Press Briefing by Under Secretary of State for Political Affairs Nick Burns

Maurya Sheraton Hotel and Towers

New Delhi, India

3:32 P.M. (Local)

UNDER SECRETARY BURNS: Good afternoon. I'll be happy to say a few words about the civil nuclear agreement that was agreed to today by President Bush and Prime Minister Singh. Let me just take you through that agreement, what it says, why we decided to initiate it, and then I'll be happy to answer your questions.

We believe that this agreement represents an historic step forward for both India and the United States. In its largest sense, in the geopolitical sense, the agreement today removes a basic irritant in the relations between India and the United States over the last 30 years and allows both of our countries now to engage in a high degree of civil nuclear energy cooperation for the future.

I think there are two main benefits of the agreement -- the first concerns nonproliferation. For 30 years India has been outside the international nonproliferation system. It's been under sanction; it's not been allowed to trade in civil nuclear energy technology for its nuclear power structure -- its civil nuclear power structure -- with any other country. And India has agreed in this initiative that it will open up its system to international inspection. And we have agreed that Western -- American firms and other firms will be able to invest in India's nuclear technology.

The gain for nonproliferation is that we have never had a way to have an impact, even insight, a transparent insight into India's nuclear program; now we will have that. There's a second -- and a secondary gain, and that is that full civil nuclear trade will ensue. And that means that there will be opportunities for American firms, as well as other firms, to bring the latest in technology in the nuclear power industry to the nuclear establishment here in India.

As you know, as the Prime Minister talked about this morning, the President did, as well, energy is one of the major issues here affecting India's future growth. It's a country of a billion people; it has enormous energy requirements. Nuclear power, civil nuclear power is not going to be the panacea to address that problem, but it's a major part of it.

The understanding that we reached today with the Indians was reached after eight months of negotiation. You'll remember that President Bush and Secretary Rice set out the vision in the spring of 2005 that we ought to find a way forward to begin, after 30 years, a new relationship in civil nuclear energy. When the Prime Minister visited the White House on July 18, 2005, there was a basic agreement that we would head in this direction, but that agreement had to be filled out, it had to be written down, and it, effectively, had to be implemented, and so we had eight months of negotiations, very intensive negotiations, both here in India, in the United States, in countries in between, and those negotiations finished this morning, which allowed the President and Prime Minister to make their announcement.

The practical aspect is this: India has agreed as of this -- because of this agreement to open up a majority of its nuclear power reactors and its associated nuclear facilities to permanent IAEA -- International Atomic Energy Agency -- safeguards. Since the establishment of the Indian nuclear program in 1974, there has been no international oversight, and now the majority of India's program will be under supervision of the International Agency.

Second, India, for the very first time in 30 years, has accepted new nonproliferation obligations. It has now passed a national export control law, which will bring its legal requirements into international conformance. It has committed to refrain from transferring any of its nuclear technologies. It has reasserted its commitment to maintain a unilateral moratorium of nuclear testing, and it has agreed to work with the United States towards a fissile material cutoff treaty. These are gains that were not possible during any time over the last 30 years; they are made possible by this agreement today.

The practical vehicle for this initiative was for India to have developed over the last eight months a plan to separate its military facilities in the nuclear field and its civil facilities. And that plan was accepted by the United States this morning. We now believe that there will be two initiatives that we have to undertake to regularize this agreement. First the President will have to approach the Congress to ask for a change in U.S. law, specifically, modifications to the Atomic Energy Act of 1954, and the way in which it was modified in 1978. And we hope very much, in working with Congress, that we'll be able to convince the Congress to move forward and change American law.

Secondly, India will approach the IAEA and the Nuclear Suppliers Group, along with the United States, to see a change in international practice. And that will allow other countries around the world to do what the United States has done, and that is to initiate trade in civil nuclear energy. I expect both of those initiatives, our legislation in the United States and the international practice in the NSG to be initiated fairly soon.

I would also say that this initiative we expect will have strong support from the international community. A number of countries have already spoken out in favor of this initiative. Dr. ElBaradei, the Chairman and the Nobel laureate of the IAEA, has indicated that he is in support of this deal. He has said that to us in meetings over the last few months. And a number of our allies in Europe, the Russian government, have all said that they would favor this initiative. So we do expect broad-scale international support.

This represents the culmination of a year of American diplomacy, and this deal very much symbolizes the larger meaning of the President's visit, which is, as he said in his press conference today, the creation of a new strategic relationship between India and the United States. This is not the only part of that, it's a highly symbolic part of it, but it coincides with the initiatives we've made today in agriculture, and science and technology, in the defense field, in space cooperation. That, for the first time since 1947, mean that India and the United States will have a fully diverse and very broad economic, technological and scientific cooperation.

I know that some of you were interested in some of the questions that were asked about how does this deal intersect with the larger nonproliferation concerns that we have globally. What distinguishes India is that India has protected its nuclear technology over the 30 years of the India nuclear program. India has not proliferated, unlike North Korea, which has been a major proliferator. India has brought itself into conformance with all the international guidelines pertaining to nuclear technology, unlike Iran, for instance, which has been a great violator of those international programs. So we could not have made this deal with any country that had proliferated, that had been acting contrary to the international proliferation system. We can make it with India because India has been a good steward of its own nuclear materials.

So with that, I'll be happy to take any questions. Terry.

Q: Nick, how many civilian and nuclear reactors, how did they divide that up? How many did they decide to put in each classification? And did they accept the thing that Secretary Rice was talking about yesterday -- about the classification would have to be forever, that they couldn't move from one to the other?

UNDER SECRETARY BURNS: I think I'll leave it to the Indian government to announce exactly how many of its nuclear power plants are being put under supervision. I think it's only right that I do that. But I can tell you --

Q: Well, you're part of the agreement.

UNDER SECRETARY BURNS: I can tell you that a majority of India's nuclear power plants will be put under international safeguards, and that they will be permanent safeguards -- what we call safeguards in perpetuity. That's very important. That is a signal both to the United States and to the rest of the international community that this move by the Indian government is permanent. It's going to be sustainable and it's not going to be taken back. And I think Secretary Rice said the other day on Air Force One that she felt it was very important that these be permanent -- and they are.

I should also tell you that India has agreed that in the future all of its future civilian power reactors, thermal reactors and breeder reactors, will be placed under international safeguards. I think when we started out in this agreement nearly a year ago, there was some doubt that we'd be able to achieve a comprehensive agreement that would place the breeder reactors in the future -- future civilian breeder reactors under safeguards. But that is the commit that the India government made to us today.

So let's just recap what happened, what the Indian government did. They said they'll put a majority of their civil nuclear power reactors under safeguards, and that will be phased in between 2006 and 2014. Second, they said that in the future, as they construct nuclear power plants, all the civil thermal and breeder reactors will be put under safeguards.

Third, they said that they would enter into permanent safeguard arrangements with the International Atomic Energy Agency. We have now achieved a degree of transparency and oversight and impact on the Indian nuclear program that was not possible for three decades. So, from a nonproliferation standpoint, this is a major win for the United States, as well as for India. And from an economic standpoint, it's going to open up a major expansion of American civil trade on the part of our companies with the Indian nuclear establishment.

Q: Does this restrict in any way India's production of fissile material or the number of weapons that it can produce?

UNDER SECRETARY BURNS: The one thing we have not done in agreeing to this initiative today is to formally recognize India as a nuclear weapon state. The United States does not do that, as you know. But the agreement will cover the majority of Indian civil nuclear industry, but India will continue, obviously, with its strategic program. And the agreement doesn't -- will not have an impact on that strategic program, as you described it.

Q: Will future reactors, those fast breeder reactors, will they be permanently placed under safeguards? Is that permanent, forever?

UNDER SECRETARY BURNS: Yes. One of the Indian commitments is that those future thermal power reactors, as well as breeder reactors that are classified as civilian will be put under permanent IAEA safeguards. I think it's fair to say that anyone looking at the Indian nuclear program since 1974, when it was initiated, would have been -- would not have predicted that India would open itself up to such a large degree. Now, India has done so because it wants to emerge from the isolation of the last three decades, it wants to reenter the international nonproliferation mainstream -- and that's what this agreement allows it to do. It allows all of us that are partners of India now to have an oversight of that system that will help stem the proliferation of nuclear materials. So we're very pleased about it from that perspective.

Q: How late were you negotiating this morning?

UNDER SECRETARY BURNS: Pardon?

Q: How late did you negotiate?

UNDER SECRETARY BURNS: The negotiations lasted from last July until about 10:30 a.m. this morning. Now, you can imagine how complex this was. What the Indians did after Prime Minister Singh's visit to the White House in July was to develop a plan, a very complex plan that would, in effect, separate its military nuclear facilities and its civilian nuclear facilities. And we helped the Indians to try to think through the separation of that plan, because it has to be presented to the United States Congress and then it will have to be presented to the Nuclear Suppliers Group.

And the President, of course, had the vision that we would achieve this agreement. Secretary Rice was engaged in negotiations over the last eight months. A number of us were engaged in -- I think in made five trips here, and last evening, Steve Hadley and I and others met with the Indians until around midnight. We met again this morning. And the Prime Minister and the President, of course, made the final agreement on behalf of both countries.

Q: The United States had been maintaining very strongly that the breeder programs be also included. So the fact that now the breeder programs are not being included immediately, what are the chances that cooperation may not occur?

UNDER SECRETARY BURNS: Well, India has never been a proliferator of its nuclear technology. We would not have made this agreement had India been a different kind of country, first. Second, India has a very limited capacity now -- one prototype breeder reactor and one test reactor. It seeks to build a much larger capacity and it's made a commitment that its future civilian breeder reactors will all come under safeguards.

As we talked to our friends around the world, in Europe and in Asia, about this agreement, this was an abiding concern that any final agreement include breeder reactors, and this agreement does include breeder reactors.

Q: Not immediately, right?

UNDER SECRETARY BURNS: Well, as those reactors are built and they're classified to be civilian, they'll come under safeguards. India right now derives a very small percentage of its total energy requirements from nuclear energy. What it wants to do, like many other countries, is to build up substantially its nuclear -- its peaceful nuclear energy program. And the commitment today is that as that sector is built up, the large percentage of it is going to come under safeguards.

Q: You're using the word "majority." Did India actually agree to specific numbers and specific locations?

UNDER SECRETARY BURNS: It did. I think I'm just constrained by the rules of diplomatic nicety not to make an announcement on behalf of the Indian government. So you'll ask them. And I think they have to report to their parliament. But I can tell you that a substantial majority of India's nuclear facilities will come under safeguards, both by numbers of reactors and by percentage of total mega-wattage power. Those are the two metrics that one uses to judge this agreement.

Q: But were there items that you actually just agreed to put off because you wanted for them to be able to announce an agreement today?

UNDER SECRETARY BURNS: Well, I think it's -- the plan that was under discussion is an Indian government plan to separate its civil and military nuclear facilities. It's not a U.S. government plan. But as we are a partner of India in trying to both change American law to permit this kind of cooperation, and also international practice, we had a lot to do with the negotiations. And I just don't think it would be right for me to announce a specific number when that's the government of India's responsibility and business. But I can describe the agreement to you in general, and we think it's a substantial one.

Q: -- India never start taking this agreement -- China and Pakistan, because recently General Musharraf also said that if India is getting this from the U.S., why not Pakistan.

UNDER SECRETARY BURNS: We have always seen this deal to be a unique deal for India alone. We do not believe this deal should be or will be replicated by the United States for other countries that are outside the nonproliferation mainstream. We certainly would never consider entertaining this with a country that proliferated -- for instance, North Korea; or a country that had lied to the IAEA -- Iran. And of course, despite our friendship for Pakistan, there have been proliferation problems of a quite serious nature over the last several years that would make this kind of deal impossible, and we've been very up front and direct with the Pakistanis in saying that.

India is unique. It is soon to be the largest country in the world by population. It is a country now where the United States is the largest investor and the largest trade partner. It has a growing need for energy. It has a growing interest in developing peaceful nuclear energy. It had developed its entire nuclear program over 30 years alone because it had been isolated. So the question that we faced was the following: Is it better to maintain India in isolation, or is it better to try to bring it into the international mainstream? And President Bush felt the latter, that we ought to try to bring India into compliance actively, with the major international agreements that govern the disposition of nuclear materials, for instance, and nuclear energy.

It's not a perfect deal in the sense that we haven't captured 100 percent of India's nuclear program. That's because India is a nuclear weapons power, and India will preserve part of its nuclear industry to service its nuclear weapons program. But the majority of the program will now come under international inspection. And we think that is a tremendous and positive gain for us.

Q: The President said earlier today that it was a new way of thinking, a new way of doing business. So you're saying that this is very much India-specific, this is not to be considered a model for perhaps other countries who would like to arrange a similar deal?

UNDER SECRETARY BURNS: The President -- what the President has said was a new way of doing business certainly with India -- and it is. Because the conventional wisdom on India for three decades had been because India's nuclear program grew outside the purview of the Non-Proliferation Treaty, India should be isolated. And we felt that since India had been so uniquely responsible in not proliferating, and that while it was not officially part of these international regimes, it was in compliance with most of the norms of the regimes, we felt it made a lot of sense to try to regularize this process and bring them into the system.

And so that was the vision that we had a year ago. The challenge was in translating it into a specific agreement, and that's what we've worked on for the better part of the last year. So, in essence, what this deal has always been about is that in return for international inspection of its civil nuclear energy facilities, we -- the United States and other countries

-- will agree for the first time to engage in trade and investment into that nuclear power system. And we think that's a good deal for both sides.

Q: What's going to be the congressional landscape towards this, the way you see the pockets of resistance? And also, the President this morning talked about a good-faith gesture by the Indians -- what was he referring to?

UNDER SECRETARY BURNS: I think in terms of Congress, obviously, Congress will now play the key role. The executive branch, of course, has had the initiative to make the deal, but this deal requires a change in United States law, and Congress obviously will have to do that.

We have kept members of Congress well-informed throughout the last eight months. There have been a number of formal hearings in the House and the Senate. There have been lots of private briefings, including many last week, and we hope very much that Congress, both in the House and Senate, will now see that this deal is a gain for the U.S. and a gain for nonproliferation, and that U.S. law might be changed.

I know that there are some detractors on Capitol Hill who have said that they will oppose this legislation. There are many members of the House and Senate who say they will support it. And there are other members who have been waiting to see the specifics of the separation plan and of the agreement we reached today, and we'll begin briefing Congress later on this afternoon. I know Secretary Rice will be making phone calls. She hopes to call Senator Lugar and Chairman Hyde, the relevant committee chairs, and we'll call all the other members of Congress -- and there are a lot of them who are interested in this agreement.

Q: Nick, you said the majority, and you said you can't tell exactly how many. Can you tell us what percentage?

UNDER SECRETARY BURNS: Well, I can tell you that the Prime Minister spoke to parliament on Monday evening, and he announced that 60 -- I believe 65 of India's overall power sector would come under civilian safeguards.

Q: Would that be --

UNDER SECRETARY BURNS: Well, that's the figure he announced.

Q: What percentage of that is --

UNDER SECRETARY BURNS: Of total mega-wattage.

Q: Well, what is the percentage of -- if 100 percent is everything, what does 65 represent? What percent of India's --

UNDER SECRETARY BURNS: Of its total power production. Yes.

Q: Sixty-five percent?

UNDER SECRETARY BURNS: Sixty-five percent will come under safeguards, of its nuclear power production. Now, you might also be asking, how many reactors will come under safeguards, and that really is for the Indian government to announce. I think they will shortly.

Q: Secretary Burns, there was a report just now on CNN that 14 nuclear reactors will come under scrutiny. Is that correct?

UNDER SECRETARY: Well, I wouldn't argue. I can't -- I wouldn't argue against that figure, but it's not for me to announce it.

Q: Can I ask two questions that I think maybe are related? One is, are there business opportunities for the U.S. outside strictly the nuclear production, nuclear power area embraced in the agreement that you reached today? The other question is, are there -- is it possible for there to be non-civilian breeder reactors that they would build in the future?

UNDER SECRETARY BURNS: The answer to the second question is yes, India could build reactors that would service their nuclear weapons industry. It is much more likely, however, that the great percentage of the growth in the nuclear industry is going to be civilian, because the major strategic desire of the government is to increase power output, electricity generation for this enormous country. And so the answer is, yes, they could build facilities to service the nuclear weapons program, but the great majority of the growth we think will come on the civilian side.

Q: Are there business opportunities outside the nuclear power production area for the United States?

UNDER SECRETARY BURNS: In the nuclear field or in general?

Q: In this sort of -- the gamut of agreements that you've reached here today.

UNDER SECRETARY BURNS: Yes, and I think Steve Hadley is coming to brief on the rest of the initiatives. But, in short, if you look at -- have seen the joint statement that's going to be issued, there are major initiatives in agriculture, in science and technology, in energy, in education, in space cooperation -- substantial agreements. And if you will, as in July, what we are announcing today is a major expansion in 16 or 17 different areas of U.S.-Indian cooperation across the board. I think everybody agrees, everybody on both sides of this relationship, that we've never had as good a relationship between our countries at any time since 1947, since India's independence, and that we've never had as broad an engagement in terms of our economic trade and investment, and our foreign policy cooperation, as we have now. So I think most of us feel, in the American and Indian governments, this is now the high water mark of U.S.-India relations over the last 60 years.

Q: Did the two leaders play any direct role in resolving unresolved issues that were still hanging out there, or was it basically they just signed off on what you all did?

UNDER SECRETARY BURNS: They did. They had a discussion in the Oval Office on July 18th of 2005 which was the key discussion in agreeing to head in this direction. And again this morning, before the agreement was made, the President and Prime Minister had a thorough discussion of the issue. They weren't negotiating the text -- that was left to others, of course -- but they are the strategic architects of this agreement, there's no question about that.

Q: But there wasn't anything that you had to say, all right, we've got to kick it up to these guys to hash out this little detail?

UNDER SECRETARY BURNS: The final details were made in other negotiations, the final details were resolved. But, obviously, our instructions came from the President.

Q: Can you verify, in saying that they've committed to all future civilian breeder reactors being part of this power program, IAEA program, that that would anticipate the possibility of a future breeder reactor being built for the military --

UNDER SECRETARY BURNS: Yes, I answered in the affirmative.

Q: And the existing prototype breeder reactor stays in the military program?

UNDER SECRETARY BURNS: That's up to the Indians to decide. They have a choice of maintaining that in the miliary sphere, or it could transition to the civil sphere.

Here's a prediction. India has had to develop its entire program on its own, for the reasons that, as well, are well-known to everyone. When and if it's now possible for international investment and trade in nuclear materials and nuclear fuel and nuclear power plant technology with India, there's going to be a great incentive on the part of the Indians to have as much in the civil side of their nuclear structure as possible, because it will only be possible for American firms, French firms, Russian firms, to invest in trade with those reactors and facilities that are under safeguards. If they haven't been placed under safeguards, the minority of India's program, then, of course, the isolation will remain in place. So the incentives are to see a large increase, we think, in the civilian side.

Q: And lastly, in as much as any negotiation is a give and take, is there one significant thing that the United States had to concede here to close this?

UNDER SECRETARY BURNS: I don't really see it that way, and this was a long negotiation -- it was eight months -- so it's hard to pick out and say it was decisive. I think for us what was most important was that a majority of India's current nuclear facilities would be put under international inspection, international safeguards -- the majority -- so that this plan that we announce today would be credible, as well as transparent.

And secondly, it was very important for us that as we look towards the future -- because there will be a huge expansion now in the number of power plants in this country -- that there would be a commitment that the future civilian power reactors and breeder reactors would all -- all -- be based under safeguards. And that was agreed to yesterday. And so that was a very significant step forward, and it was critical to our agreement to this initiative.

Q: Does the Indian parliament have to approve this deal?

UNDER SECRETARY BURNS: I don't -- I believe the Indian Prime Minister will be reporting to the parliament, but I don't believe there's any -- there's no similar process as the one -- because what we have to do now is, as I said, there is a U.S. law which prohibits a private American firm from investing in a nuclear power plant in India, or from selling nuclear fuel to India. And so we will respectfully ask the Congress to amend that law and to make an exception for India -- not for a group of other countries, but for India, itself. And that's the Atomic Energy Act of 1954. That was amended in 1978 during the Carter administration. And so that -- we would ask the Congress to make an exception and to change U.S. law in that respect.

And the other technical aspect of this, Elisabeth, is that we would then -- the administration would submit a bilateral civil nuclear cooperation agreement between India and the United States to the Congress. And then, third, we would -- the United States has agreed to go to the Nuclear Suppliers Group -- that's the group of 35 countries that are the major suppliers of nuclear fuel and technology for power industries -- and we would ask that group, which also prohibits business with India, to remove those restrictions so that other countries -- France, Russia, Britain, Japan -- would be able to undertake the same kind of trade we are.

So it's going to be an elaborate process, and what the President was announcing today was that we've got an agreement with the Indian government to go forward, but in our case, we need congressional authorization to be able actually to carry this out.

Q: When you said India for the very first time has agreed to put its reactors under international scrutiny, is it for the first time in history, or the first time in three decades?

UNDER SECRETARY BURNS: Well, it's for the first time in a long, long time, and it's the first time that a substantial number of these reactors would be under safeguards, and that they would sign an agreement for permanent safeguards at the IAEA itself.

Q: -- this agreement to refrain from transferring technology for their civilian and military program -- does that apply only to imported technology, or to overall --

UNDER SECRETARY BURNS: No, it applies to all technology, whether it's indigenously produced or whether it's imported. That's a very important point -- all technology.

So the way to look at this -- and I certainly understand this is a complex and esoteric arrangement -- is India has a nuclear program; the majority of what India does is produce power through civil nuclear reactors. A minority of what they do is to use nuclear reactors to produce the elements that are necessary for nuclear weaponry. And what we're saying is that India will have international trade and investment into that civil sector, and the entire civil sector will be opened up to international inspection, but the nuclear weapons sector of their program will not be open to trade and investment, nor safeguards. And so that's going to be walled off. And that's important. The United States has not recognized formally India as a nuclear weapons state, and that's important. But we do recognize the need for nuclear power in this country.

I think it was -- we were convinced that we had to make this choice, as the President said today, to think in new ways about how to deal with the largest country in the world, a country that is a friend of ours, that's democratic, that has not proliferated. And the choice was, do we go through another 30 years and just completely isolate them, or do we integrate them into the international system. And we think by doing so today, it is a major step forward in the cause of nonproliferation, and it's a very good example for other countries that if you are an effective steward of your nuclear material, there are rewards.

Contrast that with Iran and North Korea. Both acted against the wishes of the international community, Iran having withheld information from the IAEA for 18 years, and North Korea you know about. So I think if you're looking for examples and lessons in how this has an impact on the international community, the impact's going to be positive, because India has effectively played by the rules, in terms of proliferation.

Q: Mr. Under Secretary, China has already responded by saying that it would rather have India sign the Non-Proliferation Treaty. I guess my question is, I'd like your response on that. The other question is, could you give us a sense of what this civil and nuclear trade could be worth annually for the Nuclear Suppliers Group, or for the United States?

UNDER SECRETARY BURNS: Well, the main motivation here is nonproliferation; a secondary benefit is economic. That economic benefit is going to be in the billions, there's no question about that, because of the huge nature of the Indian economy and the expansion that they are planning in the civil nuclear energy field. And given the state of technological research on nuclear reactors, and given the elementary ingredient of financing, this is an extremely -- the payoff, the economic benefits, in the long-term, will be substantial, certainly in the billions.

Q: -- the China question.

UNDER SECRETARY BURNS: I haven't seen the Chinese comment, so it's never wise to comment on something you really haven't read or haven't seen someone speak. I would just say this: China is a member of the Nuclear Suppliers Group; most of the major countries of the Nuclear Suppliers Group I think will end up supporting this, and we certainly hope China will, as well.

Q: Mr. Burns, has any assurance been given to India on uninterrupted supply of fuel, of nuclear fuel --

UNDER SECRETARY BURNS: Yes, the United States -- what we did today was to commit to the Indians that we would work very hard the help ensure a continuous and reliable supply of nuclear fuel to India itself.

First of all, we have a bilateral agreement now to negotiate, and we will embed in that bilateral agreement assurances that we will seek to help India secure fuel for its nuclear reactors. Second, we have agreed that India and the United States will approach the IAEA for a multilateral regime to supply fuel for India. Third, we've agreed to set up a council of advisors -- India and the United States and other countries -- so that if there is ever a threat of interruption of supply, those countries could meet to figure out how to maintain supply to India.

We think, frankly, the greatest guarantor of supply of nuclear fuel to India will be the world market. Once U.S. laws change and once international practices are changed, there's going to be a competitive world market wanting to sell fuel -- nuclear fuel into India. And so we think that will be continuous and very reliable, and we don't think it should cause a concern for the Indian government.

Thank you very much.

END 4:04 P.M. (Local)