Perkovich: Movement on Indian Nuclear Liability Issue Likely

By Eric Auner

There is continuing uncertainty surrounding India's nuclear liability bill, and the extent to which it will discourage foreign, privately-owned suppliers from participating in the country's civil nuclear sector. As the bill is currently written, nuclear suppliers (in addition to the operator of a nuclear facility) may be liable in the case of an accident. This is inconsistent with international standards, such as the Convention on Supplementary Compensation for Nuclear Damage (CSC), which channel liability exclusively to the operator (in this case the government-owned Nuclear Power Corporation of India). Even though some have suggested that India may sign the CSC, as it currently stands private nuclear suppliers will probably not be able to insure themselves against accidents, and will therefore not be willing to do business in India.

Yesterday the Carnegie Endowment held an event to release George Perkovich's new report "Toward Realistic U.S.-India Relations." I had the opportunity to ask his opinion of the nuclear liability issue. He said the issue is a "high priority," and that a resolution that would satisfy the U.S. nuclear industry may be a deliverable of Obama's upcoming trip to India.

Even if this happens, it is clear that an important argument in favor of the U.S.-India nuclear deal--that the U.S. nuclear industry would have access to a lucrative new market--will most likely disappoint its advocates. As Perkovich pointed out, state-owned French and Russian nuclear suppliers can operate much more easily under the existing liability bill. It may turn out that these companies benefit from the huge American diplomatic effort to alter the Nuclear Suppliers Group rules, while American companies are mostly left out in the cold.