We have now reached agreement on the conditions for the supply of 100 fuel rods for the Canada-India reactor. You will recall that the Indian Government was reluctant to comply with our usual safeguards requirements.⁶⁴ In the end, the Indians have accepted a modified wording (see attached) by which they agree that Canada may call for joint audits of the Canadian fuel rods and the special fissionable materials produced there from but they have requested that the intergovernmental exchange of notes be kept confidential.

Our High Commissioner in New Delhi will proceed with this confidential exchange on Friday, January 29, as it is desirable that the loading of the reactor should not be held up. I understand that the Atomic Energy of Canada Limited is informing the Minister of Trade and Commerce.

If there should be a leak of information and any questions were asked, in the House or elsewhere,⁶⁵ as a consequence, the fact that an agreement had been signed would have to be noted, but our understanding with the Indians requires that we do not make the actual terms public without prior consultation.

This agreement was earlier approved in principle by you and the Minister of Trade and Commerce, subject to drafting changes. As you know the Indians have asked for some changes in the text but I think that, in substance, the agreement is as satisfactory to us as the original draft.

      N.A. R[obertson]

[PIÈCE JOINTE/ENCLOSURE]

Note

Memorandum

FUEL FOR THE CANADA-INDIA REACTOR

1. Canada will supply fuel elements if required by India for use in CIR on commercial terms in quantities mutually agreed to from time to time. The initial supply of fuel elements by Canada will consist of one hundred (100) rods of uranium with end plugs clad in the inner aluminum sheath.

2. These one hundred elements will be made available by Canada to India in time for initial start-up. It is understood that special consideration will be given to the use of Indian manufactured fuel elements in the initial loading.

3. It is the intention of Canada and India that the fuel elements provided by Canada, and any plutonium produced there from, shall be used for peaceful purposes. In compliance with these intentions they have agreed to the procedures described in paras 4-6 below.

4. The Indian Atomic Energy Commission will keep an account of the fuel elements supplied by Canada and institute a system of effective self-inspection. The Commission will carry out a physical audit once a year of the Canadian elements in storage prior to irradiation, the Canadian elements in the reactor, the Canadian elements in storage after irradiation and the number sent for processing.

5. If Canada, through Atomic Energy of Canada Limited, at any time so requests, India will agree to a joint audit, both physical and record audit, of any or all of the materials referred to in paragraph 4. Whenever such an audit is carried out, the report will be produced jointly by the Indian and Canadian representatives associated with it.

6. When Canadian-supplied material has been irradiated and subsequently processed in a chemical plant to separate the plutonium from the depleted uranium and the fission products, only the plutonium so produced in the Canadian material will be subject to audit. The quantity of plutonium to be subject to audit will be settled by negotiation and would normally be arrived at by calculation related to power produced by the material supplied by Canada. (It is clearly recognized that with respect to plutonium the joint audit and the joint physical check would apply only to the assessed quantity of plutonium processed from Canadian elements and all that would be necessary for India would be either to show this quantity of plutonium in storage or in use for peaceful purposes, since it is impractical, if not impossible, to differentiate between the plutonium produced from Canadian fuel elements and plutonium produced from Indian fuel elements.) India will have the option to place this quantity of plutonium or a fraction of it at the disposal of Canada, in which case Canada will pay a fair market price as mutually agreed to between authorized representatives of the governments of Canada and India. In addition, Canada will have first option to purchase (at fair market prices as mutually agreed) for peaceful purposes only any amounts of the plutonium referred to in this paragraph which India does not wish to retain.⁶⁶

⁶⁴Voir volume 26, chapitre III, 6^e partie (d)./See Volume 26, Chapter III, Part 6 (d).

⁶⁵Aucune question n’a été posée à la Chambre des Communes.
No questions were asked in the House of Commons.

⁶⁶L’Inde a accepté ces conditions le 6 février 1960. These terms were accepted by India on February 6, 1960.