Okay. But where exactly does 123 agreement prevents nuclear test by India. Nowhere in the text is the word "nuclear test" mentioned. Read article 14 of agreement here: http://www.state.gov/r/pa/prs/ps/2007/aug/90050.htm
It clearly says that, EITHER PARTY CAN TERMINATE THE ACT WITH ONE YEAR NOTICE. Futher, it says that IF US TERMINATES, IT WILL HAVE TO COMPENSATE INDIA WITH MARKET VALUE FOR ALL THE GOODS INDIA HAS TO RETURN. But, through an earlier article 4, India WOULD ALREADY HAVE BUILT A STRATEGIC RESERVE BY THAT POINT OF TIME.
Now to think of implications; If India did not worry about sanctions before this deal; what can stop India from doing test in future. At best, US can only pull out with ONE YEAR NOTICE, AND PAYS INDIA FOR THAT, AND WHEN INDIA HAS ALREADY BUILT A STRATEGIC RESERVE, AND THAT WHEN INDIA FIRMLY GETS TO KEEP DESIGNATED MILITARY INSTALLATIONS OUT OF IAEA, NSG AND NPT SAFEGUARDS.
Do you really think it can get better than that? I don't think so. Rather than give up the right to conduct a test, this agreement is more on the side of allowing India to conduct a test at later date when worrying about international fallout will become a laughable idea.
Friends, text is freely available online. Link is: http://www.state.gov/r/pa/prs/ps/2007/aug/90050.htm
Please read it and show me where and how does exactly US gets to penalize India. If India does conducts a test at later date after signing agreement it will still be in much better position aft