India, US bid to strike N-deal before Obama's arrival

Tuesday 20th January 2015 10:55 EST

India and US are keen to strike nuclear deal before the arrival of US President Barack Obama in India. The nuclear contact group of both the countries are meeting on January 21 to resolve the contentious liability issue. This will be the third meeting in the past 45 days of the contact group established last year, after Obama's meeting with PM Narendra Modi in the US, to expedite implementation of civil nuclear cooperation between the two nations.

This will also be the last opportunity for the contact group to provide a leg-up to the nuclear agreement ahead of the Modi-Obama summit by addressing the liability issue which has bedeviled the deal despite India having offered sites for two nuclear reactors each to American nuclear power giants GE Hitachi and Westinghouse in Andhra Pradesh and Gujarat respectively.

The Centre is keen to ensure a breakthrough in the contact group meeting as a means to convince the US about its commitment to the civil nuclear deal. This could also be the big takeaway from the Obama visit which was seen as a diplomatic coup by Modi when he himself announced it on Twitter.

India is awaiting a response from the Americans over its proposal to set up a nuclear insurance “pool” to compensate suppliers in case of a nuclear accident. This was necessitated by US reservations over India's controversial nuclear liability law which makes suppliers liable for damages in the event of any nuclear mishap.

Indian officials have already said that since the liability law cannot be tampered with, the insurance pool is the best option available. The government has roped in state-owned General Insurance Corporation of India to build the pool which will be used to provide insurance cover to suppliers.

While section 17(b) of the law guarantees right of recourse against suppliers, another section (46) is seen by the US as exposing suppliers to unlimited liability through tort claims. US officials have said the companies are worried about being exposed to unlimited liability. The meeting will seek to address these concerns.

The contact group has discussed a range of issues related to implementation apart from liability like administrative issues, technical issues and licensing to facilitate the establishment of US-designed nuclear power plants in India.

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