'Surprised' NSA confirms India will not compromise on nuke liability law with U.S.

Last Updated: Fri, Sep 20, 2013 13:27 hrs

New Delhi: Stressing that Indian law, including civil liability, would not be bypassed in the nuclear deal with the United States of America, National Security Advisor Shivshankar Menon on Thursday said the relationship between the two countries is growing from strength to strength in the era of innovation.

"I was surprised in the last few days to see several stories claiming that somehow Indian law would not apply to projects in India. Civil nuclear projects in India will naturally be subject to Indian law, including civil liability. Domestic and foreign vendors have sought clarifications on some points of that law, which are being examined," Menon said.

"The civil nuclear agreement is a significant part of our strategy to meet long term power demand in India, which is expected to grow four times over in the next two decades. It has been our consistent stand that the power plant should meet the highest standards of safety delivering power at a price that is competitive vis-a-vis other sources of energy," he added.

Menon, speaking at the Aspen Institute India (AII) session on 'India and the U.S.' ahead of Prime Minister Dr. Manmohan Singh's visit to the U.N. General Assembly in New York next week, said that the relationship between the superpower and India has shared a strong history, and is presently exploring new avenues which goes beyond those entailing formal education.

"I think that that is one of the most important parts of the relationship. If you look at the relationship, that's where its strength has consistently been. Even in the 1960s, when we had done the Green Revolution-we worked together. What were we were essentially doing was that we were helping to build capability and capacity," he said.

" That's very true today. Education, if you look, it is the fastest growing sectors in the relationship. But, it needs to be beyond just formal education and it goes into skill development. In the whole era of innovation, it's amazing how many things are actually happening between India and the U.S. today. Don't forget that all the way from 2005 until 2008, and thereafter, we really had to clear away the debris of what there was which prevented us from working together with our partners abroad," he said.

"Economically, as we go forward, we will focus on opportunities, especially in the infrastructure sector; improve market access; negotiate a Bilateral Investment Treaty; pursue constructive solutions in the WTO that addresses our key concerns; and, work to strengthen the global multilateral trade regime, avoiding its fragmentation or the growth of protectionism. There are also avenues to be explored in the areas of energy, defence, education, and in the quality and range of the strategic dialogues that we undertake," he added.

Saying that the two countries have a growing dialogue and partnership on non-proliferation, export controls and nuclear issues, Menon said that some of India's most innovative and rewarding partnerships are in the inter-linked domains of energy, health, higher education and science and technology.

"Our total trade in goods and services exceeds 100 billion dollars. It has grown every year through the past five years of a global economic crisis. We might each have reasons not to be fully satisfied with our economic relations but no one denies its potential and significance," he said.

"The US is our single largest trading partner and is a source of critical technology, investment, and collaborations, with over USD 11 billion worth of Indian investments in the US, and USD 50 billion of US investment in India," he added.

According to reports, a Cabinet Committee on Security (CCS) note suggested that prior to his visit to the United States to attend this year's U.N. General Assembly session and to meet President Barack Obama on its sidelines, Prime Minister Manmohan Singh appears to be keen to have a diluted version of the NLB signed.

The diluted NLB reportedly overlooks several key factors, including security concerns. According to a television channel, the CCS note details plans to bypass the Atomic Energy Commission (AEC), a move that has raised questions.

Another channel said that the UPA Government has sought the opinion of Attorney General G E Vahanvati on the extent of the suppliers' liability.

Reports say that the government is keen on attracting huge foreign investment through nuclear commerce, and is therefore, under huge pressure from the United States to strike deals with American reactor builders like GE and Westinghouse, who see India's market for nuclear equipment as worth 175 billion dollars.

To facilitate this, the Indo-U.S. nuclear agreement was signed in 2008. It reversed a 34-year-old U.S. ban on supplying nuclear fuel and technology to India.

In 2010, Parliament passed the Civil Liability for Nuclear Damage Act, which creates a liability cap for nuclear plant operators for economic damage in the event of an accident.

It also leaves nuclear suppliers free of most liability.

Critics and activists say that nuclear operators and suppliers should be jointly and absolutely liable for civil damages in the event of an accident, and that their financial liability must be unlimited.

Potential nuclear equipment suppliers, including the United States, say India's nuclear liability law is too stringent.

They have particularly objected to clauses allowing the state-run Nuclear Power Corporation of India, which operates all the nuclear plants in India, to seek compensation from nuclear suppliers in case of an accident due to faulty equipment.

Prime Minister Dr. Manmohan Singh is scheduled to attend the U.N. General Assembly in New York next week.

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