India and the United States have reached a deal on reprocessing American-origin spent nuclear fuel to be supplied to India under the landmark civil nuclear agreement signed in September 2008.

The Obama administration issued a statement on Monday saying: “The two countries have taken an important step towards implementing civil nuclear cooperation by completing negotiations on arrangements and procedures for reprocessing US-origin spent nuclear fuel.”

The talks were wrapped up well before the August deadline. The US statement noted that these arrangements will enable Indian reprocessing of US-obligated nuclear material under IAEA safeguards. Completion of these arrangements will facilitate participation by US firms in India’s rapidly expanding civil nuclear energy sector.

The reprocessing arrangements were negotiated pursuant to Article 6 (iii) of the US-India civil nuclear cooperation agreement, also called the 123 Agreement.

Under the 123 Agreement, India will construct new facilities dedicated for reprocessing the safeguarded nuclear material under IAEA safeguards.

The advanced consent agreement is only the third of its kind ever undertaken by the US. The US has such agreements with the European consortium EURATOM and Japan. China, Brazil, Indonesia, South Korea, which have 123 Agreements with the US, do not have such agreements.

In New Delhi, US Ambassador to India, Timothy J. Roemer, described the development as an “important step.” He said this was “part of the great, win-win narrative of the US-India global partnership, affirming the commitment of our two countries to realise the full potential of our landmark civil nuclear agreement.”

“These arrangements will help open the door for US firms in India’s rapidly expanding energy sector, creating thousands of jobs for the citizens of both our countries. The United States and India are one step closer to ensuring greater access to clean and affordable energy and electricity for all Indians, particularly those most in need,” said the US envoy.

“We recognise that Prime Minister Manmohan Singh shares President Barack Obama’s bold vision for a world without nuclear weapons. We applaud India’s outstanding track record on non-proliferation issues, and we look forward to our continuing cooperation in this area,” he added.

Ron Somers, president of the US-India Business Council, said the agreement with India reflects the special trust and respect that exists between strategic partners.

The finalisation of a reprocessing agreement puts the spotlight on the liability issue and on CFR (Code of Federal Regulations) Part 810 assurances. India this month shelved a bill to limit nuclear firms’ liability in the case of accidents at nuclear plants.

Parliament is expected to take up the matter after the recess. Sources told The Tribune that US officials have raised concerns regarding the liability issue with their Indian counterparts.

The two countries also need to tackle the issue of CFR assurances, which are required by the US before it gives export licenses to US companies seeking to start negotiations on civilian nuclear trade with India.

“The agreement on non-proliferation assurances and India’s adoption of a regime to make nuclear liability predictable, consistent with the IAEA-sponsored Convention on Supplementary Compensation, will enable India to assume a key role in the global commercial nuclear supply chain,” said Ted Jones, director for policy advocacy at USIBC.

The council said delays in the Part 810 assurances, are currently preventing work by Indian suppliers in the US as well as collaboration in India.

In an interview with Asahi Shimbun earlier this month, US Assistant Secretary of State Robert Blake reaffirmed Obama’s commitment to the nuclear agreement signed under President George W Bush.

“The ultimate goal of ours is, of course, to allow the export of nuclear reactors to India,” Blake said. India has set aside two nuclear reactor park sites in Gujarat and Andhra Pradesh. Blake said up to eight reactors could be located in each of those parks.

Meanwhile, Manmohan Singh will travel to Washington next month to participate in a Nuclear Security Summit.