David J Lynch and Angela Greiling Keane New Delhi
US President Barack Obama and Indian Prime Minister Narendra Modi had broken a years-long deadlock on obstacles that blocked the US from selling nuclear technology to Asia’s third-largest economy, they said on Sunday.
The announcement came on the first day of the president’s scheduled three-day visit to New Delhi, the Indian capital. Obama said the leaders resolved two issues stemming from a civilian nuclear agreement reached in 2005, without providing further details.
“I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial co-operation, consistent with our law, our international legal obligations and technical and commercial viability,” Modi said at a joint briefing with Obama in New Delhi.
Power-starved India plans a $182 billion (R2 trillion) expansion of its nuclear industry to produce electricity for the almost one-quarter of the country’s 1.2 billion people who routinely go without it. Despite initial hopes for robust trade, US companies such as General Electric have refused to invest, citing a 2010 Indian law allowing nuclear suppliers to be held liable in the event of an accident.
India said yesterday that it was setting up an insurance pool valued at 7.5 billion rupees (R1.4bn), with the government contributing more at a later date, according to Amandeep Singh Gill, the joint secretary of disarmament in the Foreign Ministry.
General Insurance and four other public sector companies would put up the cash, he said.
“This is a complete risk management solution for both operators and suppliers without causing undue financial burden,” Singh said in New Delhi yesterday.
The US received assurances that India would handle liability concerns according to international norms, US deputy national security adviser Ben Rhodes said.
“We are comfortable that India will live up to its international commitment to channel the liability to operators the way that’s become a custom for international practice the way our companies would expect,” Rhodes said. “It’s ultimately now up to the companies to assess if it’s the right time, the right market, the right risk.”
India is one of the few nations that do not exempt nuclear suppliers from accident liability. The reason can be found in the central Indian city of Bhopal, where more than 10 000 people were killed or injured in a 1984 chemical leak from a Union Carbide pesticide plant. The episode remains the worst industrial accident.
Public support for the liability legislation only hardened after the 2011 Fukushima meltdown in Japan, which will cost an estimated $196bn to clean up.
Yet nuclear power is essential to Modi’s promise to provide electricity to all Indians by 2019. With 60 percent of power coming from coal, Modi has promised to expand the use of non-polluting sources such as solar and nuclear. India’s 3 gigawatts of installed solar power is slated to rise to 100GW by 2022. – Bloomberg