India and the U.S. will review the state of their economic and strategic cooperation next week with discussions expected to touch on the nuclear liability law and facilitating greater American investment in the infrastructure sector, say government sources.
U.S. Deputy Secretary of State William Burns will hold talks with Foreign Secretary Ranjan Mathai on Monday during which Washington will seek greater clarity on regulations for the nuclear liability Bill notified on the eve of the Obama-Manmohan meeting in Indonesia last month. Mr. Burns is also expected to call on Prime Minister Manmohan Singh, External Affairs Minister S.M. Krishna and National Security Adviser Shivshankar Menon.
U.S. companies, promised contracts for 10,000 MWe of nuclear energy, have felt stymied by the Indian liability law that holds suppliers culpable in the event of a nuclear accident. French and Russian-origin companies, which have also been asked to set up civil nuclear plants in India, have a similar grievance and are also eager to seek clarity on the guidelines of the Bill.
India says it is bound by the domestic law and has bridled at the suggestion of getting the legislation examined by the International Atomic Energy Agency for compatibility with an international law.
Neither the U.S. nor France and Russia have publicly commented on the detailed guidelines for the nuclear liability. Because of the lack of clarity on the additional costs that will be imposed on equipment suppliers, French and American companies have gone slow on their plans. Russia's two reactors at Kudankulam in Tamil Nadu do not come within the ambit of the law. It wants the next two plants to be out of the law's purview. Russia says no new condition can be inserted for plants III & IV because all other terms are the same as that for Kudankulam I & II civil nuclear plants.
Mr. Burns will also hold talks on the second generation economic reforms and the opportunities proposed for western financial institutions through foreign direct investment (FDI). The government has met a long standing demand of the European and American companies by proposing FDI in multi-brand retail, but protests in Parliament forced it to shelve the plan for the time being. India is also keen on allowing FDI in aviation and pension funds.