‘No nuke deals in India unless liability issue is resolved’

July 11, 2014 02:08 pm | Updated November 16, 2021 06:56 pm IST - Washington

A cartoon on nuclear liability by cartoonist Keshav.

A cartoon on nuclear liability by cartoonist Keshav.

American companies cannot have nuclear agreements in India unless the new government resolves the liability issue even though India represents phenomenal partnership opportunity for U.S. firms, a top American expert has said.

“There will not be nuclear deals in India unless and until the civil nuclear liability issue is resolved. And I am heartened that the Modi administration is beginning to come to terms with reform of liability. That would truly open up that market to U.S. reactor vendors in a big way,” Daniel Lipman, executive director of Supplier Programmes at the Nuclear Energy Institute told lawmakers at a Congressional hearing.

At the hearing of the House Foreign Affairs Committee on “The Future of International Civilian Nuclear Cooperation,” Mr. Lipman said India has plans to put out up to 50 nuclear reactors over the coming 30 years.

“But there are currently agreements in place and reactor deals that have been consummated with the Russians. At Kudankulam (Tamil Nadu) there are operating reactors of Russian design and there is a new set of units that have just been consummated with the Russians. Plus the French are in there,” he said.

“We need this civil nuclear liability protection. I’m certain that American companies just will not put their companies at risk,” Mr. Lipman said.

“What’s interesting, it’s not just American companies that get hurt. My view is so do Indian companies get hurt.

“Now, why is that? I think there are many American companies that would like to leverage the fact that there are English-speaking, highly technically trained, very capable engineers and manufacturers in the country of India, but they’re not going to partner with them until this liability issue is put behind us,” he added.

“So to me, India represents phenomenal partnership opportunity for American nuclear companies,” Mr. Lipman argued at the Congressional hearing chaired by Congressman Ed Royce, Chairman of the House Foreign Affairs Committee.

The Civil Liability for Nuclear Damage Act, which enables operator of nuclear power plants in India to seek partial compensation from suppliers in case of accidents, is hampering projects in the country.

Suppliers of nuclear equipment from the U.S., Canada and other countries see the Nuclear Damage Act as a hurdle in selling nuclear reactors to India.

Henry Sokolski, executive director of the Non-proliferation Policy Education Centre, said that at the time of the nuclear deal, India, they were told, was a $100 billion nuclear market for the U.S.

“Nine years after that deal was announced, though, no U.S. reactors have been sold,” he said.

“Yet by exempting India from restrictive NPT rules, we did great harm to that treaty and to our non-proliferation efforts globally. The Government Accountability Office (GAO) recently noted that the US doesn’t track Americans’ actual nuclear exports.

“The committee should look into this and demand real numbers on exports of 123-controlled goods. On these matters, Congress should not be sold a bill of goods,” Mr. Sokolski said.

Congressman Brad Sherman expressed disappointment on India’s nuclear liability bill.

“I’ve been very disappointed with the Indian deal where, because for a number of factors, but especially the fact that India has not given us adequate liability protection, we haven’t built a single reactor there or even started one,” he said.

Indian-American Congressman Ami Bera said the Indian civil nuclear deal that was negotiated and signed in 2008 hasn’t transpired the way they certainly would have liked to for a variety of issues.

“But particularly the liability issue which seems to be unique to India. It’s not just our companies that are somewhat reluctant, GE and Westinghouse, but certainly the French and Russian companies that have, you know, much better protections, you know. Our industries are private and certainly would get exposed,” he said.

“With a new administration coming into India with Prime Minister (Narendra) Modi certainly making overtures to want to increase trade, wanting to build India’s infrastructure and expand its economy and, you know, I think within the past month, you know, there’s been some movement in terms of signing agreements with the IAEA,” Mr. Bera said.

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