Liability regime a hurdle to ties: US

Strategic talks: US committed to nuke deal

US Secretary of State Hillary Clinton said Washington was committed to its historic civil nuclear cooperation agreement with New Delhi, but would expect India to ratify the Convention on Supplementary Compensation this year and make its liability regime conform to international practices.

“We stand by our agreement. Many of us have worked very hard for the agreement. We are committed to it, but we do expect it to be enforceable and actionable in all regards,” Clinton told a news conference after a two-and-a-half hour meeting with External Affairs Minister S M Krishna.

She was asked if the Nuclear Suppliers Group’s (NSG) recent move to strengthen guidelines restricting the transfer of sensitive enrichment and reprocessing technologies could hinder full implementation of the India-US civil nuclear agreement.

Krishna told Clinton that New Delhi was committed “to ensuring a level-playing field for US companies seeking to enter the Indian nuclear energy sector, consistent with India’s national and international legal obligations.”

He is understood to have also conveyed to his US counterpart New Delhi’s concerns over the NSG’s latest move, which could dilute the cartel’s September 2008 waiver allowing its members to engage in full nuclear commerce with India. The NSG—a block of 46 nations doing nuclear trade—had come into being in 1975, in the wake of the Pokhran I nuclear test by India. It had since then been blocking nuke trade with India, because New Delhi had not signed the Nuclear Non-Proliferation Treaty.

The NSG’s waiver paved the way for the US and India entering into the civil nuclear cooperation agreement, which was signed into law by the then American President George Bush in October 2008.

“We reiterated our commitment to taking forward civil nuclear energy cooperation on the basis of full implementation of mutual commitments. We were reassured that the US reaffirmed its commitment for full civil nuclear cooperation,” said Krishna, briefing reporters on his meeting with Clinton.

Clinton said Washington stood by the NSG’s clean waiver for India and termed it “an important joint accomplishment” for the governments of both countries.

“Nothing about the new enrichment and reprocessing transfer restrictions agreed to by the NSG members should be construed as detracting from the unique impact and importance of the US-India civil nuclear agreement or our commitment to full civil nuclear cooperation,” she clarified.

“But, we are looking forward to India ratifying the Convention on Supplementary Compensation for nuclear damage during this year, before the end of this year, and we would encourage engagement with the International Atomic Energy Association to ensure that the liability regime that India adopts by law fully conforms to the international requirements under the convention.”

US nuclear companies were not happy with India’s Civil Liability for Nuclear Damage Act, which was passed by both Houses of Parliament in August last year, after the Congress-led government buckled under pressure from the opposition BJP and other parties and introduced 18 amendments, including the ones that ensured liability of the nuclear plants suppliers in case a mishap occurs as a consequence of latent or patent defect in the equipment supplied by them or due to sub-standard services provided by them or because of gross negligence by them.

The US companies have over the past few months expressed concerns over India’s stringent liability regime, pointing out that it would make the business unviable for them and, if implemented, raise the tariff for electricity generated by nuclear power plants.