The 123 Agreement is a bilateral international agreement, formally titled the "Agreement for Co-operation between the Government of India and the Government of the United States of America concerning Peaceful Uses of Nuclear Energy". It is popularly known as the 123 Agreement because it is required under Section 123 of the U.S. Atomic Energy Act of 1954.
The framework for the agreement was established by a joint statement on July 18, 2005, by then Indian Prime Minister Manmohan Singh and U.S. President George W. Bush. The agreement was created to end the three-decade-long technology denial regimes against India, which had been in place since India's first nuclear test in 1974, thereby ending India's nuclear isolation. The formal agreement came into force on December 6, 2008, with a 40-year term and rolling 10-year extensions.
The mechanism of the agreement is a reciprocal exchange: India committed to separating its civil and military nuclear facilities and placing all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards. In return, the U.S. agreed to work toward full civil nuclear cooperation, providing for nuclear trade, transfer of material, equipment, and technology, including cooperation in enrichment and reprocessing. Key provisions include fuel assurances, committing the U.S. to support India in establishing a strategic fuel reserve to guard against supply disruption. India also maintains its voluntary, unilateral moratorium on nuclear testing.
The agreement is intrinsically linked to the U.S. domestic law that enabled it, the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 (Hyde Act). It also connects to the Nuclear Suppliers Group (NSG), which granted India a special waiver to allow nuclear commerce despite India not being a signatory to the Non-Proliferation Treaty (NPT). While the core agreement remains in force, its operationalization has faced hurdles, leading to the establishment of a Contact Group in September 2014 to clear the path for U.S.-built nuclear power plants in India.