reason, 
therefore, I do not favor crippling amendments.
    Senator Obama. OK.
    Doctor.
    Dr. Tellis. I'm very sympathetic to what Ash Carter said, 
but I feel uncomfortable with trying to secure those gains 
through legislative vehicles, because I think there is a way in 
which we can secure those objectives through a continuing 
conversation with India. They understand how the world works.
    Senator Obama. Right.
    Dr. Tellis. They understand what is it they need to do to 
keep United States engagement continuing. I think if you put it 
in legislation, what you end up doing is that you box them in, 
and then issues of national pride----
    Senator Obama. Right.
    Dr. Tellis [continuing]. Begin to cut in the way of 
rational choices.
    Senator Obama. Right.
    Mr. Chairman, if I could have the indulgence, I--I want to 
pick up on the question that Senator Hagel had asked. I mean, 
it strikes me that the nonproliferation regime has worked 
modestly well over the last number of years. I think, Secretary 
Carter, you put it well, those folks who are basically good 
actors on the international stage, they have to make a 
calculation: Is it worth weaponizing or not? There are enough 
carrots and enough sticks for them to make that decision not to 
go. If it's North Korea, they're going to make a different 
calculation. But they would have probably made that calculation 
anyway. So, net, this regime has been a plus.
    There is a concern, though, that--I think the norms that 
Dr. Gallucci talks about in his opening statement are being 
eroded, to some degree, by this. And as I understood Senator 
Hagel's question, it is: How do we prevent the exceptions from 
overwhelming the rule? How do we prevent a situation in which 
you start off with North Korea and Iran, and then India's 
thinking differently, and, after a while, what has been a 
useful regime starts fraying at the edges, to the point where 
it doesn't serve any useful function?
    So, I'm wondering--it may be that this particular agreement 
makes sense geopolitically, and we pursue it, but I'm 
wondering, for those who are supportive of the India agreement, 
what prevents further erosion of the nonproliferation regime 
over time?
    And, Dr. Gallucci, I assume that that's why you oppose the 
deal. But I haven't heard, sort of, a direct answer to: Are 
there modifications or ways of shoring up, or making, sort of, 
the reality match up with the norms that are out there? In 
other words, what changes to the nonproliferation regime should 
we be thinking about to make it more effective?
    One of the things in law, generally, is that if people are 
disregarding laws too often at a certain point it ends up 
almost being more damaging, it creates a disrespect for norms, 
generally, as opposed to that particular norm. So--please.
    Dr. Carter. May I, Senator? I think that is really the 
heart of the matter here, and that is whether the compromise of 
principle, which we unquestionably did in recognizing India, is 
a torpedo amidships to the norm as a whole. I believe that when 
you compromise one principle for another objective--in this 
case, strategic partnership with India--it matters a great deal 
how, to what extent, and why you compromised the principle.
    With respect to its damage to the NPT regime, the India 
deal cannot be considered a torpedo amidships. The deal 
reflects the United States position that India's 
nonproliferation behavior has been good, yet this clearly does 
not apply to Pakistan. Given AQ Khan, I would be exactly where 
Bob Gallucci is on this issue if anybody was even talking about 
striking a similar deal with Pakistan.
    The second difference between India and Pakistan is that 
India is a democracy that is apparently politically stable; 
Pakistan is not. India has made representations, which remain 
to be borne out, in fact, that it will truly turn from being a 
detractor of the nonproliferation regime to being a supporter. 
Dr. Perry has made the point that there are many ways that 
India can demonstrate its commitment to nonproliferation, and 
India has said it will oblige.
    India is hardly a rogue state. It is hardly an unstable 
state. It is hardly a state that has bad behavior, or, as near 
as we can tell, bad intentions. And, therefore, I would judge 
it's OK to compromise principle.
    Moreover, the view which I just expressed, appears to be 
shared by most of the other adherents to the NPT regime. I'd 
cite Mohamed ElBaradei, the IAEA director and Nobel laureate, 
who essentially came to the same judgment. I do not like to 
compromise principle, but, in the case of India, that is about 
the best case I can imagine.
    Ambassador Gallucci. Senator, you asked, specifically, what 
you could do to help the regime as you went ahead and did this 
for, as you said, geopolitical reasons. The proposition I've 
put forth is that you require that India produce no more 
material for nuclear weapons. If you went ahead and made that a 
provision of this deal, you would still be abandoning this 
principle. But you would have such a good case for having 
capped a nuclear weapons program, you could say that this was 
not going to do such damage to the regime.
    I disagree with Ash. I do think this is--``a torpedo 
amidships'' is the metaphor. I yield to no one in their 
enthusiasm for a reinvigorated strategic relationship with 
India. I do disagree that, for all time, United States-Indian 
relations will be limited and damaged by this. I think real 
damage will be done. I don't think what I'm proposing could be 
negotiated right now. I do believe the negotiators did the best 
they could with what they had to work with. But I do not think 
we are simply eroding the Non-Proliferation Treaty regime now. 
We are trashing it, in my view. When you use the phrase 
``geopolitical,'' it has a certain gravitas to it. And 
sometimes nonproliferation sounds a little ephemeral, and I 
want to give that a little gravitas, too. We are talking about 
a change in the character of the international system that 
would come about if this regime is trashed as a result of this, 
over time.
    Senator Obama. Although I--well, let me--I don't want to 
take up any more time.
    Dr. Tellis.
    Dr. Tellis. I think the only solution to the problem that 
you raise is a consensus among the international community that 
India is the exception, and will be treated as such. There 
would be real risks--and the risks that you highlight are 
certainly, you know, critical--but there would be real risks if 
the United States could both initiate and implement this 
agreement unilaterally, because then that would open the door 
for exactly the kind of fracturing that we all fear. On the 
other hand, if there is a process of consensus-building which 
is really what the whole exercise in the NSG is about, then 
what we could do is create a new norm, and the new norm is that 
India meets certain criteria, not simply in the vision of the 
United States, but the international community, more generally, 
and that becomes the bulwark that prevents the kind of 
fracturing that you refer to.
    Senator Obama. That's interesting.
    Thank you.
    The Chairman. Thank you very much, Senator Obama.
    Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    I'm concerned about Mr. Gallucci's concern about this 
agreement. Mr. Gallucci, do you think the agreement is going to 
torpedo efforts aimed at limiting the proliferation of nuclear 
weapons.
    About a month ago I was in Vienna, where I met with the 
International Atomic Energy Agency. The thing that impressed me 
was--and perhaps this is the reason the IAEA has come out in 
support of the India agreement--is that the IAEA has had an 
ongoing relationship with India. They have communicated back 
and forth on a lot of matters over the years, to the extent 
that the IAEA has had more communication with India than they 
have with some of the other countries that signed the NPT 
Treaty. They believe that by entering into this agreement, we 
will be moving the ball further down the field, making things 
better, rather than making them worse. How do you respond to 
that?
    Ambassador Gallucci. Senator, I'm going to be making some 
deductions here, because I actually haven't talked to Mr. 
ElBaradei or anybody from the Agency, so I can't really, based 
on experience, talk about motivation.
    But I think certainly that when the United States of 
America and India, two--one superpower and one very important 
power--propose to settle a nuclear issue, there is great 
incentive for the Agency to find a way to make this acceptable 
to them. So, in basic political terms--I don't mean to impugn 
their motivation--they may come to a different calculation. I'm 
sitting here with colleagues for whom I have the greatest 
respect, and we have come to different judgments. I don't think 
that I value the norm or the national security objective of 
preventing the spread of nuclear weapons any more than my 
colleagues at this table. All right? But we come to different 
conclusions here as you balance the regional objective against 
the global objective. And I think it's fair to do that. I do 
see it of greater damage here, and I do--to the 
nonproliferation objectives--than my colleagues. And I don't 
see as catastrophic an impact on United States-India relations, 
at least not as durable a one. I think, for a time, because of 
what the administration has done, there would be that negative 
impact. And I don't believe, as--I agree with them--that if you 
tinker at the margins with this deal, you may end up with the 
worst of all worlds, no deal and bad relations with India. So, 
I accept that. And I'm a realist about the damage this would do 
to United States-Indian relations, but I don't think it would 
be durable or catastrophic.
    The important things that India will do with the United 
States of America, it will do, not because we ship it uranium, 
but it will do because it's in India's interest. And whether we 
do this deal or not, over the long term, the real substance of 
United States-Indian relations will turn on the mutuality of 
interests of our two countries. So, I don't really buy that we 
have to do this, or it's all over for us in South Asia. I think 
that's an overstatement.
    I don't think it's an overstatement to say that we've had a 
very clear and consistent policy for decades, and we have a 
world that is defined in these terms by a very few number of 
nuclear weapons states. And I am very worried about tampering 
with that.
    Senator Voinovich. My other question involves the issue of 
whether this deal would send a signal to other nations who 
might want to have nuclear capacity. Do you think that this is 
going to set a precedent to cause those countries to say, 
``We're good people. We have democracies. And, therefore, we 
ought to be able to do what India has done and acquire a 
nuclear capacity''? Do you think that's going to happen?
    Ambassador Gallucci. No, Senator. I----
    Senator Voinovich. I mean to ask any of the witnesses.
    Ambassador Gallucci. Well, I'll--since I started, just let 
me say, briefly, no, I don't think that the next thing that 
will happen if--if this deal is approved on a Monday, I don't 
think, on Tuesday morning, in capitals around the world, they 
will all now reconsider their positions. I think, as 
calculations are made by either current governments or future 
governments, it will be important for these countries to know 
that it is no longer a matter of clear practice for the United 
States and the Nuclear Suppliers Group and the international 
community to consider there being only five legitimate nuclear 
weapons states, that now you can have six. And there's no 
reason, if good behavior is, in fact, the rationale, why you 
can't have 7 and 8--9 and 10.
    Senator Voinovich. Well, the other one was, out of the 
tent, and they had it, and the others haven't started to 
develop a nuclear capacity. You had a problem out there, and 
you had somebody outside. Now we're trying to bring them into 
it. And I guess I'd argue that's a good thing to do.
    The last point is the relationship of this agreement to 
China. I was at an Aspen Institute 3-day session, and there was 
concern among the Chinese about this agreement. The Chinese 
were asking, ``Where are we--what are we doing, in terms of 
India''? My feeling is that we've been long overdue, in terms 
of bettering our relationship with India. We're moving down 
that track, with this agreement. And that's good. But do you 
think that our agreement will change China's attitude toward 
nuclear proliferation? Is China going to be doing something a 
year from now that they wouldn't have done if we didn't enter 
into this agreement with India?
    Mr. Perry.
    Dr. Perry. I think what would cause China to alter their 
view on what they're doing in the nuclear program would be not 
this agreement, but actions that India might take. If India 
actually proceeded with a significant buildup of their nuclear 
capability, then that would alter China's view. I do not expect 
that to happen. And I do not think this agreement would 
facilitate it happening. That could have happened in the 
absence of the agreement. So, I do not think the agreement 
itself is going to have that effect.
    Senator Voinovich. Mr. Carter.
    Dr. Carter. Senator, there is one geopolitical reason for 
the United States to foster better relations with India, and it 
does have to do with China. This is very difficult for both the 
administration and the Indians to talk about, but the fact of 
the matter is, we don't know where destiny is going to take 
China. I am not a pessimist about that, but we do not know 
whether China will be a responsible stakeholder, as Bob 
Zoellick would say, or whether a new generation of Chinese 
leaders, Chinese nationalism, a dustup with us over Taiwan, or 
something else will create the outcome for our relations with 
China that neither side wants, which is one of contention.
    Should future conflict with China occur, there is no 
question that we would benefit from having India as another 
counterweight to China in Asia. That's not a benefit of the 
deal that I ever wish to harvest, but it is a consideration.
    Dr. Tellis. I think all three countries--the United States, 
India, and China--are involved in a delicate hedging game at 
the moment, and they are hedging precisely because of the 
reason that Ash alluded to. We don't know what the future 
holds.
    One of the ironies of this relationship is that it might 
actually lead to Sino-Indian rapprochement--not complete 
rapprochement, but, at least, a closening of Sino-Indian ties--
because one of the things that the Chinese are concerned about 
in this relationship is that it might pull India even more 
permanently and durably into the orbit of American friendship. 
And so, you can see this in a whole range of issue areas in the 
bilateral Sino-Indian relationship, where China has actually 
watched India's gradual closening to the United States with a 
certain degree of alarm, but also as a sense of opportunity for 
them to change course with respect to their own bilateral 
relations with New Delhi.
    Senator Voinovich. Thank you.
    The Chairman. Thank you very much, Senator Voinovich.
    Senator Allen.
    Senator Allen. Thank you, Mr. Chairman. And thank all of 
our witnesses for your insights.
    I'd like to take a wider view of all of this. And I will 
say, at the outset, Dr. Tellis, I appreciate your very frank 
answer to Senator Voinovich's question, which is true. And I 
associate myself with your insights on this, just so you all 
know where I'm coming from.
    The issue on energy--talking about how this matters and 
what amount it will be, nuclear versus clean-coal technology 
and so forth. Having been in India just last Thanksgiving, and 
meeting with the India Institutes of Technology folks, the 
economic developers in Karnataka and Bangalore, as well as 
Prime Minister Singh, it is clear how important this was to 
them. India is an even more energy-dependent country than we 
are. Right now we're paying these high gasoline prices. Some of 
it, obviously, is because of the world demand for oil and 
growing economies in Central Europe, India, and China. And even 
if production of oil in the world increases, the demand is also 
increasing. And so, there are a lot of things we need to do. We 
need to be more efficient, use the advancements in 
nanotechnology for lighter, stronger materials, maybe lithium-
ion batteries, solar photovoltaics. We need the diversity of 
fuels. Not any one fuel will power our economy.
    Another area of cooperation with India will be, I believe, 
in biofuels. Their rural areas are impoverished. The rural 
areas, and it's amazing to me how many large areas of that 
country--a prospering, growing country, but with heartbreaking 
poverty--how many areas have no electricity at all. And 
nuclear's going to be part of it. Clean-coal technology needs 
to be part of it; and nuclear, as well.
    I actually think, long term for the world, there's going to 
be more and more countries that are going to want to use 
civilian nuclear power. I think we actually ought to learn a 
few things from others, whether it's chemical separation or 
reprocessing, which is a much less dangerous, more efficient 
way of handling it, or maybe concepts such as thorium added to 
the uranium in the beginning, so that it cannot be made into a 
weapons-grade uranium. This is going to be a challenge, I 
think, around the world. Brazil, of course, has biofuels, but 
there's going to be other countries that are going to want to 
go to nuclear.
    The point of the matter, though, is that India needs 
nuclear power. Even their natural gas, they ship it in, mostly 
liquified natural gas--an option, but not as good as a pipeline 
of natural gas. So, this is going to be necessary for them.
    Let's recognize that India, the world's largest democracy, 
share the same values. It is a country of diversity. There is 
religious tolerance. There's freedom of religion. Large groups 
of different religions, and they're not at each other's necks. 
We share, it appears to me, the same goals for Asia, which is 
peace. And so, I think this is an important strategic 
partnership of countries that have basically the same sort of 
postulates, or pillars of a free and just society. And so, 
that's the wider picture that you mentioned, Mr. Carter.
    Now, the question is: How are we going to deal with Iran or 
other countries? I think it's very easy to distinguish India 
and Iran, to be honest with you, Dean, and that is, no one 
considers India a state sponsor of terror. The world recognizes 
Iran as a state sponsor of terror. While India and Pakistan 
have not had the greatest relations, they haven't said, ``We're 
going to wipe Pakistan off the map,'' as Iran has to Israel.
    The proliferation into Iran on arms, some from India, but 
not nuclear. The Russians are making money off of this deal, 
and the Chinese. So, I think it's pretty easy, if you want to 
look at someone's past record of performance compared to other 
countries that may want nuclear weapons, India has an 
outstanding record. And that's how I would, personally, easily 
distinguish it.
    The question here is, with all these advantages--
economically, diplomatically, a strategic partner--and India's 
just a model, I think, for other countries, in many respects--
and while this may not be a perfect deal, and India may have 
gotten, in some aspects of it, the better of it; in other 
parts, we might have gotten the better--you know, that's where 
we are. And I'm glad to hear you all say, ``Well, gosh, to 
start tinkering and fouling it all up will be even more 
disastrous, and it wouldn't happen.'' But wouldn't you also say 
it's actually positive, in that India has been now brought into 
the global nuclear mainstream? It's clearly increasing the 
transparency of what they're doing. There is now oversight of, 
at least, their civilian nuclear capabilities. And, in fact, 
the aspect of this being permanent, isn't that a positive that 
we didn't have before, even if there might have been some 
tweaking and more concessions we might could have obtained from 
it?
    So, would you not think that having India under the 
International Atomic Energy Agency safeguards a positive? I'll 
ask you, Mr. Carter, since you take the widest view, in your 
own words.
    Dr. Carter. I think it is positive, but I think it remains 
to be seen whether the big benefits from India on the nuclear 
front will be realized. I do not think they come so much from 
India submitting certain facilities to the IAEA, although these 
are important steps. The key is whether India really does 
constrain its own behavior, not because we constrain it 
technically, but because it realizes that it is not a good 
thing for it to build more and cause others to build more. 
We'll see whether India puts its shoulder to the wheel with us 
against Iran. We'll see whether India stops talking about the 
NPT as an unfair thing, and starts talking about it as an 
indispensable thing.
    I hope all that occurs. I would be opposing this deal if I 
thought that that wasn't going to occur, that India was lying 
to us, or that India was not inclined to meet our expectations. 
But the fact of the matter is, it remains to be seen.
    Senator Allen. Yes. Dean Gallucci.
    Dr. Carter. If I may also--I apologize, Mr. Chairman and 
Senator Allen--excuse myself. I have to depart.
    The Chairman. We understand. And we thank you very much for 
your testimony.
    Dr. Carter. Thank you. I've enjoyed being here, and 
appreciate the honor of being here.
    Senator Allen. Great having you.
    Ambassador Gallucci. Senator, I just briefly wanted to say 
that everything you said at the front part of your statement, I 
think is exactly right, about the importance of India. And I do 
not dissent from any of that.
    But I really was enthusiastic about coming here today, 
because I really think it's important that we not have an image 
here of accomplishing something we're not accomplishing. We are 
not bringing India into the regime. We're not bringing India 
into the tent. We are building a new tent. We're not trading 
them into the arrangement, which I think has worked so well; 
we're changing that arrangement. And I just beg you all, as you 
do this--and you may decide to do this--and my colleagues here 
next to me think it's worth doing because of how important 
India is. OK, I think that's a mistake, but at least I think we 
should be clear, this is not drawing India into the safeguards 
regime.
    For me, I take a dimmer view, even than my colleague Ash 
does, of having India submit some reactors for safeguards. To 
me, that is a distraction. Those inspectors should go someplace 
else. Maybe Iran, for example. Because I agree entirely, that's 
a problem. I don't want to see the inspectors doing that, 
particularly not when they have the other facilities in India 
producing plutonium for nuclear weapons. It's not a 
demonstration of their willingness to modify or accept a 
compromise in their sovereignty, as other states do that accept 
full-scope safeguards. They're not doing that. So, I would 
encourage you----
    Senator Allen. You don't think--go ahead.
    Ambassador Gallucci. I'm sorry.
    Senator Allen. Dean, do you not think that, insofar as 
their civilian nuclear, they will not be in compliance with 
international safeguards?
    Ambassador Gallucci. No----
    Senator Allen. I understand, on the military side. But on 
the civilian side?
    Ambassador Gallucci. The problem, Senator, is that they 
had--before this--well, they have, now, some reactors--and I 
think probably about six or so--that were subject to 
international safeguards, because they were supplied by 
countries under agreements that required that safeguards be 
applied. And then they have other facilities that they built. 
Some of those facilities, they use for energy. Some are--and 
some are used for energy, and the plutonium that's derived is 
used to make weapons. What they are doing in this deal is 
increasing the number of reactors that would be subject to 
international safeguards. They pick the reactors, and they 
leave the other ones out, so they can continue building nuclear 
weapons.
    I don't see this as a plus for the nonproliferation regime, 
adding these reactors. It is a gesture, but I think it's an 
empty one. I really do believe the international community, and 
everybody who understands anything about the way one builds 
nuclear weapons understands--that this really doesn't do 
anything, in terms of the regime, substantively. To me, it's an 
empty gesture. But, again, please, if you look at this deal and 
say that--and believe that this is so essential for our 
relationship with India, and you decide we must do it--all I'm 
saying is, please recognize the sacrifice you're making to the 
regime. I can't see this as a plus for the nonproliferation 
regime. I can see it as doing damage. And I'd, therefore, on 
balance, come out in a different position.
    Thank you.
    Senator Allen. Dr. Tellis.
    Dr. Tellis. I think the distinction is between bringing 
India into the treaty and bringing India into the regime. I do 
not think this agreement brings India into the treaty, but it 
certainly brings India into the regime. And it brings India 
into the regime not merely because it brings some reactors 
under safeguards, but because it now takes on regime 
obligations primarily with respect to the diffusion of nuclear 
technology to third parties. That is the real benefit of this 
agreement.
    I agree with Ambassador Gallucci. I mean, one can have a 
discussion about whether a few reactors here or there make a 
difference. My own view is that having more reactors is better 
for all concerned, compared to having less. But the real 
benefits, for me, are that India now takes on regime 
obligations with respect to export controls in ways that are 
verifiable, in ways that are durable, and which involve 
obligations that actually go beyond those taken by NPT 
signatories.
    India--people forget that India, today, has tremendous 
technical competence in more than one fuel cycle. If there were 
no such agreement, the only obligation that would prevent India 
from diffusing this technology are the voluntary obligations 
that India takes, which are entirely reversible at a future 
point in time.
    What this agreement does is that it binds India 
permanently, through a set of international agreements--not 
simply with the United States, but with the IAEA, with the 
NSG--into adopting a set of norms that not only advance India's 
interests--of course they do--but advance our own and the 
interests of the international community, especially the 
nonnuclear weapons states.
    Senator Allen. Thank you.
    The Chairman. Thank you very much.
    Senator Allen. Thank you, Mr. Chairman. Thank you, 
gentlemen, unless--Mr. Perry, I--you don't need to say 
anything, unless you have something to add to it.
    Dr. Perry. I would have made the same point that Dr. Tellis 
did.
    Senator Allen. Thank----
    Dr. Perry. I would have made the same point that Dr. Tellis 
already made.
    Senator Allen. Thank you, Mr. Ambassador.
    The Chairman. Well, I thank each one of you very much for 
your testimony. We thank you for your responses to our 
questions. And we look forward to staying in touch.
    Thank you.
    The Chair would like to call, now, the second panel, to be 
Dr. Lehman, Dr. Einhorn, Dr. Milhollin, and Dr. Cohen.
    [Pause.]
    The Chairman. Gentlemen, thank you very much for your 
patience this morning. We've had good dialog, and we look 
forward to another important set of testimonies from each of 
you.
    I'm going to ask you to testify in the order in which I 
introduced you. And that would be, first of all, Dr. Lehman, to 
be followed by Dr. Einhorn, Dr. Milhollin, and Dr. Cohen.
    Your full statements will be made a part of the record. And 
if you would summarize, why, we would be pleased.
    Dr. Lehman.

  STATEMENT OF HON. RONALD F. LEHMAN II, DIRECTOR, CENTER FOR 
     GLOBAL SECURITY RESEARCH, LAWRENCE LIVERMORE NATIONAL 
                   LABORATORY, LIVERMORE, CA

    Dr. Lehman. Mr. Chairman, you've already had to listen to 
four very distinguished friends of ours, and there's three very 
good friends to come, so I will be exceedingly brief.
    It won't surprise you that the heart of my position is that 
the--nonproliferation should not only be integral, it should be 
central to our strategic partnership with India. It should not 
be viewed as a tradeoff, but, rather, we should have net 
benefit in nonproliferation from this endeavor. And I think the 
Senate should make it clear that that ought to be a key purpose 
of the strategic partnership.
    My own view has been that engaging India on civil nuclear 
cooperation as a part of our nonproliferation strategy is long 
overdue. Only by bringing India into the broader 
nonproliferation regime can we strengthen our efforts to combat 
WMD and create the conditions under which India can shoulder 
the responsibilities that are expected of leading countries 
with advanced nuclear technology. But there are challenges, and 
there are risks.
    The nonproliferation regime has long been under stress 
because of the spread of dual-use technology, too much 
insistence on one-size-fits-all solutions for very different 
circumstances, an inability to work with the nonparties to the 
NPT, and the failure to enforce compliance. For 14 years, North 
Korea has developed nuclear weapons, after being discovered 
secretly working on fissile-material production, in violation 
of the NPT. And now, Iran is following the same path.
    India could do much to help within its borders, in South 
Asia, in other troubled regions, in international fora, and 
around the globe. But working with India will not be easy. Over 
many years, I have learned that India is a country that has 
difficulty taking yes for an answer; in part, because domestic 
and regional politics are filled with spoilers.
    In the short run, frustration and disappointment will be 
common. But if the momentum of the joint statement can be 
sustained, the long-run achievements can be significant.
    Reasonable people can disagree over what we can achieve and 
when we can achieve it. If momentum created by the joint 
statement collapses, however, we will not return to the status 
quo ante. United States-Indian cooperation will be set back, 
but, also, the weaknesses in the existing nonproliferation 
regime will be stressed even more.
    To keep the momentum going, the administration has proposed 
legislation, S. 2429, that seeks to record the principles of a 
bipartisan consensus between the executive branch and the 
Congress and establish more routine procedures so as to 
minimize corrosive developments and counterproductive delays at 
home and abroad.
    Everyone here understands that easing the procedural 
requirements can have an effect on substance. For that reason, 
it is all the more important that the Congress have a clear 
understanding with the executive branch as to what the general 
goals and conditions are for permitting nuclear trade with 
India to begin and to continue. Congress must make clear that 
it will review, periodically, the Indo-U.S. strategic 
partnership, especially its nonproliferation components, and 
that failure to meet the conditions at any time in the future 
would require that civil nuclear and other cooperation be 
revisited. Congress can also help ensure that a sufficiently 
ambitious and updated agenda is a part of the partnership.
    Most important achievements, such as a fissile-material 
cutoff, will take time under any circumstances. To demand now, 
as a precondition, a unilateral freeze by India without China 
and Pakistan would bring important cooperation to a stop. 
Including China, Pakistan, and others will take time, so the 
sooner we get on with the requirements for civil nuclear 
cooperation, the sooner we can have concrete engagement on 
these issues.
    As I have explained elsewhere, we need not wait for the 
conclusion of the FMCT and the Conference on Disarmament to 
begin to engage on fissile material. We will want to work with 
Indian policymakers and technical experts on best practices for 
safety and security. And this could lead naturally to joint 
approaches to material protection control and accountability, 
which, in turn, could lead to interim approaches to fissile 
material restraint on the way to the FMCT, perhaps involving 
other countries with advanced nuclear technology, such as those 
involved in Generation IV in ITER.
    To promote our nonproliferation goals, we need embedded 
engagement with India, rolling up our sleeves and working 
closely together in areas such as export control, detection, 
interdiction, transparency, material security, diplomatic 
strategies, and the like. PSI and U.N. Security Council 
Resolution 1540 offer important vehicles.
    But I might say that we have had discussion here today that 
says, on the one hand, ``India has a good record, and it's now 
passed all of this legislation,'' and, on the other hand, 
``We're hoping that they will implement some of these 
objectives under, for example, U.N. Security Council Resolution 
1540.'' That's all good.
    But the reality is, in a world in which nuclear technology 
is widespread, and where arbitrary categories of whose nuclear 
``this'' and whose nuclear weapons state ``that'' are very 
misleading. They have their legal importance, they have their 
political importance, but the reality is, we have to deal with 
the spread of capability and the management of intent. And that 
requires that we work closely together in implementation.
    In short, keeping the momentum begun by the July 18 joint 
statement is essential to achieve our nonproliferation goals, 
but the Congress should also insist on clarity of purpose and 
commit itself to ongoing oversight. Again, the successful 
execution of the partnership, over time, must be the measure of 
merit, not the initial ceremonies or even this enabling 
legislation.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Lehman follows:]

 Prepared Statement of Hon. Ronald F. Lehman II, Director, Center for 
   Global Security Research, Lawrence Livermore National Laboratory, 
                             Livermore, CA

    Mr. Chairman, members of the committee: In November of last year, 
the committee asked me to join in its consideration of the July 18, 
2005 Joint Statement of President George W. Bush and Prime Minister 
Manmohan Singh on civil nuclear cooperation. You have that testimony 
before you. Today's hearing considers the strategic and 
nonproliferation implications of the Joint Statement in the context of 
S. 2429, legislation to advance that agreement.
    In the last six months, intense negotiations have taken place. 
Uncertainty still exists and warrants caution, but both sides have 
taken steps and made clarifications. Nothing has become known, however, 
that would cause me to change my basic conclusions and concerns, which 
again are my personal views. Let me briefly recall that analysis:

          The Joint Statement is an historic milestone for 
        nonproliferation that creates both great opportunity and great 
        risk. It creates an opportunity to strengthen a nuclear 
        nonproliferation regime that is suffering from its own internal 
        weaknesses such as inadequate enforcement, the threat of 
        breakout once an advanced nuclear capability has been achieved, 
        and an inability to engage effectively the non-parties to the 
        NPT. Because the terms of the Joint Statement, however, also 
        spotlight those weaknesses, mishandling of the implementation 
        of its terms can have adverse consequences even when the best 
        of intentions are involved.
          * * * * *
          If the basic approach contained in the Joint Statement 
        collapses, we will not return to the status quo ante. U.S.-
        Indian cooperation will be set back, but also the weaknesses in 
        the existing regime will be exposed to even greater pressure. 
        Bringing India into a more comprehensive regime of 
        nonproliferation and restraint, however, could significantly 
        enhance our ability to reduce the dangers associated with 
        weapons of mass destruction. Congress can help insure that this 
        is a sufficiently ambitious agenda. India could do much to help 
        within its borders, in South Asia, in other troubled regions, 
        and globally.
          * * * * *
          I would urge the Congress to focus on the dynamics of the 
        process and the goals to be achieved as a result of the U.S.-
        India Joint Statement rather than attempting to rearrange the 
        pieces of the initial package. Much that one might have 
        detailed in the original package may be more successfully 
        achieved by driving subsequent interactions in the right 
        direction. This can only be done, I believe, if 
        nonproliferation is a centerpiece of strategic engagement 
        rather than a trade-off. It is best achieved by retaining a 
        viable Nuclear Non-Proliferation Treaty at the core of a 
        broader nonproliferation regime that uses more targeted, 
        embedded engagement to address the fundamental causes and 
        conditions of proliferation. In short, widely shared goals 
        should guide our actions, but implementation will fail if a 
        ``one size fits all'' mentality is applied rigidly to different 
        circumstances.

    The legislation before you is intended to support these goals by 
memorializing the principles for a bi-partisan consensus between both 
executive and legislative branches that can provide a stable basis over 
time for both India and the United States to work together. Such 
cohesion and clarity of purpose, as the United States engages India, 
would be very valuable, particularly in support of our nonproliferation 
efforts.
    That is not the same as saying that partnership with India will be 
easy. My own view is that the road ahead with India will be rocky, 
certainly when measured against the current euphoria about India even 
among those who have concerns about civil nuclear cooperation. The 
overselling of the new relationship today by many will become more 
obvious in the near term, but in the long term, common interests and 
steady foreign policy could result in achieving or exceeding 
expectations. This is not a certain outcome, however.
    At the same time, many of the concerns about the strategic 
partnership's impact on nonproliferation are also overstated or 
manageable. Too often the friends of the NPT act as if they are 
rearranging the deck chairs of what their rhetoric describes as a 
sinking nonproliferation ``Titanic.'' The nuclear nonproliferation 
regime is under stress, but the Indo-U.S. Civil Nuclear Cooperation 
Agreement did not put it there. Indeed, the agreement offers an 
opportunity to strengthen the regime through partnership with India, 
especially if India calls a truce in its more than thirty years 
guerrilla war against the NPT. Real nonproliferation needs real, 
embedded engagement. Again, the successful execution of the partnership 
over time must be the measure of merit, not the initial ceremonies or 
even enabling legislation.
    It is right to take the time now to codify clear nonproliferation 
commitments that will guide the strategic partnership, but, in the 
future, we must also insure that the parties live up to those 
commitments and adjust to new challenges. We must not let time erode 
the emphasis on nonproliferation that should be integral to the Indo-
U.S. relationship. This legislation can be consistent with that 
approach, but changing circumstances could also undermine our clarity 
of purpose over time, particularly in nonproliferation. In the early 
1990s erosion of purpose perhaps fatally damaged our nonproliferation 
prospects and achievements with respect to North Korea, and one sees 
similar developments emerging on Iran among allies, friends, and non-
governmental organizations. In this age of rapidly advancing 
technology, time is not always on the side of nonproliferation.
    S. 2429 gives emphasis to the nonproliferation objectives of the 
new Indo-U.S. partnership. It conditions civil nuclear cooperation on 
the President's determination that India:

   Has provided the US and the IAEA a credible plan to separate 
        its civil and military facilities;
   Has an IAEA safeguards agreement in force;
   Is making progress with the IAEA ``toward implementing'' an 
        Additional Protocol;
   ``Is working with the United States for the conclusion of a 
        multilateral Fissile Material Cut-off Treaty'';
   ``Is supporting international efforts to prevent the spread 
        of enrichment and reprocessing technology'';
   Is securing nuclear materials and technology through export 
        controls and adherence to the Missile Technology Control Regime 
        and the Nuclear Suppliers Group guidelines; and
   The Section 123 Agreement between the U.S. and India is 
        consistent with U.S. ``participation in the Nuclear Suppliers 
        Group.''

    An eighth condition is dealt with separately, differently, and more 
emphatically; namely that India not ``have detonated a nuclear 
explosive device after the date of enactment.''
    All of these are important conditions, not only when we begin going 
down this path of partnership, but also in the years ahead. The 
Executive Branch seems legitimately concerned that an annual process of 
determinations and legislative enactment would be corrosive and 
counterproductive over time in the real world of political give and 
take at home and abroad. That view is not wrong.

    The Chairman. Thank you very much, Secretary Lehman.
    Dr. Einhorn.

     STATEMENT OF HON. ROBERT J. EINHORN, SENIOR ADVISER, 
   INTERNATIONAL SECURITY PROGRAM, CENTER FOR STRATEGIC AND 
             INTERNATIONAL STUDIES, WASHINGTON, DC

    Mr. Einhorn. Mr. Chairman, thank you for giving me the 
opportunity to testify this morning.
    In seeking a special exception for India, I believe the 
administration is running some serious risks, in terms of our 
nonproliferation objectives. The United States is seen as 
bending the rules when they no longer suit us, and the 
administration is seen as giving nonproliferation a back seat 
relative to other foreign policy and even commercial 
considerations. Other countries can be expected to follow our 
lead. Indeed, they already are.
    Russia recently jumped the gun and delivered a large 
shipment of enriched fuel to India, even before the Nuclear 
Suppliers Group had changed the rules to allow such a shipment. 
I think this is just emblematic of what we're going to see.
    There have been discussions between China and Pakistan on, 
perhaps, purchase of four or six additional reactors by 
Pakistan. It's not clear whether such a purchase would be in 
the context of the Nuclear Suppliers' rules or outside that 
context. It's hard to imagine that the Russians would have made 
this transfer of fuel without the precedent having been 
established of the United States-India deal.
    In the future--and I agree with comments by Bob Gallucci 
earlier--countries considering whether to go nuclear are going 
to see lower costs if they decided to proceed in that 
direction. And I think that's very unfortunate.
    Now, such risks might have been offset, or at least 
minimized, if the Bush administration and India had agreed to 
steps that, on balance, would have made the deal a net 
nonproliferation gain. Unfortunately, I don't think this was 
the case.
    The actions pledged by India in the nuclear deal were 
mainly reaffirmations of existing commitments, codifications of 
sound Indian practices, or measures India was already planning 
to take before the deal was reached. Where the deal breaks new 
ground was India's acceptance of IAEA safeguards at eight 
indigenously built nuclear reactors. But, as long as India 
insists on keeping substantial fissile-material production 
capacity outside safeguards, I think this gain is really only 
symbolic.
    Now, the aspect of the nuclear deal that involves the 
greatest risk, and the one where there's the greatest potential 
from turning the deal from a net loss to a net nonproliferation 
gain is the area of fissile-material production. As it now 
stands, the deal would help India dramatically increase its 
stocks of bomb-grade material. If existing nonproliferation 
restrictions are lifted, India could import uranium for its 
expanding civil program, and free up domestic uranium supplies 
for weapons purposes. It would be a windfall gain for India's 
nuclear weapons program.
    The administration made an attempt to constrain fissile-
material production by proposing that most Indian nuclear 
reactors be placed under IAEA safeguards. India rejected that 
proposal and insisted on keeping eight current or planned 
reactors outside of safeguards and on deciding entirely on its 
own which future reactors to put under safeguards.
    Now, of course, India will not devote all of its 
unsafeguarded reactors to plutonium production. Most of India's 
reactors will be used to generate electricity. But even if only 
one or two large reactors were used as bomb factories, India 
could produce enough plutonium for well over 50 or more nuclear 
weapons each year.
    Now, why should we care about India's production of fissile 
material? After all, India is a friend. It's a responsible 
nuclear power. We can't imagine a scenario in which Indian 
nuclear weapons would be used against the United States. One 
reason we should care is that, especially after 9/11, we have a 
vital interest in limiting the availability of bombmaking 
materials around the world and preventing such materials from 
falling into the hands of terrorists.
    If India steps up production--and India ramping up 
production is certainly a possibility under this agreement--
then it's very likely, I think, that Pakistan will follow suit, 
and China could decide to resume production, and other 
countries might be encouraged to seek their own production 
capabilities. The more materials produced, the more difficult 
and costly it will be to secure those materials, and the 
greater the risks of nuclear terrorism.
    Another reason we should care is that increased fissile 
material and nuclear weapons production could lead to increased 
tensions and a destabilizing arms competition in southern Asia 
involving India, Pakistan, and China. Pakistani authorities 
have already suggested that they may need to adjust their 
strategic programs to account for the implications of this 
deal.
    What can the Congress do, at this stage, to strengthen the 
nuclear deal and minimize the risks to the global 
nonproliferation regime? Now, the committee will be 
deliberating on various steps that the Congress might take, but 
I'd like to focus on just one. The Congress should make the 
United States-India deal a catalyst for curbing, or even 
capping, the worldwide buildup of fissile material. In 
particular, it should permit nuclear cooperation with India to 
proceed only when India stops producing fissile material for 
nuclear weapons, unilaterally pursuant to a multilateral 
moratorium, or pursuant to a multilateral fissile-material 
cutoff treaty. India has rejected the Bush administration's 
proposal that it unilaterally halt the production of fissile 
material. Under the approach I'm suggesting, participation in a 
multilateral measure that includes Pakistan and China would 
make India eligible for nuclear cooperation. I agree with Ron 
Lehman, who just mentioned that expecting India to do this 
unilaterally is simply not realistic.
    Now, India has long supported a multilateral fissile 
material cutoff treaty. Indeed, in last July's joint statement 
India pledged to work with the United States to achieve an 
FMCT. Now, if this is a sincere commitment and not just another 
throwaway line, agreement among the key powers should be 
possible in a reasonably short period of time. Pakistan's 
participation would be crucial, but, with none of the five 
original nuclear powers still producing fissile material for 
weapons, it should be possible to bring Pakistan onboard if the 
United States and India and the other nuclear powers work 
resolutely toward this end.
    Since its May 1998 nuclear tests, India has often stated 
that its strategic requirements are not open-ended, and that it 
doesn't seek nuclear parity with China or any other country. 
Instead, it's maintained that it requires only what it calls a 
credible minimum deterrent capability. If that remains the 
case, perhaps it will soon be ready to decide that it has 
enough fissile material for its deterrence needs.
    Would linking nuclear cooperation to stopping fissile 
material production be a deal-breaker? I'm sure this is a 
question that's on the minds of members of this committee. Put 
another way: Would the Indians walk away from the benefits of 
the deal, including the ability to buy uranium on the world 
market and acceptance as a nuclear weapons state in all 
consequential respects, because the United States asked them to 
do something they are already committed to do? I don't know the 
answer to that question. And we won't know it until the issue 
is explored seriously with the Indian Government. But the right 
question to ask is not whether a particular approach is a deal-
breaker, it's whether the approach serves U.S. interests.
    At this stage, it's up to the committee and to the U.S. 
Congress to adopt an approach that strikes the right balance, 
that promotes the U.S. interest in a strong partnership with 
India, as well as the vital U.S. interest in preventing nuclear 
proliferation and nuclear terrorism. We shouldn't have to 
pursue one at the expense of the other.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Einhorn follows:]

     Prepared Statement of Hon. Robert J. Einhorn, Senior Adviser, 
International Security Program, Center for Strategic and International 
                        Studies, Washington, DC

    Mr. Chairman, thank you for the opportunity to testify before the 
committee on the nonproliferation implications of the U.S.-India 
agreement on civil nuclear cooperation.
    The argument for overcoming the nuclear impasse with India--for 
altering the nuclear status quo that cut India off from international 
civil nuclear cooperation for over 30 years--has become increasingly 
persuasive. It has been clear for many years that maintaining existing 
U.S. laws and Nuclear Suppliers Group (NSG) guidelines prohibiting such 
cooperation would not succeed in inducing New Delhi to join the NPT or 
give up nuclear weapons. And as the Bush administration has argued, 
modifying those laws and guidelines for India could give a boost to 
U.S. relations with a rising democratic world power and assist in 
addressing India's growing energy needs.
    The dilemma we now face is how to achieve the benefits of changing 
the rules without undermining the vital U.S. interest of preventing the 
proliferation of nuclear weapons. How, for example, can the United 
States seek exceptions to the rules for India without opening the door 
to exceptions in less worthy cases--indeed, without weakening the 
overall fabric of rules the U.S. worked so hard to create? How would 
U.S. allies and friends who had to choose between nuclear weapons and 
civil nuclear cooperation (and who made what the U.S. regarded as the 
right choice) view giving India the opportunity to have its cake and 
eat it too? How can we avoid conveying the impression to countries 
contemplating the nuclear option in the future that, if they opted for 
nuclear weapons, the world would eventually accept them into the 
nuclear club?
    Given the inevitable nonproliferation risks involved in reversing 
three decades of U.S. law and multilateral policy to permit nuclear 
cooperation with India, it is essential that such a major shift be 
accompanied by Indian steps that, on balance, strengthen the 
nonproliferation regime. Moreover, a policy departure of such magnitude 
should be preceded by thorough discussions with the Congress and key 
international partners to ensure they are comfortable with the 
initiative and share the view that it does not undercut 
nonproliferation interests.
    But the U.S.-India civil nuclear cooperation deal negotiated by the 
Bush administration doesn't meet those requirements. In the 
administration's eagerness for a foreign policy success, the deal was 
concluded in great haste, driven by the calendar of Bush-Singh meetings 
rather than by the seriousness and complexity of the task at hand. Key 
stakeholders in the U.S. Congress and the 45-nation Nuclear Suppliers 
Group (NSG) were not consulted in advance. While speed and exclusivity 
are often necessary to overcome bureaucratic and international 
resistance to major initiatives, this must be balanced against the need 
for buy-in, especially when the success of the initiative depends on 
approval by both the Congress and NSG. In its desire to show boldness 
and demonstrate a clean break with the past, the administration gave 
too little weight to the nonproliferation downsides and too much weight 
to proving to the Indians its dedication to building a qualitatively 
new relationship. In the process, it failed to use the leverage 
available to it to achieve U.S. objectives.
    As a result, the deal outlined in the Joint Statement concluded 
when Prime Minister Singh visited Washington last July, and further 
elaborated on March 2nd when President Bush was in Delhi, gave the 
Indians virtually all that they wanted--the ability to acquire nuclear 
equipment and technology and desperately needed uranium on the world 
market, acceptance as a nuclear weapon state in all consequential 
respects, and complete freedom to continue and expand production of 
fissile material for nuclear weapons. What the U.S. got from the deal 
was, for the most part, speculative--the hope that a stronger 
partnership with India will pay strategic dividends down the road.
                benefits for nonproliferation are modest
    Recognizing that much of the criticism of the civil nuclear deal 
would be based on its implications for nonproliferation, the 
administration has made a special effort to show that the deal 
strengthens the global nonproliferation regime. But the arguments are 
not very convincing.
    Several of the steps promised by India are simply reaffirmations of 
existing commitments, including its pledges to continue its unilateral 
moratorium on nuclear weapons testing, strengthen its national system 
of export controls, and work toward the conclusion of a multilateral 
fissile material cutoff treaty. Some other steps--including adherence 
to the guidelines of the NSG and the Missile Technology Control 
Regime--were actions India was already planning to take before the July 
18 th Joint Statement as part of a U.S.-Indian dialogue on technology 
transfer and export control. Still others--such as the promise to 
refrain from transferring enrichment and reprocessing technologies to 
countries that do not yet possess them--were codifications of existing 
Indian policies and practices.
    The potentially significant new development was India's commitment 
in July to separate civilian and military nuclear facilities and put 
the civilian facilities under International Atomic Energy Agency (IAEA) 
safeguards, thereby placing them off-limits for the production of 
plutonium for India's nuclear weapons program. But the separation plan 
insisted upon by India's nuclear establishment, backed by Prime 
Minister Singh, and accepted by President Bush in March would put only 
14 of 22 existing or planned nuclear power reactors under safeguards 
(including the six imported reactors India has no choice but to put 
under safeguards) and would allow New Delhi to decide entirely on its 
own which future reactors it wished to designate as civilian and submit 
to safeguards.
    The administration has trumpeted as a major nonproliferation gain 
that India will have 65 percent of its thermal reactors under 
safeguards. As a gesture of support for the IAEA's safeguards system, 
India's putting eight more reactors under safeguards than it would 
otherwise be obliged to do is welcome. But strategically, the 
percentage of reactors under safeguards is meaningless.
    The purpose of IAEA safeguards is to prevent non-nuclear weapon 
states from diverting nuclear materials from civilian facilities to a 
nuclear weapons program. For nuclear powers like India, which can use 
unsafeguarded facilities to produce fissile material for their weapons 
programs, safeguards covering only a portion of their facilities serve 
primarily a symbolic function--to reduce the perceived discrimination 
between countries that are obliged to accept safeguards on all their 
facilities (i.e., NPT non-nuclear states) and those that are not. Much 
more meaningful than the percentage of reactors covered by safeguards 
is the amount of fissile material that could be produced at facilities 
not covered by safeguards. Under the separation plan approved on March 
2nd, India has kept open plenty of options for producing fissile 
material for its weapons program (including at fast breeder reactors 
well-suited to producing bomb-grade plutonium).
    The administration claims that the nuclear deal is a major 
breakthrough because ``for the first time'' it brings India into the 
international nonproliferation ``mainstream.'' In her April 5th 
testimony, Secretary Rice argued that: ``We better secure our future by 
bringing India into the international nonproliferation system, not by 
allowing India to remain isolated for the next thirty years the way it 
has been for the last thirty. We are clearly better off having India 
most of the way in rather than all the way out.''
    This statement creates the impression that India today is totally 
outside the rules and, because of that, perhaps even a potential source 
of proliferation difficulties. But India, to its credit, has been 
moving into the nonproliferation ``mainstream'' for quite some time--in 
such areas as export controls, physical protection of nuclear 
materials, and interdictions of WMD-related shipments. It still has a 
distance to go before its export controls meet the highest 
international standards (and indeed the U.S. has sanctioned Indian 
entities for sensitive assistance to Iraq, Libya, and Iran). But it is 
working hard to strengthen its controls--and it will continue to do so 
because it is a responsible country that recognizes that 
nonproliferation controls are in its own self interest. The civil 
nuclear deal would reinforce these positive trends, but they will 
continue with or without the deal.
                       the risks are substantial
    While the nonproliferation gains that can be attributed directly to 
the civil nuclear deal are modest, the potential downsides are 
substantial.
    By seeking an exception to the rules for a country with which the 
United States wishes to build a special friendship, the nuclear deal 
will reinforce the impression internationally that the U.S. approach to 
nonproliferation has become selective and self-serving, not consistent 
and principled. Rules the U.S. previously championed will be perceived 
as less binding and more optional. In general, the deal will send the 
signal that the U.S.--the country the world has always looked to as the 
leader in the global fight against proliferation--is now de-emphasizing 
nonproliferation and giving it a back seat to other foreign policy and 
commercial goals.
    If the U.S. is seen as changing or bending the rules when they no 
longer suit us, others can be expected to follow suit. Indeed, that 
already seems to be happening. Russia, which a year ago said it 
couldn't provide nuclear fuel to India's Tarapur reactors because of 
its Nuclear Suppliers Group obligations, recently sent a large fuel 
shipment to those reactors, arguing (over the objections of most NSG 
members) that it was entitled to do so under the NSG's ``safety 
exception.'' It is highly unlikely that Russia would have played so 
fast and loose with the NSG's rules in the absence of the U.S.-India 
nuclear deal. It is also not by coincidence that, not long after the 
U.S.-India deal, China and Pakistan began discussing additional reactor 
sales. It is not clear whether they will await NSG approval for such 
sales or simply proceed outside the guidelines of the NSG.
    The U.S.-India deal could make it harder to achieve Bush 
administration nonproliferation initiatives. The U.S. is now asking the 
NSG to permit nuclear cooperation only with countries that adhere to 
the IAEA's Additional Protocol and to ban transfers of enrichment and 
reprocessing technologies to states that do not already possess fuel-
cycle facilities. But getting NSG partners to tighten the rules in ways 
favored by the U.S. will be much harder if they are also being asked to 
bend one of their cardinal rules (i.e., no nuclear trade with non-
parties to the NPT) because the U.S. now finds it too constraining.
    The civil nuclear deal could also reduce the perceived costs to 
states that might consider ``going nuclear'' in the future. In 
calculating whether to pursue nuclear weapons, a major factor for most 
countries will be how the U.S. is likely to react. Implementation of 
the deal with India will inevitably send the signal, especially to 
countries with good relations with Washington, that the U.S. will 
tolerate and eventually accommodate to a decision to acquire nuclear 
weapons.
    In the near term, U.S. plans to engage in nuclear cooperation with 
India will make it more difficult to address proliferation challenges 
such as Iran. Of course, Iran's interest in nuclear weapons long pre-
dated the India deal and its motives for seeking nuclear weapons have 
nothing to do with the deal. But the U.S.-India agreement has 
strengthened the case Iran can make--and is already making--
internationally and at home. Why, Iranian officials ask publicly, 
should Iran give up its right as an NPT party to an enrichment 
capability when India, a non-party to the NPT, can keep even its 
nuclear weapons and still benefit from nuclear cooperation? It is an 
argument, however flawed and disingenuous, that resonates well with the 
Iranian public and with developing countries around the world and 
weakens the pressures that can be brought to bear on Tehran.
    The most serious defect of the U. S.-India nuclear deal is its 
failure to constrain the further production of bomb-making fissile 
material--plutonium and highly enriched uranium--for nuclear weapons. 
Indeed, as it now stands, the deal could actually help India 
dramatically increase its fissile material stocks.
    India's indigenous uranium supplies are limited. Domestic uranium 
ore is of low quality and expensive to mine and process into 
yellowcake. Annual production is low and has difficulty keeping up with 
demand for both the civil energy and nuclear weapons programs. Under 
current nonproliferation restrictions, which prevent India from buying 
uranium on the world market, India will soon face serious shortages and 
painful trade-offs. Under the Bush administration plan to change U.S. 
law and NSG guidelines, India could satisfy the needs of an expanding 
civil nuclear energy program through imports, while freeing up its 
domestic uranium reserves for military purposes. It would be a windfall 
gain for the nuclear weapons program.
    In negotiations leading up to the July 18th Joint Statement, the 
Bush administration proposed that India stop producing fissile material 
for nuclear weapons, which would have prevented India from taking 
advantage of freed-up uranium supplies for weapons purposes. India 
rejected the proposal. The administration then made a further attempt 
to limit fissile material production by proposing that most Indian 
nuclear facilities, including its fast breeder reactors, be placed 
under IAEA safeguards and therefore made ineligible for weapons 
plutonium production.
    But India's nuclear establishment dug in its heels, calling 
publicly for minimizing safeguards coverage and avoiding constraints on 
India's bomb-making capacity. Prime Minister Manmohan Singh, already 
under attack on the nuclear deal from his left-wing coalition partners, 
backed up the nuclear establishment's demands. Anxious to conclude the 
nuclear deal lest the Delhi summit be seen as a failure and calculating 
that Singh had less political room for maneuver than President Bush, 
the administration threw in the towel on placing meaningful limits on 
India's fissile material production capacity.
    As a result, a third of India's reactors that currently exist or 
are under construction will be outside safeguards and available for 
plutonium production. Any future reactor, thermal or breeder, can be 
designated by India as outside safeguards. Of course, the Indians will 
not devote all their unsafeguarded nuclear reactors to weapons 
plutonium production. Indeed, given India's ambitious nuclear energy 
goals, we would expect most of those reactors to be used for civilian 
purposes. But even if only two or three large reactors were used as 
bomb factories, India could produce enough plutonium for well over 50 
nuclear weapons each year.
    Why should the U.S. care about Indian production of fissile 
material? After all, India is a friend and a responsible nuclear power. 
One reason we should care is that, especially after 9/11, we have a 
vital interest in limiting the availability of bomb-making materials 
around the world and preventing such materials from falling into the 
hands of terrorist groups who, we know, are actively seeking to acquire 
them. If India steps up production, Pakistan can be expected to follow 
suit, China could decide to resume production, and others may be 
encouraged to seek their own production capabilities. The more 
materials produced, the more difficult and costly it will be to secure 
them, and the greater the risks of nuclear terrorism.
    Another reason we should care about stepped up Indian production of 
fissile materials is that it could lead to increased tensions and 
destabilizing arms competition in southern Asia, involving India, 
Pakistan, and China. Pakistani authorities have publicly taken special 
note of the failure of the U.S.-India nuclear deal to limit Indian 
fissile material production. Reportedly, the Pakistani National Command 
Authority recently met to assess the impact of the deal and consider 
adjustments Pakistan may need to make to its own strategic plans. 
President Musharraf said, ``We cannot remain oblivious to the changes 
evolving in the region. All the steps will be taken for the defense, 
security, and safety of Pakistan.'' Moreover, China has warned that the 
deal threatens to ``undermine global disarmament moves,'' suggesting 
that Beijing may also decide that it needs to respond programmatically.
    Of course, continued or even stepped up nuclear weapons production 
in the region would not necessarily translate into increased tensions. 
Relations between Indian and Pakistan and between Indian and China have 
both been improving in recent years. But India's insistence on keeping 
substantial fissile material production capacity outside of 
safeguards--thereby keeping options open for a substantial strategic 
build-up--could raise suspicions about its intentions in the minds of 
its neighbors and have an adverse effect on the processes of 
reconciliation underway in the region.
                     can the deal be strengthened?
    As it currently stands, the U.S.-India civil nuclear cooperation 
deal is a net loss for nonproliferation. Can it be transformed into a 
net nonproliferation gain? The answer, at this stage, lies mainly with 
the U.S. Congress.
    The Bush administration and the Indian Government would naturally 
like to see the Congress approve the deal as is, on the basis of the 
draft legislation the administration has already submitted, and to do 
so as quickly as possible. But especially given the unprecedented 
character of the deal and its far-reaching implications, Congress has a 
responsibility to scrutinize it carefully before passing judgment and 
to adopt any modifications or conditions it deems necessary to protect 
U.S. interests, including in preventing the proliferation of nuclear 
weapons or fissile materials.
    Implementation of the civil nuclear deal will require Congressional 
approval of amendments to the Atomic Energy Act as well as a bilateral 
U.S.-India agreement for peaceful nuclear cooperation. In addition, 
India and the IAEA will have to conclude an agreement that applies IAEA 
safeguards to Indian nuclear facilities as well as an Additional 
Protocol to that agreement. And finally, the NSG will have to agree by 
consensus to modify its guideline that currently precludes nuclear 
cooperation with states outside the NPT. All of these arrangements are 
interrelated. For example, the Bush administration's willingness to 
seek changes in U.S. law and NSG policies depended on India's 
willingness to accept IAEA safeguards on certain Indian nuclear 
facilities in perpetuity.
    Before deciding to amend the Atomic Energy Act, the Congress should 
therefore insist on seeing as much of the overall package as possible, 
including the IAEA-India safeguards agreements (concluded but not 
necessarily already approved by the IAEA Board) and a concluded U.S.-
India agreement for peaceful nuclear cooperation. The need to assess 
these arrangements as a package is particularly justified because some 
of them will be unprecedented. India has put the IAEA on notice that 
its safeguards agreement will not follow standard models but will be 
``India-specific.'' The meaning of India-specific is not yet clear. 
Moreover, because India is a nuclear power that must still be treated 
as a non-nuclear state for the purposes of U.S. law, the U.S.-India 
peaceful nuclear cooperation agreement will be different from any 
previous U.S. agreement for cooperation. Negotiations on the IAEA-India 
safeguards agreements and the U.S.-India agreement for peaceful nuclear 
cooperation have already gotten underway; and so assuming those 
negotiations go smoothly, Congressional insistence on looking at the 
package as a whole need not cause significant delays.
    Congress should not permit normal approval processes to be short-
circuited. The Atomic Energy Act provides that agreements for peaceful 
nuclear cooperation that meet all the requirements of U.S. law will be 
approved automatically if the Congress does not pass a joint resolution 
of disapproval within 90 days; whereas agreements that do not meet all 
the statutory requirements (i.e., in cases where those requirements are 
waived) must be approved by both houses of Congress. Although the U.S.-
India agreement for cooperation will not meet all the requirements of 
law (it is the first of about 40 such U.S. agreements not to do so) and 
will therefore require a waiver (because India will not have safeguards 
on all of its nuclear facilities), the administration is nonetheless 
proposing that the agreement be fast-tracked with the much less 
demanding approval procedure. Clearly, the India case deserves more 
scrutiny, not less. Congress should insist that both houses of Congress 
get the opportunity to review and vote on the U.S.-India agreement.
    In terms of the substantive elements of the U.S.-India civil 
nuclear deal, there are several the Congress will want to probe and 
understand more clearly. Among them will be whether an Indian nuclear 
test explosion--or some other Indian actions--would trigger the 
termination of U.S. nuclear cooperation. A related question is whether 
the U.S. would be committed to assist India in obtaining reactor fuel 
from third parties if U.S. fuel supplies had to be cut off as a result 
of an Indian nuclear test or some other action.
    Based on its review of the nuclear deal, Congress may wish to adopt 
legislation that strengthens the deal and minimizes the risks it poses 
to the global nonproliferation regime.
    One means of minimizing those risks would be to restrict the scope 
of nuclear cooperation with India that would be permitted by the new 
legislation. A long-standing element of the nonproliferation regime has 
been the ``NPT preference policy,'' which has meant giving NPT parties 
benefits in the civil nuclear energy area not available to those 
outside the NPT. A way of maintaining some preferential treatment for 
NPT parties would be to modify U.S. law (and NSG guidelines) to permit 
nuclear-related exports to India except equipment, materials, or 
technologies related to sensitive fuel-cycle facilities, including 
enrichment, reprocessing, and heavy water production. Such a 
distinction would permit India to acquire uranium, enriched fuel, 
nuclear reactors and components, and a wide range of other nuclear 
items, but would retain the ban on transfers of those items that are 
most closely related to a nuclear weapons program. The British and 
French, both of whom are strong supporters of nuclear cooperation with 
India, reportedly believe that nuclear cooperation with India should 
not include fuel-cycle equipment and technologies.
    Another way of reducing nonproliferation risks would be to 
implement the nuclear deal in a country-neutral manner--not as a 
special exception to the rules for India alone, which is what the 
administration has proposed. A problem with the country-specific 
approach is that it accentuates concerns that the U.S. is acting 
selectively on the basis of foreign policy considerations rather than 
on the basis of objective factors related to nonproliferation 
performance.
    To avoid the pitfalls of making a country-specific exception 
without opening the door to nuclear cooperation in cases where it is 
clearly not yet merited, the Congress might consider permitting nuclear 
cooperation with any state not party to the NPT that meets certain 
criteria of responsible nuclear behavior (e.g., moratorium on nuclear 
testing, effective export controls, strong nuclear security measures, 
cooperation in stopping illicit nuclear trafficking). While such an 
approach would be country-neutral, it would still enable the U.S. 
Government (and other NSG members) to distinguish among non-parties to 
the NPT in terms of whether--and how soon--they would be eligible for 
nuclear cooperation.
    By far the most important way to reduce nonproliferation risks--and 
to turn the civil nuclear deal into a net nonproliferation gain--would 
be for Congress to take action that would make the deal a catalyst for 
curbing or even capping the worldwide buildup of fissile material. In 
particular, Congress should adopt legislation that permits nuclear 
cooperation to proceed when India stops producing fissile material for 
nuclear weapons, either by ceasing production unilaterally, by joining 
other nuclear powers (including China and Pakistan) in a multilateral 
moratorium, or by adhering to a multilateral, verifiable treaty banning 
the production of fissile material for nuclear weapons (i.e., a fissile 
material cutoff treaty, or FMCT).
    In the run-up to the July 18th Joint Statement, India rejected a 
Bush administration proposal that it stop producing fissile material 
for nuclear weapons. But it is possible New Delhi might take a 
different view toward ending production not unilaterally but as part of 
a multilateral moratorium or treaty. After all, India has long declared 
its support for a multilateral FMCT. Indeed, in their July 18th Joint 
Statement, India and the United States agreed to work together to 
achieve an FMCT. If that is a serious undertaking and not a throwaway 
line, it would not be unrealistic for the key nuclear powers to reach 
agreement on a cutoff in a reasonably short period of time. The U.S., 
UK, France, and Russia have all ceased producing fissile material for 
nuclear weapons as a matter of policy. China is also believed to have 
stopped production. With intensive diplomatic effort, it should be 
possible for India and the U.S. to persuade Pakistan to join them and 
these other nuclear powers in a multilateral moratorium pending 
completion of a formal multilateral treaty. By linking nuclear 
cooperation to the termination of fissile material production, Congress 
could provide additional incentive for Washington and New Delhi to 
reach agreement at an early date.
                               conclusion
    In seeking to make India an exception to longstanding 
nonproliferation rules, the Bush administration has given India 
virtually all that it wanted and has run major risks with the future of 
the nonproliferation regime. It is therefore reasonable to ask India to 
take steps to minimize the risks and demonstrate its own strong 
commitment to fighting proliferation. But the administration has 
settled for far less than what is required to make the civil nuclear 
deal a net gain for nonproliferation.
    India has long wanted to be regarded as a legitimate member of the 
nuclear club, not a pariah or outsider. The administration is right 
that it is time that India be brought into the nonproliferation 
mainstream. But with membership comes responsibilities--not just in 
ensuring against leakage of nuclear equipment or technology to other 
countries but also in practicing strategic restraint that can increase 
international security generally. India has stated that it is prepared 
to assume the same responsibilities and practices as other nuclear 
powers. It so happens that the five original nuclear weapons states 
have all stopped producing fissile material for nuclear weapons. Should 
India not be asked to join them?
    Indian leaders might be expected to say that, since the original 
five nuclear powers have produced more bomb-grade material than India, 
India should be entitled to catch up. But since its May 1998 nuclear 
tests, India has often stated that its strategic requirements are not 
open-ended and that it doesn't seek nuclear parity with China or any 
other country. Instead, it has consistently maintained that it requires 
only a ``credible, minimum deterrent capability.'' If that remains the 
case, perhaps it can soon decide that it has accumulated sufficient 
fissile material for its minimum deterrent needs and can afford to 
forgo further production.
    A multilateral cap on the accumulation of fissile material would 
make a major contribution to fighting nuclear proliferation and 
preventing nuclear terrorism. Making a U.S.-India civil nuclear deal a 
catalyst for achieving such an outcome would transform the deal from a 
substantial loss to a substantial gain. It would enable the U.S. to 
advance its strategic interest in a qualitatively improved relationship 
with India as well as serve its nonproliferation interests--not promote 
one at the expense of the other. Congress can play a key role in 
achieving such an outcome.

    The Chairman. Thank you very much, Dr. Einhorn.
    Dr. Milhollin.

STATEMENT OF DR. GARY MILHOLLIN, DIRECTOR, WISCONSIN PROJECT ON 
              NUCLEAR ARMS CONTROL, WASHINGTON, DC

    Dr. Milhollin. Thank you very much, Mr. Chairman. I'd like 
to thank you for inviting me to testify today on the 
administration's plan for nuclear cooperation with India. And I 
would like to say that I think the committee is right to focus 
on the strategic aspect of the proposed cooperation.
    I would recommend to the committee that it ask the 
following question. Why, after 9/11, when we should be doing 
all we can to fight terrorism, and when we talk almost every 
day about states or terrorists getting their hands on an atomic 
bomb, should we weaken the controls on the export of nuclear 
material? Is this the right time to do that? And, if we do it, 
will it make us safer?
    We've heard witnesses talk about the diplomatic and trade 
aspects of this arrangement, but this is really a change in our 
export control laws. That's what's being proposed. And we have 
to focus, specifically, on what it is we're trying to do. And 
it seems to me clear that if we look at this carefully, we'll 
conclude that it doesn't make us more secure, it puts us more 
at risk.
    Why is that? First, it is impossible to weaken export 
controls for India, which is what this deal does, without 
weakening them for everyone else. The ``everyone else'' 
includes Iran, Pakistan, and even terrorist groups who are 
trying to get their hands on the means to make weapons of mass 
destruction.
    The great flaw in the administration's proposal is that it 
considers India to be an isolated case. In the world we live in 
today, it would be nice to be able to do that, but it's, in 
fact, impossible, because export controls are administered 
through regimes. The committee is familiar with these regimes, 
but it's important to notice that a cardinal principle of all 
the regimes is that they are country-neutral, they do not make 
exceptions for specific countries. And there is a very good 
reason for that. If the United States decides to drop controls 
to help one of its friends--in this case, India--other supplier 
countries will do the same for their friends. China will drop 
controls on its friend Pakistan, and Russia will drop controls 
on its friend Iran. There is no way to convince either China or 
Russia not do that. This is the way international regimes work.
    Once we start tinkering with the regimes, they could 
unravel very quickly; and, in my judgment, will unravel. As one 
expert in the Pentagon told me once upon a time, ``They're like 
a springloaded box; if you raise the lid, you may never get it 
back on again.''
    So, from a general strategic point of view, with this cost 
in mind, why is it that we're helping India? Only three 
countries have refused to sign the Non-Proliferation Treaty: 
India, Israel, and Pakistan. Of the three, India is the least 
important, strategically. Under any calculation of our 
strategic interests, Pakistan ranks higher than India. Pakistan 
is essential to our ongoing military and political efforts in 
Afghanistan. Pakistan is essential to our campaign against al-
Qaeda. Pakistan is a leading power in the Muslim world; a world 
with which the United States needs better relations.
    Israel has always been a close United States ally, and will 
continue to be. Israel would like to have United States nuclear 
cooperation. Israel is also located in a part of the world that 
is of highest importance to United States foreign-policy 
interests.
    In any competition for strategic favor from the United 
States, India finishes a distant third.
    So, why choose India now for preferential treatment? I can 
only see one answer. India is no different today than it was in 
1998, when it tested nuclear weapons. The answer is, India is 
the biggest market.
    Secretary Rice, when she testified to this committee on 
April 5, said that the agreement with India was crafted with 
the private sector in mind. She mentioned a $13 billion deal by 
Boeing, purchases of reactors, American reactors, by India, and 
opportunities for United States companies to enter the 
lucrative and growing Indian market.
    If you look at this from the point of view of other 
countries, the message is pretty clear. Export controls are now 
less important to the United States than money. But a decision 
to put money above export controls is precisely what we don't 
want China and Russia to do when they sell to Iran. We don't 
want China and Russia to tell us that money in their pockets is 
more important than stopping Iran's march toward the bomb. Yet 
that is exactly what they will tell us.
    So, those are the costs of the administration's plan. What 
are the benefits?
    We've already heard a discussion about the possibility that 
India will place 14 of 22 reactors under inspection. It seems 
to me that that's a little bit like a person with a 22-room 
house who says that the police can inspect 14 rooms, but not 
the other 8. Why would any policeman in his right mind accept 
that offer? In fact, putting additional reactors under 
inspection does not create any benefit, in terms of 
nonproliferation, because India has calculated how much 
plutonium it's going to need for bombs, and it has kept out a 
sufficient number of reactors to make that much plutonium.
    The other benefit that the administration cites is that 
India may buy American reactors. The precedent is our agreement 
with China. I'm sure that the committee remembers the intense 
debates we had over the China Cooperation Agreement. After we 
finally agreed to cooperate with China, how many reactors did 
China buy? The answer is: Zero. Not a single American reactor. 
The import orders went to France, Russia, and China. I don't 
think this time we're going to do any better. India can already 
build domestic reactors that are cheaper than ours. They can 
turn to the Russians for imports, because the Russians' will be 
cheaper, and there will be fewer conditions. The French and the 
Canadians will also compete with us. So, I think the chance 
that we're going to defeat this competition is virtually nil.
    The last point I'd like to make has to do with the power of 
Congress, which I think is very important, and I'm not sure 
that it's been covered.
    Under present law, the administration must obtain the 
consent of Congress before putting into effect an agreement 
that does not satisfy our nonproliferation criteria. This 
requirement for congressional approval encourages the 
administration to make good agreements. But, under the proposed 
legislation, such an agreement would automatically go into 
effect 90 days after it's presented to Congress, unless 
Congress votes to block it. That vote could be vetoed, so 
Congress would need a two-thirds majority to block or amend an 
agreement under this new legislation.
    Congress is also being asked to vote before seeing any 
agreement. We've been talking about an agreement with India as 
if there were actually an agreement. There is no agreement. 
Congress is being asked to vote before it knows what it's 
voting on.
    There is no rush. I recommend that Congress wait until it 
sees the actual agreement before it takes any action. If it 
does that, Congress will retain its oversight authority and 
will encourage the administration to negotiate an agreement 
that protects our strategic interests.
    Thank you very much.
    [The prepared statement of Dr. Milhollin follows:]

 Prepared Statement of Dr. Gary Milhollin, Director, Wisconsin Project 
                on Nuclear Arms Control, Washington, DC

    Mr. Chairman, and members of the committee, I would like to thank 
you for inviting me to testify today on the administration's plan for 
nuclear cooperation with India, and particularly on the plan's 
strategic impact.
    The committee is right to emphasize the strategic nature of the 
plan. The legislation to implement it goes to the heart of our national 
security. The bill now before Congress would change our export control 
laws--laws that have been in effect for almost thirty years, and that 
were adopted in response to India's nuclear test in 1974. It is worth 
remembering that India achieved that test by diverting plutonium made 
with a peaceful U.S. nuclear export, which is why India had to call the 
test a ``peaceful nuclear explosion.''
    The broad question before us is this: Why, after 9/11, when we 
should be doing all we can to fight terrorism, and when we talk almost 
every day about states or terrorists getting their hands on an atomic 
bomb, should we weaken the controls on the export of nuclear material? 
Is this the right time to do that? And if we do it, will it make us 
safer?
    These are the questions that Congress should ask. So far, the 
debate has emphasized diplomacy and trade. The most important 
questions, however, are strategic. The answers, I'm afraid, are that 
the legislation will not make us safer. Instead, it will put us more at 
risk.
    Why? Because it is impossible to weaken export controls for India 
without weakening them for everyone else. The ``everyone else'' 
includes Iran, Pakistan, and even terrorist groups--working through a 
national government or not--who might want to buy the means to make 
mass destruction weapons. And if we do weaken export controls for 
everyone, which is bound to happen if we weaken them for India, we may 
hasten the day when a nuclear explosion destroys an American city.
    The great flaw in the administration's proposal is that it 
considers India an isolated case. This is simply impossible. To do so 
contradicts the fundamental principle upon which export controls are 
based. The controls today are administered through international 
regimes. The regimes include the Nuclear Suppliers Group and the 
Missile Technology Control Regime. The first tries to stop the spread 
of nuclear arms, the second the missiles to deliver them.
    A cardinal principle of both regimes is that they are ``country 
neutral.'' That is, they do not make exceptions for specific countries. 
The MTCR uses objective criteria to target ``projects of concern'' for 
missile proliferation. The NSG requires all non-nuclear weapon states 
that import items designed or prepared for nuclear use to accept 
comprehensive inspections. Under such inspections, all critical nuclear 
material must be accounted for, regardless of the country. In this way, 
the regimes have avoided making politically motivated decisions.
    There is good reason for this practice. If the United States 
decides to drop controls to help one of its friends--in this case 
India--other supplier countries will do the same for their friends. 
China will drop controls on its friend Pakistan, and Russia will drop 
controls on its friend Iran. There will be no way to convince either 
China or Russia not to do that. They will say that what is good for 
your friend is good for mine. If you want to develop your market in 
India, I want just as much to develop my market in Pakistan or Iran. No 
country will give up a market unless other countries do the same. That 
is the way international regimes work.
    The regimes also rely on coordination, and on consensus. The United 
States acted unilaterally when it made its deal with India. There was 
no reported notification or coordination with the NSG or MTCR before 
the deal was concluded. By violating the consensus norm of these 
regimes, the United States has invited other members to act the same 
way. If they do, they may make unilateral deals with Iran or Pakistan 
without informing the United States. This risk has been created by our 
own action, and certainly does not make us safer.
    The regimes also require enforcement. The member countries are 
required to investigate and shut down unauthorized exports by their own 
companies. Since the attacks on 9/11, we have been asking the other 
countries to do more of this. But can we really ask them to crack down 
on companies that are exporting the same kind of goods to Pakistan or 
Iran that we are exporting to India? The same kind of technology will 
be going to the same kind of projects. What sense will there be in 
trying to interdict the one and not the other? Even if we can convince 
the other supplier countries to give lip service to an exception for 
India, it is unrealistic to expect them to follow through with 
enforcement against their own companies.
    Once we start tinkering with the regimes, they could unravel 
quickly. As one expert in the Pentagon told me, they are like a spring-
loaded box. If you raise the lid, you may never get it closed again. 
What he meant was that the United States has always set the standard 
for export controls, and other countries have often taken a long time 
to follow the U.S. lead in strengthening them. But if the United States 
decides to loosen controls, it will take only an instant for other 
countries to follow. The lid will fly off, and we may never be able to 
get it back on.
    I would also like to add a personal note to this point. I have just 
returned from trips to Jordan and the United Arab Emirates, where I 
helped provide training and information to assist these countries in 
improving their export controls. I hope to go to Turkey next. These are 
all Muslim countries in which the U.S. government is trying to improve 
export control performance. The export control officials in these 
countries are now the front-line troops in the fight against terrorism. 
They must do their jobs well in order to keep terrorists from getting 
their hands on dangerous technology.
    In Jordan, one of the first questions I was asked was: ``What about 
India? Why has the United States decided to export to India?'' There is 
no way I, or any other American, can answer that question in a credible 
way in a Muslim country. India, Pakistan and Iran all decided to 
develop nuclear weapons under the guise of peaceful nuclear 
cooperation. From this standpoint, they are indistinguishable. Why 
punish Pakistan and Iran but not India? They are all guilty. There is 
no persuasive reason for treating them differently. India is no 
different today than it was in 1998, when it tested a nuclear weapon. 
So, the second question, hiding behind the first, is ``what is the 
ground for the discrimination?'' None of us wants to think of the word 
religion, but it is a word that is in the mind of Muslim countries. If 
the United States is only against proliferation by countries it does 
not like, which now appears to be the case after the deal with India, 
why does it like some countries but not others?
    Congress should look deeply into these questions before approving 
the legislation. So far, it does not appear that anyone has done so, 
including the administration. The administration's plan was arrived at 
hastily, with no consultation with other regime members, and virtually 
none with Congress. If the press is to be believed, there was even 
little consultation with arms control experts within the administration 
itself. The proponents of the deal have presented it as if it were 
simply a matter of trade and diplomacy. Congress should insist upon a 
full review of the strategic impact.
    If one looks at the strategic side, it is hard to see why we should 
be helping India. Only three countries have refused to sign the Nuclear 
Nonproliferation Treaty: India, Israel and Pakistan. Of the three, 
India is the least important strategically.
    Under any calculation of America's strategic relations, Pakistan 
ranks higher than India. Pakistan is essential to our ongoing military 
and political efforts in Afghanistan. Pakistan is also essential to our 
campaign against al-Qaeda. Without the aid of General Musharraf, we 
would have a much harder time accomplishing our goals in either of 
these endeavors. Pakistan is also a leading power in the Muslim world, 
a world with which the United States needs better relations. Yet, our 
deal with India is a blow to General Musharraf's prestige at best, and 
at worst a public humiliation. We should not give General Musharraf 
more trouble than he already has.
    Israel, of course, has always been a close U.S. ally, and will 
continue to be. Israel would like to have U.S. nuclear cooperation. In 
addition, Israel is located in a part of the world that is of the 
highest importance to U.S. foreign policy interests.
    In any competition for strategic favor from the United States, 
India finishes a distant third.
    Is India nevertheless important because it will become a 
counterweight to China? Proponents of the deal so argue. But the notion 
that India might assist the United States diplomatically or militarily 
in some future conflict is pure speculation. India's long history as 
the leader of the ``non-aligned'' movement points in the opposite 
direction. India will follow its own interests as it always has. An 
example is India's decision to train Iranian sailors and import Iranian 
gas. In addition, India shares a border with China, is keen to have 
good relations with China, and does have good relations with China. It 
will not sour such relations simply from a vague desire to please the 
United States.
    This India-as-counterweight-to-China theory reminds one of the 
argument made by the first Bush administration in the 1980s, when it 
contended that the United States should export sensitive dual-use 
equipment to Saddam Hussein in order to build up Iraq as a 
counterweight to Iran. U.S. pilots were later killed in Iraq trying to 
bomb things that U.S. companies had provided. History shows that such 
predictions can be dangerous.
    Then why choose India for preferential treatment? If it is not 
because of our need to fight terrorism, and not because of our desire 
to reward a faithful ally, what is it? There seems to be only one 
answer: India is the biggest market. Secretary of State Rice readily 
admits the commercial interest. On April 5 she testified to this 
committee that the agreement with India was ``crafted with the private 
sector firmly in mind.'' She cited a 13 billion dollar deal by Boeing; 
she cited the hope of reactor sales by our nuclear industry; she cited 
the opportunity for ``U.S. companies to enter the lucrative and growing 
Indian market.''
    She might also have mentioned India's defense market. That market 
seems to be the one that is really motivating the deal. India is 
shopping for billions of dollars worth of military aircraft, and the 
administration is hoping it will buy both the F-16 and the F-18. 
According to the American press, officials in the defense industry and 
the Pentagon are saying that the main effect of the nuclear deal will 
be to remove India from the ranks of violators of international norms. 
And once this change in India's status occurs, there will be no 
impediment to arms exports. The Russian press is even more explicit. It 
complains that in addition to ``recognition of India's nuclear status 
by the United States,'' the nuclear deal ``opened the door to the 
Indian market for American arms merchants,'' with the result that 
Russia may be squeezed out.
    Boiled down to the essentials, the message is clear: Export 
controls are less important to the United States than money. They are a 
messy hindrance, ready to be swept aside for trade. But, a decision to 
put money above export controls is precisely what we don't want China 
and Russia to do when they sell to Iran. We don't want China and Russia 
to tell us that money in their pockets is more important than stopping 
Iran's march toward the bomb. But China and Russia are now hearing the 
new commercial message coming from America, and they are not stupid. If 
they see that we are willing to put money above security, and willing 
to take the risk that dangerous exports won't come back to bite us, 
they will do the same. Everyone's security will diminish as a result.
    Thus, this legislation has clear costs to our security. Are these 
outweighed by the benefits? What are the benefits?
    The principal benefit cited by the administration is that India 
will place 14 of its 22 power reactors under inspection. But, as others 
have pointed out, this leaves a great number of reactors off-limits. In 
fact, the reactors that are off-limits will be sufficient to produce 
enough plutonium for dozens of nuclear weapons per year. This is more 
than India will ever need. India is not restricting its nuclear weapon 
production in any way. Therefore, there is no ``non-proliferation 
benefit'' from such a step.
    In effect, India's offer is like that of a counterfeiter with a 22 
room house, who offers to let the police look into 14 rooms as long as 
they stay out of all the others. Why would any policeman in his right 
mind accept such an offer, or want to inspect one of the 14 rooms? It 
would be the only place where he was sure not to find anything. It 
would waste his time, just as it will waste the time of international 
inspectors to look at India's 14 declared reactors. Everyone knows that 
it will be the eight undeclared ones that make the bombs. India, in 
fact, appears to have calculated the number of reactors to put off-
limits according to how much plutonium they will make. India has 
assured itself that the resulting amount of plutonium will be enough to 
allow it to continue making bombs at an unfettered pace.
    This point about wasting inspection time may seem minor, but it 
isn't. The International Atomic Energy Agency has a limited number of 
inspectors. They are already having trouble meeting their 
responsibilities. To send them to India on a fool's errand will mean 
that they won't be going to places like Iran, where something may 
really be amiss. Unless the Agency's budget is increased to meet the 
new burden in India, the inspection of India's declared reactors will 
produce a net loss for the world's non-proliferation effort.
    The other major benefit that the administration cites is that India 
may buy American reactors. Such a possibility exists, but is remote. 
The precedent is our experience with China. Some members of the 
committee may remember the intense debate in Congress over the U.S. 
nuclear cooperation agreement with China in the 1980's. At the time, 
our industry was citing the large number of reactors that China was 
planning to buy, and predicting that many of the orders would come to 
us. How many American reactors did China actually buy? The answer is: 
none. Exactly zero. The main effect of China's agreement with us was to 
increase the number of vendors who were in competition. The result was 
to drive the price down for the Chinese reactor buyers. That was good 
for China, but did nothing for us. The Chinese import orders went to 
France, Russia and Canada.
    We are not likely to fare any better this time. New Delhi is 
already building a string of reactors on its own that are less 
expensive to put up than ours. And if India wants to import reactors, 
it can turn to the Russians, who will charge less money and attach 
fewer conditions, and who are already ahead of us in the Indian market. 
It can also turn to the French or even perhaps the Canadians. All of 
these countries will compete with us if we sell to India. The chance 
that we will defeat this competition is slim.
    The administration also argues that India has a great need for 
nuclear power to meet its electricity demand. This too is far-fetched. 
India has been generating electricity with nuclear reactors for more 
than 40 years. Yet, reactors supply only about 2 percent to 3 percent 
of its electricity today. If reactors are so vital to India's energy 
needs, why hasn't India built more? The answer is that reactors have 
not turned out to be as safe, or as clean, or--most important--as 
economical as originally thought. Nuclear power has been virtually 
insignificant in India's energy mix in the past, and will be no more 
important in the future. It is worth noting that the United States 
hasn't ordered a new reactor for about thirty years. Why do we expect 
India to buy American reactors when even we aren't buying them?
    I would also like to comment on the effect that the 
administration's new policy will have on missile proliferation. 
President Bush and Indian Prime Minister Manmohan Singh agreed to 
cooperate in ``space exploration,'' including ``satellite navigation 
and launch.'' This language is broad enough to allow missile-useable 
components and technology to be exported. The United States seem 
entirely ready to permit such sales. The U.S. Commerce Department 
recently dropped restraints on American exports of missile-related 
equipment to three subsidiaries of the Indian Space Research 
Organization, despite the fact that all three are active in Indian 
missile development. This appears to be only a first step in a general 
loosening of U.S. missile export controls for India.
    It is difficult to predict where this will lead. One cannot help a 
country like India build better space launchers without helping it 
build better missiles. Our experience with China is again the 
precedent. In the 1990's China got crucial American help in rocket 
design, guidance, launch operation, and payload integration, all of 
which were directly useable in making intercontinental ballistic 
missiles. The help came from American companies that were supposed to 
be engaged only in a peaceful space effort.
    India will be no different. India, in fact, is the first country to 
develop a long-range nuclear missile from a civilian space-launch 
program. India's Agni missile, tested in 1989, was built by using the 
design of the American ``Scout'' space rocket. India imported the 
blueprints from NASA under the cover of peaceful space cooperation.
    India has every intention of building nuclear missiles that will 
reach the United States. For some years, India has been working to 
develop a nuclear submarine, which will be able to threaten every 
coastal city in the world with a nuclear payload. India has also been 
working on an intercontinental ballistic missile, known as the Surya, 
which will fly much farther than any target in China. Two questions 
come to mind. Why should India want to reach such targets? And does the 
United States really want to make it easier for India to succeed?
    The final point I would like to make has to do with the power of 
Congress. That power will be greatly reduced if the administration's 
legislation passes.
    The important question to ask about the power of Congress is this: 
Why is this bill necessary? What is wrong with present U.S. law?
    Under the present Atomic Energy Act, the president could make an 
agreement tomorrow for nuclear cooperation with India. All the 
president has to do is submit to Congress what is known as an 
``exempt'' agreement--that is, an agreement that does not satisfy the 
Act's present criteria for nuclear cooperation.
    India does not satisfy the criteria because it has refused to put 
all of its nuclear material under international inspection and is, in 
fact, running a secret nuclear weapon program. That is why the 
president must ``exempt'' the agreement before submitting it to 
Congress. After such a submission, Congress must adopt a joint 
resolution saying that it favors the agreement. If Congress disagrees, 
or does not act, the agreement does not go into effect.
    The president must meet a high standard to justify the exemption. 
He must find that holding India to the present criteria ``would be 
seriously prejudicial to the achievement of United States non-
proliferation objectives'' or that it would ``otherwise jeopardize the 
common defense and security.'' He must also persuade Congress that he 
is right, because Congress must take action for the agreement to 
operate.
    Why hasn't the president taken this course of action? Apparently, 
because he cannot meet the standard. He cannot find that it ``would be 
seriously prejudicial to the achievement of United States non-
proliferation objectives'' to make India meet the existing criteria. To 
the contrary, it would advance U.S. non-proliferation objectives if 
India met the criteria, because India would be giving up its bomb 
program and putting its fissile material under international 
inspection. That would be a clear gain for non-proliferation instead of 
a loss.
    Because the administration cannot meet the present standard, the 
administration has asked Congress to lower it. India would only have to 
meet a list of weaker criteria that the administration is already 
confident India can comply with.
    But the administration has not been content to stop there. It also 
wants to shift the burden of proof. Under the new legislation, the 
burden of proof would shift to Congress. Instead of having to convince 
Congress to act after submitting an ``exempt'' agreement, the agreement 
would take effect automatically after 90 days unless Congress voted 
affirmatively to block it. Any such vote could be vetoed, so Congress 
would have to muster a 2/3 majority in both houses in order to have its 
view prevail. That is in direct contradiction to present law, under 
which an exempted agreement would have to be affirmatively agreed to by 
a joint resolution.
    Thus, the effect of the bill is twofold: it makes it easier for the 
president to exempt an agreement, and it makes it harder for Congress 
to prevent an exempted agreement from taking effect. If Congress wishes 
to preserve its existing power, it could require that an exempted 
agreement still be reviewed under the present process. The 
administration has not advanced any persuasive reason why the process 
of Congressional review should be changed.
    Preserving the existing process would have several advantages. 
Congress would have more than 90 days to study the agreement; Congress 
would not have to muster a veto-proof majority to block the agreement, 
or attach conditions to it; and Congress would be able to see the 
actual agreement before taking a vote.
    Under the new legislation, Congress is being asked to lower the 
standards for nuclear cooperation and to shift the burden of proof 
before any agreement with India has been reached. Congress is being 
asked to vote without knowing what kind of inspections India will 
eventually agree to, without knowing whether India will really improve 
its own export controls, and without knowing whether India's plan for 
separating its civilian from its military nuclear facilities is 
``credible,'' as the new criteria require. Congress would be buying a 
pig in a poke. It would be giving the administration carte blanche 
authority to make an agreement that, because of Congress' reduced power 
of review, there would be little opportunity to change.

    The Chairman. Well, thank you very much, Dr. Milhollin.
    Now, the Chair needs to make a tactical decision; namely, 
to vote and to come back. And I apologize for the delay, but 
I'm going to recess the hearing for 10 minutes, and then we 
will be able to do justice to Dr. Cohen, so he may give his 
full testimony, then have a short question period.
    I apologize, but this is the nature of our business today.
    And the committee is recessed for 10 minutes.
    [Recess.]
    The Chairman. The committee is called to order.
    And we'll call now on Dr. Stephen Cohen for his testimony.

STATEMENT OF DR. STEPHEN P. COHEN, SENIOR FELLOW, THE BROOKINGS 
                  INSTITUTION, WASHINGTON, DC

    Dr. Cohen. Thank you, Mr. Chairman. I'm honored to again 
appear before you and the committee. As I have written 
testimony, I'll just summarize that so we can get to Q&A.
    I did want to mention to Senator Hagel that Brookings is 
going to start a bottoms-up examination of nonproliferation 
policy. Mike O'Hanlon and I are going to write it, and we're 
going to look at these issues, and certainly the vital 
distinction between Non-Proliferation Treaty and the 
nonproliferation regime. I support this agreement. In a sense, 
it builds a spare room onto the NPT house. Since 1990, I've 
argued for a halfway house which would accommodate India, and 
perhaps other states that met certain criteria. This agreement 
does that, although it is not perfect. I certainly see some 
minor problems, but I think that, in the long run, it is the 
agreement that we should go with.
    I was asked by committee staff to talk about history. 
Perhaps unique among the panelists, I've been in touch with 
this issue and in contact with the Indian debate on nuclear 
weapons since 1963, when I first went to India as a graduate 
student. And I've lived in India for a total of 6 years, almost 
every decade since then, coincidentally during some of the 
years when the Indians were in the midst of a major debate 
about nuclear strategy and nuclear policy.
    I won't go into the details of that debate, but I drew two 
conclusions from essentially 45 years of watching the Indians 
talk about nuclear weapons.
    One is that, in most cases India was responding to nuclear 
developments elsewhere. It was sharply divided as to the 
utility and morality of nuclear weapons. And until the 1998 
tests, India's policy was one of maintaining an option or a 
recessed--that is, unannounced--deterrent. I think that could 
have been extended, had we not pushed them to sign the CTBT and 
the NPT, as a nonnuclear weapons state. In my judgment, the 
public policy of urging them to cap, reduce, and eliminate 
their nuclear program was an incentive for them to go ahead and 
test, to make it an irreversible decision. That's history, and 
we don't want to debate that now.
    As opponents of this agreement have noted, India simply 
lied or diplomatically misled others about its small weapons 
program, which was buried within a larger civilian nuclear 
energy program, and certainly it violated the spirit of 
agreements reached with foreign governments concerning the 
peaceful use of their nuclear assistance. For that, India has 
been subject to 30 years of sanctions.
    Second, in all of these debates among and within--in 
among--in India and between Indian groups, military and civil 
and others, purely military calculations have been notably 
absent. The Indian nuclear program was nurtured by a small 
enclave of scientists and bureaucrats, who were largely 
responsive, not proactive, in their thinking. As George Tanham 
wrote a number of years ago, Indian strategic thought is 
characterized by its lack of interest in military things. There 
was, and remains, a curious blend of extravagant idealism--
epitomized in the many plans for global nuclear disarmament 
generated in India over the years--and Kautilyan-Machiavellian 
realism epitomized by the secrecy surrounding the covert 
weapons program.
    It is my judgment that this initiative need not trigger an 
arms race with Pakistan, nor one between India and China. And 
it's certainly not a green light to India to built a thousand 
or more nuclear weapons. It does provide the United States with 
an opportunity to work with India to help prevent a broader 
nuclear arms race, something that is certainly not in the 
interest of India, Pakistan, China, or America.
    Therefore, I would propose the following steps:
    First, the agreement with India should be folded into 
legislation or policy that would develop criteria that would 
allow other states to enter into such a nuclear halfway house. 
And that halfway house, as I've written since 1990, would 
require a state to fulfill the obligations of a signatory of 
the Nuclear Non-Proliferation Treaty, even if it had tested a 
nuclear weapon or had possessed a nuclear weapon after the 1968 
cutoff date. This halfway house would provide civilian nuclear 
assistance and perhaps strategic relationship in exchange for 
an impeccable horizontal nonproliferation record. Right now, 
India seems to meet most reasonable tests of what this record 
should look like, as does Israel; but Pakistan and North Korea 
do not.
    Second, the administration should undertake an initiative 
that would constrain vertical proliferation via a nuclear 
restraint regime in Asia. This initiative would include India, 
Pakistan, and China. Such a regime need not involve formal 
negotiated limits, which would be very difficult to achieve, 
but certainly could be based on a fissile-material cutoff, 
continued restraint on testing, and limited deployment of 
nuclear weapons--the first two feature in the Indo-U.S. Nuclear 
Initiative, but they need to be made multilateral, especially 
to ward off an arms race between Pakistan and India, or India 
and China.
    Of course, China's decision on renewing testing will be 
shaped by its response to the United States. And I believe that 
we can continue our own ban on tests indefinitely without 
damaging our nuclear preparedness.
    Third, with this agreement in place, New Delhi should feel 
less paranoid about discussing its own nuclear capabilities and 
their interaction with those of other states. As long as India 
felt that the United States was trying to strip it of its 
nuclear weapons program, Indian officials talked on and on 
about global nuclear disarmament, but they refused to discuss 
concrete steps that would enhance India's security through 
cooperative agreements with others.
    For example, under the auspices of the new Indo-U.S. 
Agreement on Science and Technology, the United States should 
work with India in setting up a center to study best practices 
gleaned from the American, Russian/Soviet, and the experience 
of others regarding nuclear and missile technology.
    We should also expect that India will eventually join the 
process of nuclear arms reduction that began with United States 
and Russian nuclear cuts, and, as other panelists have said, 
subscribe to the Wassenaar and Australia Group arrangements.
    We ourselves do not want to continue down the process of 
nuclear arms reduction, only to see some of the new nuclear 
weapons states, such as India and Pakistan, pass us on the way 
up.
    To summarize, while supporting the agreement, I believe 
that it should be treated as an initial step in the process of 
crafting a diplomacy that addresses wider arms control and 
security concerns, not just meeting India's energy needs.
    The agreement does much to repair the torn United States-
Indian strategic relationship. It is important in reshaping and 
revitalizing India's massive energy shortfall, and it has 
already been helpful in our attempt to constrain an Iranian 
program. But this administration, and its successor, with 
congressional assistance, should regard it as a beginning, not 
an end, as far as our nonproliferation and strategic interests 
are concerned.
    Thank you.
    [The prepared statement of Dr. Cohen follows:]

    Prepared Statement of Dr. Stephen P. Cohen, Senior Fellow, The 
                 Brookings Institution, Washington, DC

    Mr. Chairman and members of the committee, thank you for the 
opportunity to share my knowledge of South Asian security, 
nonproliferation and arms control issues as you grapple with this 
important initiative. On balance, the initiative should be welcomed. I 
have argued in print for a nonproliferation halfway house since 1990--
an admittedly imperfect response to an imperfect situation, but far 
better than the status quo. By minor modifications in the proposed 
legislation and changes in American policy the nuclear cooperation 
agreement could be still further improved.
    I am a signatory of a March 10 letter backing the initiative. That 
letter argues that the agreement enhances American strategic interests, 
and if properly implemented, it will advance, not retard, American 
nonproliferation objectives. We also argue that the initiative will 
help India move to an energy strategy that makes it less dependant on 
imported oil and that it will positively address our global 
environmental concerns.
    I was resident in India during many of the major Indian debates 
over its nuclear weapons policy. In 1964-65 it debated its response to 
the Chinese nuclear test at Lop Nor; in 1967-68 it debated whether or 
not to sign the NPT, and in 1974, after its phony ``peaceful nuclear 
explosion,'' India debated whether to weaponize. In the late 1980s 
there was a major debate over the proper response to evidence of a 
Chinese-assisted Pakistani nuclear weapons program. The Rajiv Gandhi 
``Action Plan'' of 1988 was in part a last-minute attempt to forestall 
a response-in-kind to Pakistan's program; in the early 1990s Indians 
grappled with the highly publicized American effort to cap, roll back, 
and eliminate its nuclear weapons program and that of Pakistan. More 
recently, I spent a month in New Delhi observing the Indian debate over 
the Bush-Manmohan Singh initiative.
    There are two major conclusions to draw from this 40-year history:
    First, in most of these cases India was responding to nuclear 
developments elsewhere. It's strategic elite was sharply divide as to 
the utility and morality of nuclear weapons, and until the 1998 tests 
India's policy was one of maintaining an ``option'' or a ``recessed'' 
(i.e. unannounced) deterrent. As opponents of this agreement have 
noted, India simply hid its small weapons program and it certainly 
violated the spirit and the letter of agreements reached with foreign 
governments concerning the peaceful use of nuclear assistance. For that 
India has been subjected to 30 years of sanctions.
    Second, in all of these debates the military, and purely military 
calculations, have been notably absent. The Indian nuclear program was 
nurtured by a small enclave of scientists and bureaucrats who were 
largely responsive, not pro-active in their thinking. As George Tanham 
wrote, Indian strategic thought is characterized by its lack of 
interest in military things. There was (and remains) a curious blend of 
extravagant idealism (epitomized in the many plans for global nuclear 
disarmament generated in India over the years) and Kautilyan-
Machiavellian realism (epitomized by the secrecy that shrouded the 
covert weapons program).
    It is my judgment that this initiative need not trigger an arms 
race with Pakistan, and it is certainly not a green light to India to 
build a thousand or more nuclear weapons. It does provide the United 
States with an opportunity to work with India to help prevent a broader 
nuclear arms race, something that is certainly not in the interest of 
India, Pakistan, China, or America.
    Therefore, I would propose the following steps:
    First, The agreement with India should eventually be folded into 
legislation that would develop criteria that would allow other states 
to enter such a nuclear halfway house. This halfway house would provide 
civilian nuclear assistance in exchange for impeccable horizontal 
nonproliferation record. Right now India seems to meet most reasonable 
tests, as does Israel, but Pakistan and North Korea would not.
    Second, the administration should undertake an initiative that 
would constrain vertical proliferation via a nuclear restraint regime 
in Asia, this initiative would include India, Pakistan, and China. Such 
a regime need not involve formal, negotiated limits, which would be 
very difficult to achieve, but certainly could be based upon a fissile 
material cutoff, continued restraint on testing, and limited deployment 
of weapons. The first two feature in the United States-India nuclear 
initiative, but they need to be made multilateral, especially to ward 
off an arms race between Pakistan and India. Of course, China's 
decision on renewing testing will be shaped by its response to the 
United States, and I believe that we can continue our own ban on tests 
indefinitely without damaging nuclear preparedness.
    Third, with this agreement in place, New Delhi should feel less 
paranoid about discussing its own nuclear capabilities and their 
interaction with those of other states. As long as India felt that the 
United States was trying to strip it of its weapons program, Indian 
officials talked on endlessly about global nuclear disarmament, but 
they refused to discuss concrete steps that would enhance India's 
security through cooperative agreements with others. Indeed, the 
Indians are still reluctant to allow their country to be the venue for 
such discussions by nongovernment organizations, unless they are 
strictly scripted. Under the auspices of the new Indo-U.S. Agreement on 
Science and Technology the United States should assist India in setting 
up a center to study ``best practices'' gleaned from the American and 
Russian/Soviet nuclear and missile experience, and the experience of 
other states. We should also expect that India will eventually join the 
process of nuclear arms reduction that began with United States and 
Russian nuclear cuts; I am disappointed that such a long-term goal was 
not even mentioned in the various United States-Indian communiques, we 
do not want to continue down the road of arms reduction only to see 
some of the new nuclear weapons states such as India and Pakistan pass 
us on their way up.
    To summarize, while supporting the agreement I believe that it 
should be the initial step in a process of crafting a diplomacy that 
addresses wider complex arms control and security concerns, not just 
meeting India's energy needs. America has such concerns in an area that 
stretches from Israel to China; this includes at least five states that 
have nuclear weapons and two that may be trying to acquire them. This 
agreement does much to repair the torn United States-Indian strategic 
tie, it is important in reshaping and revitalizing India's massive 
energy shortfall, and it has already been helpful in our attempt to 
constrain an Iranian program, but this administration and its 
successor--with congressional assistance--should regard it as a 
beginning, not an end as far as our nonproliferation and strategic 
interests are concerned.

    The Chairman. Well, thank you very much, Dr. Cohen.
    Let me just indicate that some of you have discussed other 
steps that need to be taken, and the sequence of doing this 
differs. But what assurance do we have, Dr. Einhorn, that if 
India, China, and Pakistan were to attempt to find agreement 
that they would not test further, or they would not produce any 
further fissile material, that all three would agree to that? 
Is it not equally probable that each of the three, on the basis 
of its defense situation, maybe against the other two, quite 
apart from the rest of the world, would want to have the 
option, in terms of national sovereignty, of remaining out of 
the picture? In other words, if we're to try to get this 
agreement before we satisfy our India-United States situation, 
might that not be a long time coming, or might it ever come? 
And, in the meanwhile, some have testified that we may not 
fracture the relationship with India, but we'd certainly set it 
back. We would not be able to get to the status quo ante. How 
do you respond to these sequencing situations?
    Mr. Einhorn. Mr. Chairman, I think this is a critical line 
of discussion. The only way we're going to know--find the 
answer to your question is to test it out diplomatically, to 
pursue this, make this an important objective of U.S. 
diplomacy.
    China, we believe, stopped producing fissile material some 
time ago. It hasn't made a commitment that it'll never resume 
production, but we believe they are not producing. And they're 
not testing. Nobody is testing today.
    Pakistan has proposed, to India, a bilateral strategic 
restraint regime, one element of which may be a ban on further 
production of fissile material. I think their proposal is too 
broad. I don't think it's realistic, as a bilateral measure. 
But I think one can imagine, if India is genuinely prepared to 
say, ``Enough is enough,'' and China is also prepared to say, 
``Enough is enough,'' in terms of fissile-material production, 
I think it's reasonable to assume that Pakistan would go along. 
But I think it would be critical, whether you're talking about 
a moratorium on nuclear testing or a suspension of fissile-
material production, that all three of these governments go 
along.
    I think it's very possible that if the United States were 
really serious about pushing this, it could be achieved, and it 
could be achieved in a reasonably short period of time.
    The Chairman. Well, now, to what extent is there an 
interlocking problem with the Six-Party negotiations in dealing 
with North Korea now? For example, some have suggested that if 
the six are not successful in reaching an agreement--namely, 
the North Koreans continue to pursue a program--that perhaps 
others, out of self-defense in the area--Japan is often 
mentioned; South Korea has been mentioned here today--may want 
to develop programs, in their own defense. Well, we've been at 
these talks for quite a while. And the President's had, I 
gather, brief conversations with President Hu Jintao, when he 
was here. Many people characterize the Chinese as not 
complacent about the status quo, but, on the other hand, not 
totally uncomfortable about that situation. But it could be 
that while everybody is not very uncomfortable, that North 
Koreans continue to proceed, at which point then it's not just 
the problem of signing up India and Pakistan and China, but a 
much broader breakout of the whole situation.
    I raise this not to deter the thought that North Korea 
should stop; that, in essence, China might be more helpful. A 
lot of people might be more helpful. But, let's say China 
itself misgauges this, and Japan starts a program. The South 
Koreans, and perhaps the Chinese, have been quiescent, but they 
might not remain that way. I get back to the point: Is there 
enough value, in terms of the relationship situation with 
India, that has been mentioned before, including the commercial 
side, that that should not be denigrated? This is a very large 
agreement, the nuclear being, by far, the most interesting 
aspect that has generated excitement. But is there enough value 
in it, in terms of a relationship, leaving aside the 
nonproliferation situations, to, if we are to err, err on the 
side of moving toward the acceptance?
    Mr. Einhorn. Well----
    The Chairman. Go ahead.
    Mr. Einhorn. OK. I think there is value in the strategic 
relationship. And nobody has disputed that, in either panel. 
The question is: What is India prepared to do? You know, India 
has achieved all of its objectives in this negotiation. It 
can--you know, with this deal, it can buy uranium and nuclear 
reactors on the world market, it's gained acceptance as a 
nuclear weapons state in all consequential respects, and it's 
got freedom of action to produce more plutonium for weapons.
    We've had to compromise quite a bit--the United States has 
had to compromise its principles quite a bit in order to get 
this deal. I think we are entitled to ask India to compromise a 
bit, too.
    Now, if it really means it when it said it's prepared to 
work with the United States to work out a treaty to stop 
producing fissile material for nuclear weapons, we should hold 
them to that, and we should ask them to accept the same kinds 
of restraints that the original five nuclear powers have 
accepted.
    On the question of North Korea, we could still pursue a 
moratorium involving China, Pakistan, India, and the others--
United States, United Kingdom, France, and Russia--without 
reference to North Korea. It need not be a moratorium that 
would hold for all time. I mean, obviously, China would be 
concerned if Japan reacted to the North Korean situation by 
requiring a nuclear deterrent of its own. And that might affect 
Chinese strategic calculations. But, for the time being, I 
think you can separate out the North Korean problem from what 
you see in southern Asia. And I think you can pursue, and we 
should pursue, restraints, both in nuclear testing and fissile-
material production.
    The Chairman. Dr. Milhollin, why would Dr. ElBaradei, in 
the IAEA, be supportive of this arrangement? You know, 
essentially, they are, apparently. But is this a surprise to 
you, or does it make any difference, one way or another?
    Dr. Milhollin. Well, I think to evaluate his position you 
have to look at the posture of his agency. If somebody in the 
world offers to put additional reactors under inspection, he's 
not going to stand up and say, ``No, I don't want to inspect 
those reactors unless you let me inspect all of your 
reactors.'' That's not part of his mandate. His agency is there 
to serve, when asked to serve. And so, in this case they're 
being asked to inspect additional reactors. Now, that's really 
the only role that he properly has.
    I must say that it's not really an appropriate question to 
ask his agency--that is, whether, from a political, diplomatic, 
strategic perspective, he approves or disapproves of this 
arrangement. It's not really part of his portfolio. His 
portfolio is to do inspections for reactors that countries 
agree to put under inspection. And I think if you just look at 
it that way, his answer has to be, ``Yes,'' that--``Yes, of 
course, we'll inspect them.''
    The Chairman. Leaving aside his vocational interest in 
inspecting, what about, say, countries, like France or Germany 
or England? Why would they be in favor of this new arrangement 
with the United States and India?
    Dr. Milhollin. Well, you have to look at it after the 
United States has made its declaration. That is, if the United 
States declares, ``Yes, we're going to trade with India. We're 
going to get into the reactor market,'' it's pretty hard to 
imagine that the French or the Russians are going to say, 
``Well, gee, we're not interested.'' We've always been the 
king, in terms of nonproliferation, in the world. We've set the 
standard. And so, nobody's going to be more royalist than us. 
Once we decide that we're going to trade with somebody, 
everybody else has to jump in. They have industries. They don't 
want to lose markets. It's just a natural aspect of capitalism.
    The Chairman. Well, it sounds like a rather anarchic 
situation--
    [Laughter.]
    The Chairman [continuing]. Almost a growth industry created 
by people wanting to furnish all this.
    Dr. Milhollin. So far, there's been restraint, because 
there has been an international agreement to restrain. But once 
somebody breaks that agreement, then it's a free-for-all, as 
you very correctly point out.
    The Chairman. Secretary Lehman, even if all these countries 
suddenly want to supply India, India apparently has taken the 
position that they don't want to sign an absolute restraint of 
their activities. On the other hand, as many have pointed out, 
they have had reasonably good behavior in the regime for 
several years, and there would not appear to be particularly 
good reasons why they would want to accelerate their 
activities. But let's say that there was an inclination of a 
few people in India--after all, this is a controversial issue 
in India, not just with parliamentarians, but with people who 
are nuclear experts and maybe have a vested interest in this--
if we have this new relationship with India--and maybe it's 
been overstated, but, nevertheless, the United States and India 
really have a rapport now, which is considerable, on many 
fronts--is there not greater possibility that we will have some 
influence--by that, I mean the United States, quite apart from 
the nonproliferation regime--in terms of plans about India? Or 
do you feel that, essentially, as has been suggested, India got 
all that it wanted from this situation, sort of, freestyle from 
here on, and they're delighted that we're moving along with 
them, that there's not really a sense here of cooperation or 
restraint?
    Dr. Lehman. Mr. Chairman, let me consider several cases. 
The case in which we--the administration had not negotiated 
this new approach that involves civil nuclear cooperation, many 
of the strategic partnership elements would probably have 
proceeded anyway. Much of the business would be unconstrained. 
Some of the strategic interests are so common and so clear that 
those would have proceeded.
    On the other hand, the negotiation has taken place. There 
is an agreement to proceed on a certain path. If this breaks 
down, I think we will have a period in which things that would 
have receded anyway will be delayed, disrupted, distorted in 
the near term, but, in the long run, eventually they'll start 
to reemerge.
    But that's--neither of those is the case. Where we are now 
is that there is an agreement. And the question, then, is: How 
do we shape that and optimize it, and, as I've said, and 
include nonproliferation as a central element of that goal?
    I think that civil nuclear cooperation is important, 
because it permits us, then, to have a much closer relationship 
in dealing with the implementation details that are very 
important.
    So, for example, let's take one that's very important to 
everybody at this table and the previous panel, the fissile-
material cutoff. India has long said it favors it. It's one of 
the godfathers of the program. It's been in practically every 
one of their public declarations for many, many years. They 
even cosponsored a U.N. resolution with the previous 
administration in support of it. Why doesn't it happen? Well, 
the answer is that the domestic politics and the regional 
situation involving India have really not given--not created 
the conditions where they were really prepared to go ahead. I 
think now if we engage with them on this, we have an 
opportunity to shape those conditions.
    Now, I have to tell you that it is wonderful that India is 
this great democracy that everybody is talking about, but it 
does have its downsides. And one of the downsides is that 
partisan politics gets awfully nasty. And often, positions are 
defined by parties as, ``Whatever my opponent is for, I must 
have to be against.'' That being the case, we have to be a bit 
sophisticated in how we proceed. It's--I don't want to quite 
say that if the United States says India ought to do something, 
that India will automatically do the opposite, but I think you 
have to take into account the domestic politics and how we move 
ahead.
    But Indians have said, for many years, they support an 
FMCT. Many Indians have said they've got enough. China says 
it's got enough. Do the Pakistanis have enough? Maybe now is 
the time.
    The Chairman. Well, gentlemen, I thank you very, very much.
    Sadly, another vote has intruded. This one is a 10-minute 
vote, and we're halfway into it. But you have been very 
patient, and given us well over 3 hours of remarkable service.
    And I thank you for your testimony and your preparation for 
this and your responses. And we look forward to staying closely 
in touch with all of you.
    Thank you very much, and this hearing is adjourned.
    [Whereupon, at 12:42 p.m., the hearing was adjourned.]
                              ----------                              


       Additional Questions and Answers Submitted for the Record

[Note.--Senator Joseph Biden submitted 15 questions to the witnesses. 
Questions 1-13 were addressed to all the witnesses, each of whom was 
invited to answer only the questions he wished to answer. Question 14 
was addressed only to Secretary Perry, Ambassador Gallucci, Dr. Carter, 
and Dr. Einhorn. Question 15 was to Dr. Cohen. If their testimony 
already answered a question, there was no need to repeat it.]

  Responses of Gary Milhollin to Questions Submitted by Senator Biden

    Questions 1 and 2. Are we right, or are we wrong, to seek a new 
status for India with respect to the Nuclear Non-Proliferation Treaty? 
If we are right, then should we treat India as a nuclear weapons state 
under the treaty, as a nonnuclear weapons state, or as something in 
between? If the answer is something in between, then what should that 
be? What standards should we set for India, and what rewards should be 
provided for India's meeting those standards?

    Answer. India is officially a nonnuclear weapon state under the 
Nuclear Non-proliferation Treaty, which defines such a state as one 
that has not ``manufactured and exploded a nuclear weapon or other 
nuclear explosive device prior to 1 January 1967.'' Thus, India's 
status cannot be changed without amending the treaty. The United 
States, as a member of the treaty, is obliged to recognize the 
definition, and to treat India in a manner in accordance with the 
treaty--that is, as a nonnuclear weapon state.
    Under the administration's plan, India would be treated better than 
both nuclear weapon states and nonnuclear weapon states. Nuclear weapon 
states are forbidden under the treaty (article 1) to assist any 
nonnuclear weapon state to acquire a nuclear weapon. This is a treaty 
obligation that India does not have. Also, nuclear weapon states have 
stopped producing fissile material for nuclear weapons, something that 
India will not be required to do and does not intend to do. Thus, India 
will be treated better than any nuclear weapon state under the 
administration's plan.
    Nonnuclear weapon states under the treaty are required to forswear 
nuclear weapons, something India has not done and does not intend to 
do, and nonnuclear weapon states are obliged under the treaty to accept 
``full-scope'' inspections that India does not accept and does not 
intend to accept. Also, both nuclear weapon and nonnuclear weapon 
states are obliged under article 3 of the treaty to restrict their 
nuclear exports, an obligation that does not apply to India because 
India is not a treaty member. Thus, India will also be treated better 
than any nonnuclear weapon state.
    It follows from the two points above that under the 
administration's plan, the United States will, in nuclear matters, 
treat India better than any other country in the world. This treatment 
is not justified by India's promise to put a portion of its nuclear 
reactors under inspection. The portion exempted from inspection will 
produce more plutonium than India will ever need for nuclear weapons. 
Thus, India's promise regarding inspections is illusory. Nor is the 
favorable U.S. treatment of India justified by India's promise to 
refrain from testing nuclear weapons. This promise is not made under 
any treaty obligation; it is only voluntary and not binding. Nor is the 
favorable treatment justified by India's steps to establish export 
controls, which are still new in India and untested. India has 
consistently tried to evade export controls when they have been applied 
by other countries, including the United States.

    Question 3. How great is the risk that the administration's nuclear 
deal with India will indirectly help India's nuclear weapons program, 
by relieving India of the need to choose between guns and butter in its 
use of its domestic uranium resources; lead other countries to decide 
that they, too, can develop nuclear weapons and endure the world's 
reaction, because it will be only temporary; produce increased 
instability in South Asia, due either to India's increased plutonium 
production or to its greater capability for plutonium production, even 
if it does not make use of that capability; lead other nuclear 
suppliers to trade with their clients that have nuclear weapons; or 
lead the rest of the world to reject nonproliferation measures that 
require any economic sacrifice, because they view nonproliferation as 
embodying too great a double standard?

    Answer. This question is answered in my testimony, which describes 
the risks to worldwide export controls and nonproliferation efforts 
that the administration's plan would produce.

    Question 4. How can we maximize such benefits of the nuclear deal 
as increased energy for India, produced in an economically rational 
manner; limiting India's increased demands in world oil and gas 
markets; and India's transition from an aggrieved nonaligned state to a 
stakeholder in the international system and in the world's 
nonproliferation regimes?

    Answer. The proposed nuclear deal will not increase India's energy 
output to any significant extent. The reason is that nuclear power 
supplies only about 2 percent of India's electricity, which in turn is 
but a small fraction of India's overall energy consumption. Even if 
India's nuclear power output could be increased by 50 percent (which 
seems unlikely) such a step would only increase India's overall 
electricity output by 1 percent at most, and would only increase 
India's overall energy output by a fraction of 1 percent. That is not a 
significant increase in the energy available to India, and thus would 
not reduce India's demand for oil and gas.
    India is not an aggrieved state. India decided to pursue nuclear 
weapons with full knowledge of the cost such a decision would have on 
its diplomatic standing. India's calculation was that nuclear weapons 
would increase its prestige in the world more than it would lower it. 
India has been content to live with that decision; so should we.

    Question 5. There is some uncertainty as to what India will 
actually do under the nuclear agreement. Should Congress hedge against 
unexpected Indian behavior? For example, should we require annual 
reports on how the deal is going? Should the deal end if India tests a 
nuclear device, or diverts nuclear technology to its weapons program, 
or violates or ends its safeguards agreements, or proliferates to 
another country? Should Congress revisit the agreement every 5 years, 
to see whether it is still in our national interest?

    Answer. The best, and, in fact, the only way for Congress to learn 
the details of what India will actually do, or promise to do, under the 
proposed nuclear deal is to wait until an agreement for nuclear 
cooperation is made. Once an agreement is presented for consideration, 
Congress can add any conditions to the agreement that seem warranted. 
Congress has never approved an agreement for cooperation without seeing 
the actual agreement. There is no reason to start doing so now.

    Question 6. If we go ahead with the India nuclear deal, we will 
want to assure a level playing field for U.S. industry. Should we 
require that any changes in Nuclear Suppliers Group guidelines conform 
to the nonproliferation standards that we establish for the United 
States? Should we require that NSG guideline changes not enter into 
effect until our peaceful nuclear cooperation agreement with India 
enters into effect, so that firms in other countries don't get to sell 
things months before our firms do?

    Answer. Other suppliers have already reacted to the 
administration's plan. Russia has just sold fissile material to India's 
Tarapur reactors without notifying the NSG. Russia dared to do so only 
because the United States-India deal had been announced.
    The problem of undercutting by other suppliers could have been 
avoided if the administration had followed the procedures laid out by 
existing U.S. law. Consistent with those procedures, the administration 
could have informed other suppliers that the United States would take 
no action until an agreement for cooperation with India had been 
negotiated, until it had been approved by Congress, and until it had 
been blessed by the NSG. That way, the line would be held in the NSG 
until American companies were authorized to compete. By trying to short 
circuit the process, the administration has made it more likely that 
American companies will be outmaneuvered by foreign competition.
    Neither Congress nor the administration can require unilaterally 
that NSG guidelines conform to changes in U.S. nonproliferation 
standards. The only way to reduce the risk of American companies being 
caught short is to follow the procedures prescribed by existing law, as 
stated above. This can still be done by informing the other NSG members 
that no change in U.S. export control behavior will occur until an 
agreement for cooperation is made with India, until Congress approves 
such an agreement, and until the NSG, itself, decides to change its 
guidelines to conform to the agreement. This approach has the best 
chance of holding the line in the NSG until American companies are free 
to sell.

    Question 7. Should we require that the administration obtain any 
changes in NSG guidelines through the regular process, which requires 
consensus?

    Answer. Yes. If the United States changes its export policy without 
the consent of the NSG, there will be grave harm to worldwide export 
controls. This harm would far exceed any benefit from the deal with 
India. In fact, if the administration implements the India deal without 
consensus in the NSG, the regime would suffer a loss in credibility 
from which it probably could not recover.

    Questions 8 and 9. India is willing to cap its fissile material 
production in an international treaty, but not unilaterally. Many 
people believe that the United States is the party that is holding up 
progress on a Fissile Material Cut-off Treaty, by refusing to accept 
the existing mandate in the Conference on Disarmament to negotiate a 
treaty with verification provisions. Should Congress require that FMCT 
negotiations begin, under a Conference of Disarmament mandate, before 
the President can waive the law for India?
    Several witnesses suggested that a moratorium on fissile material 
production for nuclear weapons purposes, either regional or also 
including the five recognized nuclear weapons states, might be a 
feasible objective. One witness added that in the context of the United 
States-India nuclear deal, India should be more open to transparency 
about its nuclear objectives and should look ahead to eventual nuclear 
arms reduction. Should Congress require that the executive branch 
pursue these initiatives and report regularly on its progress?

    Answer. India's statement that it would be willing to cap its 
fissile material production is similar to its statement, reiterated 
numerous times, that it would be willing to give up nuclear weapons if 
everyone else did so. India knows very well that a fissile material 
cut-off treaty is not much more likely to happen than everyone giving 
up nuclear weapons. Thus, its offer to cap production as part of such a 
treaty should be considered as rhetorical.
    If India were serious about capping its fissile material production 
it could do so unilaterally, as all five nuclear weapon states under 
the NPT have done. Nothing stops India from doing so tomorrow. This 
would seem a reasonable step for a country that desires to be treated 
as a nuclear weapon state, that considers itself to be a nuclear weapon 
state, and that claims only to want enough nuclear weapons for a 
minimal deterrent. India already has enough weapons for such a 
deterrent against China, which has capped its fissile material 
production, and against Pakistan, which would probably cap its fissile 
material production if India did so. Thus, there is no reason for India 
not to agree to such a cap now, unless India has nuclear ambitions that 
transcend its region.

    Questions 10 and 11. Should Congress limit the scope of U.S. 
nuclear fuel assurances to India, so as to maintain U.S. ability to 
impose effective nonproliferation sanctions or to abide by sanctions 
that the U.N. Security Council might impose someday?
    Has India really accepted safeguards in perpetuity, or will 
``India-specific safeguards'' turn out to be something less? Should 
Congress require that safeguards really be in perpetuity, e.g., that 
India not be allowed to suspend safeguards if there is an interruption 
in nuclear fuel supplies? Should Congress require that safeguards apply 
to a reactor's fuel or spent fuel after its removal from the reactor, 
and not just to the reactor itself?

    Answer. These two questions concern the rights the United States 
should reserve in any agreement for cooperation with India. 
Fortunately, an excellent enumeration of such rights is already 
contained in the Atomic Energy Act, which presents criteria for nuclear 
cooperation that were carefully thought out by the experts who drafted 
that law. Those criteria contain the rights, including those specific 
to fuel supply and international inspections, the United States should 
insist upon in any new agreement with India.
    As stated above, the best way for Congress to insure that the 
agreement guarantees essential U.S. rights is to withhold approval 
until Congress can see the agreement that is actually negotiated. There 
are numerous issues of great importance, including the ones the 
questions mention, that cannot all be foreseen at this time. It is 
prudent for Congress to reserve judgement until it can actually see 
whether there are gaps in the actual agreement.

    Question 12. India has said that it accepts the responsibilities of 
a state with an advanced nuclear program. Should Congress require that 
India bind itself to the responsibilities contained in article I of the 
Nuclear Non-Proliferation Treaty, not to help other states to get 
nuclear weapons?

    Answer. Yes. If India is negotiating in good faith, it should be 
willing to accept such an obligation.

    Question 13. India's nuclear separation plan is to be phased in 
over an 8-year period. Should the world's nuclear trade with India be 
phased in, as well? If so, how? Should there be no sales involving a 
given facility until safeguards have entered into effect, or until 
India has provided the plans for a new facility to the IAEA?

    Answer. Article 3 of the Nuclear Non-proliferation Treaty forbids 
the sale of ``source or special fissionable material,'' or items 
``especially designed and prepared'' for producing special fissionable 
material to a nonnuclear weapon state such as India unless the sale 
triggers international inspection. Thus, no sale by a treaty member of 
such ``trigger list'' items to an uninspected facility in India can 
take place without breaching the treaty.
    Dual-use items are not subject to such a restriction, however, so 
once a green light is given to nuclear cooperation, a flood of 
previously controlled dual-use items is likely to go to India at once, 
regardless of the separation schedule for the reactors.
    At India's present stage of development, dual-use items could be of 
greater help in making nuclear weapons than will be additional 
fissionable material or additional reactors. Dual-use equipment is what 
one needs to miniaturize nuclear warheads to fit on longer range 
missiles, and to make the missiles themselves more accurate and 
powerful. India is now trying to do both, and will profit enormously in 
weapon development from being able to buy such equipment--for the first 
time--without restriction.
                                 ______
                                 

Response of Hon. Robert Gallucci to Question Submitted by Senator Biden

    Question 14. You have worked on real-world nonproliferation cases, 
and you have dealt with the need for other countries to support us on 
those cases. Should we worry that the India nuclear deal will undermine 
that support on an issue like whether to sanction Iran? How much weight 
should we give to European editorials that criticize our so-called 
``double standard'' on India and Iran, or to recent reports that 
officials in Southeast Asian countries are talking in similar terms.

    Answer.
                                                       18 May 2006.
Hon. Joseph R. Biden, Jr.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
    Dear Senator Biden: Thank you for giving me the opportunity to 
expand on my testimony before the Senator Foreign Relations Committee 
on 25 April 2006 by providing the questions contained in your 
memorandum of 2 May 2006.
    Some of the questions I had already tried to address in my 
testimony, and many of the others, I think, were or would be better 
addressed by others. However, in a general way, I do want to comment on 
a couple of themes that run through the questions, and then 
specifically respond to Question 14, which you address to four of us by 
name.
    The first theme has to do with the status of India and the Nuclear 
Non-Proliferation Treaty.
    I think it would be dangerous to ever change the basic 
understanding that has been universally accepted in the international 
community: There are only five legitimate nuclear weapons states. If 
Israel, India, and Pakistan (and perhaps North Korea) have nuclear 
weapons, they may not be in violation of the NPT, but they do not have 
the standing in the international community that make them eligible for 
nuclear cooperation, they have unsafeguarded nuclear facilities and 
they are not legitimate nuclear weapons states. To discard that 
standard is to open the door to the slow, steady spread of nuclear 
weapons around the world.
    All the talk about recognizing that the world has changed, and that 
the NPT has been overtaken by events in the 21st century is, in my 
view, dangerous nonsense that does not stand up to analysis. This 
administration and the U.S. Congress, are on the verge of trashing an 
international norm that is, at least, partly responsible for preserving 
a world with only a few nuclear weapons states, when we could and will 
have dozens more if we are not careful.
    In my testimony, I advocated undercutting the norm against nuclear 
cooperation with a state such as India only if New Delhi accepted a 
verified freeze on its fissile material production for weapons, 
abandoned nuclear explosive testing and agreed to the highest standards 
in its export policies. This would still be short of the full-scope 
safeguards standards and thus departs from that critical norm we have 
worked so hard to have accepted. However, I think it could be a 
justified move because of the material benefits, in the form of 
verified restraint on India's nuclear weapons program, that would 
result. To make that move for anything less will be correctly seen as a 
cynical, short-term calculation by the United States to improve its 
bilateral relations with India.
    A second theme is the additional provision and requirements that 
may be added to the argument with India, from New Delhi's position on 
the FMCT to its commitment to forego further nuclear explosive testing. 
In general, I would favor all substantive provisions that would tend to 
limit India's nuclear weapons development program and bind India to the 
various elements of the nonproliferation regime. It is not clear to me 
that any truly substantive amendment of the deal as described would be 
acceptable to India, but that, in my view, only suggests that the deal 
should not stand as negotiated.
    Finally, on Question 14, there is the issue of the cost in 
credibility and effectiveness that the United States will pay with 
other countries on other nuclear proliferation related issues, if it 
makes this deal with India. I do not think that there is any question 
that we will confront the charge of double standard or, more generally, 
that the United States has abandoned the NPT and the international 
regime that surrounds it for a unilateralist approach to proliferation, 
consistent with its attitude on other issues of international security. 
In real political terms, this will likely make it harder for the United 
States to lead the international community in efforts to deal with Iran 
and North Korea, and certainly handicap us if, as predicted, we find 
new countries in Asia, the Middle East, or even Latin America moving to 
develop a nuclear weapons option.
            Sincerely,
                             Ambassador Robert L. Gallucci,
                   Dean, Edmund A. Walsh School of Foreign Service.
                                 ______
                                 

 Responses of Stephen P. Cohen to Questions Submitted by Senator Biden

    Question 1. Are we right or wrong to seek a new status for India 
with respect to the NPT?

    Answer. We are right to do so, and India should be treated as a 
nuclear weapons state (NWS). An analogy is the recent bill for amnesty 
and the regularization of illegal immigrants: India has had to wait; it 
will have to demonstrate that it will be a responsible NWS; and it will 
receive no special advantage, but its fundamental status will change. I 
don't think the administration has thought this out carefully, as it 
still insists that India will not be a ``nuclear weapons state'' under 
the treaty.

    Question 2. What standards should India meet?

    Answer. The test should not be the safeguarding of reactors (India 
will have more reactors under safeguard than all the NWS combined); 
that really is an irrelevant issue. We should be more concerned about 
India's behavior in terms of cooperation on nonproliferation 
(membership and adherence to various regimes), and its restraint in 
terms of developing a nuclear arsenal in such a way that it does not 
trigger an arms race with its neighbors.

    Question 3. What is the risk that the ``deal'' will indirectly help 
the Indian military nuclear program, suggest to other countries that 
they, too, can develop nuclear weapons, and increase instability in 
South Asia?

    Answer. There obviously is some risk, but as I noted in my 
testimony India is unlikely to build a very big arsenal (its nuclear 
policy has been entirely reactive, not based upon some master plan to 
become a major NWS). The incentives of other states will be region and 
situation specific. India has provided the rhetoric to justify other 
states wanting to become NWS (especially for Iran and North Korea), but 
their circumstances drive them toward nuclear weapons quite 
independently of the Indian example; the South Asian case can be met by 
active diplomacy that would urge all states to do what is in their 
interest anyway--void an open-ended nuclear arms race. Here India 
should be encouraged to take the lead as a ``responsible'' new NWS.

    Question 4. How can we maximize energy and economic benefits of the 
deal while encouraging India's transition to a stakeholder in the 
international system and global nonproliferation regimes?

    Answer. It is in India's economic interest to be seen as a 
responsible global stakeholder; this will shape, on the margins, the 
willingness of many important companies to invest in India (its 
democratic politics and internationally moderate positions are part of 
its comparative advantage vis-a-vis China for many investors). The 
United States should continue to stress the importance of India's 
membership in such regimes, and link this to the argument that a 
globally engaged and responsible India is a good place to put American 
investments. These investments could include civilian nuclear 
technology; while the French and Russians may be less concerned about 
such matters; Japan certainly is, and there are plans for Japanese 
investment in the Indian civilian nuclear industry.

    Question 5. There is uncertainty about what India will actually do 
if the deal is consummated. What should Congress do to ensure 
compliance?

    Answer. I'd concur with the suggestion that regular reports be 
generated by the executive branch. These could provide information 
regarding Indian compliance. India, of course, may do its own reports, 
measuring American compliance. There is bound to be slippage and 
disagreement on both sides, Congress cannot negotiate these, but it 
certainly can seek reassurance that the overall framework is intact. As 
for testing, there may be circumstances when we would want to overlook 
Indian tests (perhaps following Chinese or Pakistani tests, or American 
ones), but at that point the least of our worries will be a small and 
still unproven Indian nuclear arsenal. Our arms control and strategic 
diplomacy should ensure that we do not reach a point where major (and 
minor) states regard nuclear testing as in their interest.

    Question 9. Should Congress request that the executive branch 
pursue a FMCT moratorium on a regional or five-NWS basis, and report 
regularly on its progress.

    Answer. Yes, this would be desirable, and I hope that there will be 
a more accommodating executive branch on such initiatives in the next 
few years.

    Question 10. Should Congress limit the scope of U.S. nuclear fuel 
assurances to India, or abide by UNSC sanctions that might some day be 
imposed?

    Answer. Definitely not. I don't expect India to violate the 
agreement--there are many ways in which compliance can be assured 
through normal diplomacy. A UNSC sanction could only flow from some 
catastrophic event (an India-Pakistan nuclear war?), fuel supplies, in 
such a case, would be the least of our concerns; we cannot prejudge who 
will be right and who will wrong.

    Question 11. Should Congress require that safeguards be in 
perpetuity and should Congress bind India to article I of the NPT, (not 
to help other states get nuclear weapons?)

    Answer. Both of these are reasonable requests, and as I read the 
two communiques and Indian public statements, it appears that India has 
agreed to them. Certainly, adherence to article I, in spirit, is 
essential. More broadly, it is our responsibility, as a great power, to 
pursue diplomacy which will ensure that a situation in which India 
might be tempted to assist another state to go nuclear never arises.

    Question 12. Should Congress require that India bind itself to the 
responsibilities of article I?

    Answer. This, and the policy suggested in Question 11, are 
unobjectionable, but largely are ``feel good'' amendments. In my 
judgment, India has already made such commitments; it should have no 
trouble in reiterating them publicly, but I doubt whether the Indian 
Government will want to, itself, report back to Congress. Indian 
compliance with its own pledges and promises might best be monitored by 
the executive branch, which can periodically report to Congress.

    Question 13. India's plan to separate military and civilian 
facilities will be phased in over an 8-year period; should civilian 
nuclear assistance also be phased in, and should there be no sales 
until India has provided plans for a new facility to the IAEA?

    Answer. On both questions, yes. It will take at least 5 years to 
build a nuclear plant in any case, and I see no reason why sales should 
not wait until the IAEA approves the plan for a new facility.

    Question 15. Based on your contacts with the Indian nuclear and 
strategic community, would you still favor this deal if you did not 
have confidence that India is unlikely to exercise its ``maximum 
rights'' to increase its production of fissile material?

    Answer. I would not favor the deal if I believed that India sought 
to become a ``major'' nuclear power, i.e., develop forces larger than 
those of, say, China, and were it to build a nuclear delivery system 
that would enable it to strike targets in Europe or America. At the 
moment, the Indian strategic and nuclear communities would not favor 
such a capability, but I would be alarmed if circumstances were to lead 
to such a policy. My confidence in the modesty of Indian plans rests 
upon some assumptions about India as a state (democratic, secular, 
globally interconnected culturally and economically, and not eager to 
enter into an arms race with major strategic rivals). A very different 
India cannot be ruled out entirely (after all, India was under 
authoritarian rule for 18 months during the period of the Emergency 
under Mrs. Gandhi), but I would regard such an India as very unlikely 
for the foreseeable future. Hence, my conclusion that our recognition 
of India as a NWS, and support for its civilian nuclear progam, if 
coupled with a renewed arms control diplomacy, will be to our 
advantage, especially if we can persuade India to become a partner in 
such diplomacy. The deal makes such a partnership possible, although it 
does not ensure it.

                                 

      
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