M A I N   N E W S

Will put in place nuke pact with US: India
Ashish Kumar Sen in Washington DC

Indian External Affairs Minister SM Krishna with Boeing International chairman Shephard W Hill.

External Affairs Minister SM Krishna on Wednesday assured members of the US business community that India is committed to implementing a 2008 civilian nuclear deal with Washington.

The slow progress on the nuke deal front has resulted in growing frustration among the Indian and US firms. For the pact to become operational, the Indian Parliament must first pass a liability bill that is consistent with the Convention on Supplementary Compensation (CSC).

The Manmohan Singh-led UPA Government introduced the liability bill in Parliament last month and was met with a barrage of criticism from the Opposition, which said 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 would also hold the operator and not the supplier liable for damages.

Indian officials say the liability cap — it’s above CSC — pales in comparison to the US law’s $12-billion cap.

Krishna told a meeting of the US-India Business Council in Washington that the Indian government was “committed to put in place a nuclear liability regime.”

He said the US and India were “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.

“We look forward to US 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,” Krishna said on the eve of the first US-India “strategic dialogue.”

US Assistant Secretary of State for South and Central Asian Affairs, Robert O Blake, told a group of Indian reporters in an online discussion on Wednesday that the Obama administration trusted Manmohan Singh’s commitment to getting the liability bill passed. “Our only interest is in seeing that whatever bill is passed is consistent with the international standard in this area, which is the CSC which governs liability in different countries in which American companies operate and provide civil nuclear technology,” Blake said.

Krishna, who met Secretary of State Hillary Rodham Clinton at the State Department on Thursday morning, said prior to the meeting that he would discuss with his American counterpart “shared interests - ranging from countering terrorism and extremism, advancing nuclear security, working to secure the global commons, seeking to build a developed and cooperative Asia, and succeeding in Afghanistan to dialogues for co-operation in science and technology, research for clean energy and monsoon prediction, health and education, and a dialogue on women’s empowerment.”

Krishna said he had received “some feedback” from members of the US business community on the implementation of the nuke deal.

John Schlosser, vice president at 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 CSC.”

A US business analyst, who has been following the liability issue closely, said: “It is every bit as vital for Indian companies that this issue be resolved.”

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

The bill has become a controversial issue in India where the experience of the 1984 Bhopal disaster — in which poisonous methyl isocyanate leaked from a Union Carbide plant killing thousands and afflicting many more — is fresh in memories and subsequent struggles to receive compensation ongoing.

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

William J. Burns, under secretary of state for political affairs, told a Washington think tank audience on Tuesday: “As the 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.”

Krishna, meanwhile, said the India-U.S. partnership must focus on high-technology cooperation and innovation.