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The Big Picture – Indo-US Nuclear Deal: Will it be worked out?

Summary:

It is almost ten years since the civil nuclear agreement between India and the US was discussed and over seven years since the final agreement was signed.

However the deal largely remains in a limbo. Ahead of the US president’s visit the efforts to find a solution to the stalemate has gained momentum.

The civil liability for nuclear damage act passed in 2010, according to the US, has been the major reason why the deal has not moved forward.

The Indian liability law holds the suppliers directly liable in case of a nuclear accident, while countries like France and the US have asked India to follow global norms under which the primary liability is with the operator.

Since all the nuclear power plants in the country are run by the government-owned Nuclear Power Corporation of India Ltd (NPCIL), following international norms will mean the government would have to pay for the damages in case of an accident.

Another contentious clause in the liability law was unlimited liability for which international companies will find it difficult to get insurers.

The nuclear contact group established during the last September has met 3 times so far.

On the Civil Liability for Nuclear Damage (CLND) Act 2010, some provisions of which are being seen as a hindrance for supply of equipment by US reactor vendors and sub-suppliers, the Centre has instructed state-owned General Insurance Corporation to prepare a blueprint for an appropriate product to cover the liability of the operator — state-owned Nuclear Power Corporation or NPCIL — under the legislation.

As far as diluting the liability law is concerned there is strong objections to it within the country, while the US and nuclear reactor suppliers feel that they would not be able to do the business without it.

The liability act was brought in to prevent Bhopal Gas Tragedy like events.

The whole process of going in for nuclear civil cooperation was a very major game changer not just in Indo US relations but also in terms of India’s global position.

To meet our energy requirements it is necessary to harness the nuclear power.

It is also true that only 3% of the total energy requirements will be met from the nuclear energy.

To address concerns of the suppliers , an assurance on capping time and cost liabilities under the overall provisions of the Indian nuclear legislation, possibly through amendments to Section 17 (b) of the Act and changes to Section 46 to take care of concurrent liability, is likely to be extended to the American side during the bilateral negotiations.