India feels the civil nuclear logjam with the United States is out of the political realm because it will be difficult for the government to substantially tinker with its Liability Law despite suggestions to this effect by U.S. Secretary of State Hillary Clinton at a press conference here on Tuesday.

Ms. Clinton raised hackles here when she suggested that India get its Liability Law vetted by the International Atomic Energy Agency (IAEA) so that it “fully conforms” to the international Convention on Supplementary Compensation (CSC) for Nuclear Damage.

Washington feels that two provisions in the Indian law have prevented two U.S. companies — GE and Westinghouse — from opening talks on setting up six civil nuclear plants each. The potential business opportunity is estimated at over $ 50 billion, the highest-ever for the two companies outside their home country.

“We have to find a fix. But we had a problem with her message,” said officials. Ms. Clinton had suggested India approach the IAEA to establish whether its Liability Law was in harmony with the CSC. “This is because the Americans were 100 per cent sure that the IAEA would suggest changes,” they added.

Pointing out that the current political climate would not allow the government to change a law passed recently by Parliament after a great deal of acrimony, the officials felt the only way to reconcile differences was through commercial talks between the companies and the Nuclear Power Corporation of India Limited, which would run the plants.

“Commercial talks ought to ensure the terms and conditions are such that they don't become uncompetitive. Since this is not a non-proliferation concern, governments could stay out of it,” they suggested.

On India's membership of four export control bodies, informed sources maintained that the focus should remain on the Nuclear Suppliers' Group and the Missile Technology Control Regime (MTCR).

“The other two — Wasenaar Arrangement and the Australia Group — can happen the moment India harmonises its export control laws and makes some internal changes. MTCR is tricky because it mandates ratifying the Nuclear Non-Proliferation Treaty [NPT]. For the NSG, the U.S. has tried to help us by circulating a paper at the last plenary,” the sources said.

They played down the difference in wordplay by Ms. Clinton and External Affairs Minister S.M. Krishna during their joint press conference — Ms. Clinton favoured “phased” membership of the four control bodies, while Mr. Krishna wanted India to become a member “in tandem.”

The sources explained that India could become a member of the Australia Group and the Wasenaar Arrangement before it joins the NSG and the MTCR. But for that to happen, it would want concrete milestones to be achieved with respect to changing the criteria for India to join the NSG and the MTCR. “We don't want to be left hanging with memberships to just Australia Group and the Wasenaar Arrangement. The first two wont move without concrete assurances on the other two,” reiterated the sources.

Meanwhile, at a background briefing for newspersons accompanying Ms. Clinton, a senior U.S. State Department official conceded that “the Indians never want to be pushed.”

On making the Indian Liability Law “compliant” with the CSC, they said, Ms. Clinton emphasised the importance of India coordinating with the IAEA to get their advice because “we have put an enormous amount of effort into the civil nuclear deal. It's important because we want it to help support India's growing energy needs.”

“It would be a very serious problem if India were to come out with regulations that were not in compliance with the CSC and then left us out in the cold, not being able to profit from all of the hard work that we have put into that.”