What is 123 Agreement?

The 123 Agreement is so called because Section 123 of the US Atomic Energy Act of 1954 establishes an agreement for civilian nuclear cooperation as a prerequisite for nuclear deals between the US and any other nation. This agreement needs to be signed as part of the Indo-US nuclear deal to be submitted to the US legislature for its approval. Article 2.4 of the Agreement provides for continuing with un-safeguarded nuclear activities such as weapons program, of either party.

This can happen once the India-specific IAEA safeguards are approved, and India approaches NSG for clearance to nuclear fuel supply to India. However, any supply from US may not be possible without India passing legislation to provide “nuclear Liability Protection”, which guarantees for providing compensation to the public in the event of an accident so that the suppliers of nuclear materials are not affected.