US officials try to scuttle India-US N-deal

pmaitra

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American officials put up hurdles, try to scuttle India-US nuclear deal

NEW DELHI: A newly constituted contact group on civil nuclear issues between India and the US will meet for the first time in December, almost three months after it was announced. While the focus of the talks may be on nuclear liability matters, India is facing fresh obstacles from the US nuclear establishment.

The US is now demanding fresh bilateral safeguards to complete the final negotiations on the nuclear deal. These are in the nature of non-proliferation assurances, many of which have already been provided by India.

India and the US are yet to complete the administrative arrangements that are needed to operationalize the deal. This has taken over two years to complete, and despite a seemingly positive note from the Modi-Obama summit, Indians are hard put to find "problem-solvers" within the US system. In fact, there is a distinct feeling in India that elements within the US administration really don't want the nuclear deal to succeed. The Democrats in power now were at the vanguard of the opposition to the deal when it was being negotiated under a Republican administration.

READ ALSO: US holds the key to India's civil nuclear programme

While this may not be the approach at the very top, it's becoming a regular feature among mid-level US officials, making progress on the deal increasingly tough. The upshot is that the delays Indians feel are being deliberately built in, will have an adverse impact on US companies — Westinghouse and GE — seeking to build nuclear reactors in India.

It's not that the issues are not difficult to deal with. Certainly on the issue of nuclear liability, India has to do a lot of heavy lifting to make it easier for Indian and foreign companies to invest in the nuclear energy sector. Moreover, getting a low enough price for nuclear power will be a challenge when commercial deals are negotiated. But the Indian negotiators say both countries are streets away from that space yet.

Under the separation plan, India has voluntarily put barriers between its civilian and strategic programmes, with the civilian sector under full IAEA safeguards. India added on the additional protocol with the IAEA, another layer of more intrusive verification. All of these are part of the India-US nuclear deal.

However, the US is now asking for fresh bilateral verifications, particularly on tracking of nuclear fuel through the entire cycle. This has posed fresh hurdles in the nuclear deal. India is unwilling to go down this road, believing, correctly, that this would undermine an international institution like the IAEA, not to speak of opening the door to more unilateral action in the nuclear sphere by states.

The Modi-Obama summit declared that India had completed the procedures necessary for joining the global non-proliferation regime of the four groups - Australia Group, Wassenaar Arrangement, Missile Technology Control Regime (MTCR) and Nuclear Suppliers Group (NSG). India would now want this process to be completed as soon as possible.

READ ALSO: Chronology of the India-US nuclear deal

Although this issue is not on the new bilateral Contact Group's agenda, India is likely to highlight the US presidential commitment in the nuclear deal about facilitating its entry into these non-proliferation regimes.

When the green light flashes, India will be ready with a formal application. In the coming weeks, India is expected to push the Americans hard.
Source: American officials put up hurdles, try to scuttle India-US nuclear deal - The Times of India
 

ezsasa

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As long as democrats are in office we should not be expecting too much on nuclear deal. Let's just hope they don't come to power next term.
 

Singh

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Americans are trying to put pressure because India is partnering with non-American firms for setting up nuclear plants.

Although the Nuclear liability clause will have to be reworked; no firm in the world will agree to such a liability clause.
 

Hari Sud

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Let Obama go and Republicans beat soundly Hillary Clinton, until then this deal will be under question all the time.
 

prohumanity

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Same old song: " Anything to continue hegemony..la la la !!!!" It's the govt stupid ! American people are decent ,lovely human beings who admire India and its rich culture.
 

Kshatriya87

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Maybe we should cancel this deal from our side and get the fuel somewhere else, like Australia. That will teach USA a lesson.
 

pmaitra

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Economically, the U.S. was attracted to the vast potential India's large and growing nuclear energy market had for domestic nuclear firms. This viewpoint failed to take into account India's domestic nuclear liability law, which obliges nuclear suppliers to be liable for damages their equipment results in. Many U.S. companies have balked at this requirement, and the economic gains of the deal have failed to materialize accordingly.

For many in Washington, the nuclear deal similarly failed to tie India closer to the U.S.-led global non-proliferation and arms control architecture. India has defied American expectations by making no concerted effort to sign the Comprehensive Test Ban Treaty (CTBT), and has shown no interest in voluntarily halting its production of fissile materials (enriched uranium or plutonium). More troubling for many in Washington is India's continued refusal to parrot the American line regarding Iran's nuclear program.
Rather than actively balancing China, India has mostly pursued a hedging strategy, as most prominently demonstrated by the unofficial but influential Nonalignment 2.0 report from earlier this year. As Ashley Tellis presciently remarks, "for the U.S., which has just recovered from India's Nonalignment 1.0, Nonalignment 2.0 is a strategic nightmare." Whether India is explicitly pursuing a nonalignment redux policy or not, there's little doubt that it has tried to avoid creating an overwhelming dependence on American military hardware.
But most importantly, the pessimist picture suffers from a selective marshaling of evidence. For example, the issue of liability notwithstanding, the interests of American nuclear firms are being advanced by the Indian government over other foreign suppliers. In fact, just before President Bush signed the Indo-U.S. civilian nuclear agreement into law, India promised to exclusively reserve approximately 10,000 MW of the nuclear reactor market for U.S. vendors. No such promises were made to other advanced nuclear technology powers. Similarly, by early 2009, two prominent locations in the industry friendly states of Gujarat and Andhra Pradesh had been reserved for the American companies Westinghouse and General Electric. As Saurav Jha rightly argues, India has only offered two dedicated locations for reactor development to American firms. Furthermore, earlier this year, U.S.-based Westinghouse and the Nuclear Power Corporation of India Limited signed an "Early Works Agreement" for setting up five nuclear reactors at Mithivadi in the state of Gujarat.

India's nuclear liability law does indeed create an obstacle for U.S. firms. But it is more a result of India's democratic processes and also, to a large extent, the changed perceptions of nuclear energy after the Fukushima crisis. In fact, when the law was initially proposed, the Indian government categorically rejected any liability claims against nuclear technology suppliers. However, the memories of the Bhopal Gas tragedy and the legitimacy crisis which unfolded after Fukushima would bind the hands of the Indian government. In any case, under Indian law the supplier's liability is limited in both the dollar amount that can be incurred — U.S.$91 million — and the time frame companies can be held liable for. Moreover, given the sheer size of India's nuclear energy market, any amount incurred from one plant is almost certainly to be made up for by the profits made on other plants. This is especially true given the stricter safety standards of modern generations of nuclear reactors. Indeed, it's telling that as American companies balk at the nuclear liability law, other advanced nuclear exporters like France are eagerly entering India's nuclear market.

Additionally, whatever economic benefits the U.S. hasn't obtained from India's nuclear industry pale in comparison to the enormous profits U.S. defense companies have reaped from sales to India. Despite India's reservations about becoming too dependent on American military hardware, over the last seven years U.S. defense corporations have received more than U.S. $8 billion worth of contracts from India, increasingly displacing Russia as India's preferred military supplier. This is occurring despite the enormous stipulations Washington places on arms contracts and the difficulty recipient nations often have in securing spare parts for their purchases over the entire course of the contract.
Full article: Paying Dividends: The U.S.-India Nuclear Deal Four Years On | The Diplomat

[HR][/HR]

The Civil Liability for Nuclear Damage Act, 2010 is an Indian law. To operate in India, one has to abide by this law, just like Indian companies and citizens living in the US abide by US Federal and State Laws.

Here is the PDF of the Bill passed by the Lok Sabha: http://www.prsindia.org/uploads/media/Nuclear/Nuclear Damage BIll, 2010.pdf
 

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