We will find solution within law to objections raised by foreign firms: Montek

India has ruled out diluting the Civil Liability for Nuclear Damage Act and hoped a solution to the stalemate caused by foreign companies not agreeing to two of its clauses will be found within the framework of the legislation.

“It is still is our intention to establish new reactors. It is taking a little bit longer but I am confident the problems can be resolved within the framework of the Act,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said at a joint news conference with U.S. Energy Secretary Ernest Moniz at the end of the U.S.-India Energy Dialogue here on Tuesday.

Dr. Ahluwalia agreed that India has benefited from the Indo-US civil nuclear agreement and suggested that it was its turn to make sure nuclear energy generating capacities are put in place. “Rapid expansion of nuclear energy is very much a part of India’s energy security scenario,” he added.

While India is putting up indigenous nuclear plants, their capacity is less than what Russia, France and the US are offering. But all the suppliers have objected to Sections 17(b) and 46 of the Act which they say run counter to the International Convention on Supplementary Compensation for Nuclear Damage (CSC).

The CSC requires domestic liability laws to conform to a model text but the Indian law is tougher as it allows legal action against suppliers if an accident is caused by faulty or defective equipment. The U.S. has been candid in stating that the Indian law violates the CSC. Russia, Canada and France have similar reservations but are not public about them.

Dr. Moniz also acknowledged that the key issue holding back the setting up of foreign nuclear power plants in India is the resolution of differences between the Indian liability law and the CSC. He said the U.S. wished to see that India was aligned with the CSC which may come into force this year. “Resolving it is important for all companies including Indian companies,” he said.

The US Energy Secretary did not agree with the suggestion that the Indian law should be diluted. He preferred to use the term “rationalise” and said discussions on Wednesday in Mumbai would give a better idea about Indian proposals in this regard.

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