News Wrap: Breakthrough Predicted on Nuclear Liability Issue

Although it has been nearly ten years since a U.S.-India Joint Statement announced the Civil Nuclear deal, there has yet to be a single sale of nuclear supplies from the U.S. to India. All of that could change shortly if Indian and U.S. representatives are able to come to a compromise that would diffuse the liability issue that has haunted the deal and prevented its consummation. On January 21, 2015, representatives from both governments met in London in an attempt to find a “workaround” for the liability issue. 

The Times of India suggests that resolving the issue could be a major deliverable during President Obama’s visit to India for Republic Day.

“The Indian government 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.”

The Indian Express offers optimistic chatter from Indian officials regarding a general agreement to move past attempts to eliminate the liability law.

“Indian government sources claimed the US appeared to be finally moving from its position on the nuclear liability law — from being advocates of amending the law to getting guarantees from the Indian side on tort law claims. The Indian side, the sources said, was proposing an insurance pool as an effective cushion for the suppliers’ liability.”

The Indian Express further claims that the two governments are trying to work out a deal where the Indian government would guarantee that U.S. suppliers would be shielded from claims under tort law.

“New Delhi and Washington, the sources said, are discussing the “legal formulation” for an “assurance” from the Indian government so that compensation claims cannot be sought under the tort law — a law that offer remedies to those harmed by civil wrongs. Both sides have exchanged drafts on this issue and are working on an appropriate language, sources said…” they are worried that this may open the backdoor for lawyers to demand compensation under the tort law. So, they want an assurance. We have to give them that assurance. Now both sides are working on the language of the assurance,” a senior Indian official, privy to the discussions, said.”

LiveMint quotes U.S. officials as being similarly optimistic about consummating the deal.

“Meanwhile, US ambassador to India, Richard Verma, also exuded hope that there will be progress on the deal. “We continue to be hopeful of implementing the civil nuclear agreement to fulfil the PM (Narendra Modi’s) goal of providing electricity to all Indians by 2020,” he said at an event.”

While much of the negotiation happens between bureaucrats, The Hindu quotes U.S. Ambassador Verma on the Head-of-State interest in fixing the liability issue during the upcoming state visit.

“Mr. Verma said President Barack Obama and Prime Minister Narendra Modi would try and address the logjam in the nuclear deal during the visit of the former next week.”

India’s former ambassador to the IAEA, Sheel Kant Sharma, expresses concern that India has not been able to conform to international standards surrounding nuclear liability in his recent opinion piece in The Indian Express.

“Thus, even when falling crude prices knock the bottom out of the economics of new startups, existing plans made by other governments progress with speed. It is extraordinary that for none of these governments, nuclear liability demands such innovative thinking as in India. No one has enacted a law that transcends the existing international conventions on liability — which essentially cover the state versus operator dyad — to extend unqualified liability to suppliers. In the meantime, not just governments but big multinational corporations like Westinghouse, Areva, Toshiba, etc, too have been at work to set rules convenient for nuclear commerce.”