Why nuclear deal with US is lost in a blind alley

The much-awaited India-US Energy Dialogue has failed to push the stalled civil nuclear deal forward, even as the US urged India to align its nuclear liability law with the international convention on the issue.

Ahead of a meeting of a working group on civil nuclear energy cooperation in Mumbai on Wednesday, visiting US Energy Secretary Ernest Moniz underscored the need for India to bring its Civil Liability for Nuclear Damage Act, 2010, in line with the international regime.

"We need to pick up pace here; other areas of (energy) collaboration have progressed much faster. One of the key issues is resolution of the liability convention to see that India is aligned with the international convention on supplementary compensation, which we expect to come into force this year... Resolving this convention is important for all companies, including Indian ones. A small contract was put into force, in terms of advancing a deal there," Moniz said on Tuesday, after concluding the Delhi leg of the India-US Energy Dialogue.

However, Planning Commission Deputy Chairman Montek Singh Ahluwalia, co-chairing the dialogue from the Indian side, said the hurdles to the successful implementation of the civil nuclear agreement had to be removed within the framework of existing laws.

"Whenever you have something new and complex, different stakeholders can have different views. It is true it is not only the US that raised this issue. Other partners with whom we want to pursue nuclear cooperation have similar concerns. We are hopeful within the existing framework of the civil nuclear liability Act, it will be possible to resolve these problems," he said.

Senior officials involved in the talks told Business Standard India’s nuclear liability law was based on the International Atomic Energy Agency's Convention on Supplementary Compensation for Nuclear Damage and, therefore, it had the option of not ratifying the international liability regime set come into effect later this year.

A major difference between the international liability regime and India's liability law is the issue of whether the plant operator is allowed legal recourse against a supplier; the Indian law allows this. Second, Indian law also allows the operator legal recourse if the supplier causes damage intentionally.

In this case, the operator is Nuclear Power Corporation of India Ltd, while private companies from partner countries are the suppliers.

Last year, US energy giant Westinghouse Electric and NPCIL had signed a commercial pact for installing a 1,000 Mw nuclear reactor in Gujarat.

However, the negotiations hit several hurdles, with foreign energy firms and domestic companies raising questions on how the civil liability law will be implemented.

Both sides have not been able to reach an agreement.

Westinghouse and GE Hitachi are in consultations with NPCIL to commence commercial cooperation in this segment.

The bilateral civil nuclear cooperation agreement was finalised in July 2007 and signed in October 2008.