- The Washington Times - Wednesday, June 2, 2010

India’s foreign minister on Wednesday said his government is committed to implementing a 2008 civilian nuclear deal with the U.S., even as U.S. and Indian firms grow increasingly frustrated at the slow pace of progress in India.

External Affairs Minister S.M. Krishna told an audience in Washington that he had received “some feedback” from members of the U.S. business community on the implementation of the nuclear deal.

For the nuclear deal to become operational, the Indian Parliament must pass a liability bill that is consistent with the Convention on Supplementary Compensation for Nuclear Damage.

The Indian government introduced the liability bill in Parliament last month and was met with a barrage of criticism from the opposition, which says the legislation denies victims of a nuclear disaster the right to bring compensation claims to court.

The bill caps the liability of foreign companies at $450 million in the event of an accident at a nuclear power plant. It also would hold the operator and not the supplier liable for damages.

The deal, which was signed by President George W. Bush and Indian Prime Minister Manmohan Singh in 2008, makes an exception for India by allowing nuclear commerce with a country that has not signed the Non-Proliferation Treaty (NPT).

Mr. Krishna said the Indian government is “committed to put in place a nuclear liability regime.”

He said the U.S. and India are “well within the agreed timelines” in the implementation of the accord. The two countries recently completed a rare reprocessing agreement nearly six months ahead of schedule. The U.S. has such a reprocessing agreement only with the European Union and Japan.

“We look forward to U.S. companies investing in India. Many of you are in dialogue with our companies already. We would like it to be as robust a partnership as we have both envisioned,” Mr. Krishna said in remarks to the U.S.-India Business Council on the eve of the first U.S.-India strategic dialogue.

General Electric Co. and Westinghouse Electric Corp. are prominent among a list of U.S. firms that stand to receive a generous portion of the Indian nuclear business, estimated to be worth several billion dollars, once the deal becomes operational. Nuclear trade with India also will generate thousands of American jobs.

John Schlosser, vice president of the Albright Stonebridge Group, said there is “a sense of frustration on the part of industry with the delays in adopting liability legislation that is consistent with the Convention on Supplemental Compensation.”

“It is every bit as vital for Indian companies that this issue be resolved,” a U.S. business analyst who has been following the liability issue closely said on the condition of anonymity because the matter has yet to be settled.

“We’re one month away from the fifth anniversary of the conception of this [nuclear] deal,” the analyst said. “But where are the deals?”

Conceptualized during Mr. Singh’s visit to Washington in July 2005, the accord lifts a three-decade U.S. moratorium on nuclear trade with India.

The industry analyst said there are “differing views” on whether the liability bill, as written, is consistent with the Convention on Supplemental Compensation. “If there isn’t a CSC compatible liability law, it is like saying there is no nuclear liability law,” the analyst said.

In India, the 1984 Bhopal disaster — in which methyl isocyanate leaked from a Union Carbide plant, killing thousands and afflicting many more — is fresh in memories. Subsequent struggles to receive compensation continue.

Besides the U.S., power-starved India also is relying on France and Russia to help develop nuclear energy.

Obama administration officials have sought to nudge India toward approving the liability bill, and Mr. Singh has expressed his commitment toward that goal.

Robert O. Blake Jr., assistant secretary of state for South and Central Asian affairs, said the Obama administration is following the fate of the liability legislation “very closely.”

“We hope that that will be consistent with the Convention on Supplementary Compensation. And if so, and if passed, it would provide a very important legal protection and open the way for billions of dollars in American reactor exports and thousands of jobs,” he said.

William J. Burns, undersecretary of state for political affairs, told a Washington think tank audience on Tuesday: “As Prime Minister Singh argued publicly last week, it is deeply in India’s self-interest for its Parliament to enact liability legislation consistent with international standards, so that it can attract the best foreign investors at the most competitive rates, and build the role and capacity of its own companies.”

Mr. Burns said U.S. companies are prepared to support the expansion of India’s civilian nuclear infrastructure and two reactor park sites have already been identified.

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