Millennium Post

Generous India gives US what it wants

In a symbolic shift from who is liable for a nuclear power plant accident pays for the damage liabilities (Tort Law), the Narendra Modi-led government has now made the generous Indian government liable to the greatest extent for paying out compensations for the damage, which could be due to a fault of the supplier.

Modi’s government has committed to the US presidential delegation that the New Delhi will create an ‘insurance pool’ with seed money of Rs 750 crores from the government itself, while the suppliers pay premia.

This presumably will open the logjam for the US suppliers of nuclear reactors who are stuck with not being able to force open the Indian nuclear power generation market, because of the Indian Civil Nuclear Liability for Nuclear Damage Act, 2010 that put the onus of paying out compensation to the damaged. The potential cost of that was considered stupendous thus making it unviable to sell reactors to the country.

This grouse of the US manufacturers had been made public almost through a decade at a high pitched level to Indian government and their administrations. It also had affected the bilateral relationship between the two countries as the US thought it should have a privileged provision for themselves as they had opened the closed doors of nuclear developments a chink to allow India to step in.

Manmohan Singh government could not dilute the position it had itself taken because of the pressure of the Leftist parties and even the BJP. But the latter’s own government have now made it possible for the suppliers to take dubious measures to keep the .liability level at the lowest.

In fact, currently the country has not been told how much the insurance premium may be. Dr Gopalan Balachandran in an important presentation on the issue at the Institute of Defence Studies and Analyses (IDSA) had shown that in the USA the annual average premium paid for a single nuclear power generation site is $ 1.1 million.

He has also said that with the French with who New Delhi has contracted for supplies of nuclear reactors the insurance pool strategy has been taking. In case of the Russians, Balachandran had stated there is no liability.

But contrary to these positions, the ‘polluter pays principle’ votaries to which he refers as a stumbling block have sought wide-ranging liabilities. Narendra Modi government sought to ignore these demands with the hope that the US is a friend and will continue to remain so for all times to come. They may get surprised in the future. And the cost of this will be steep.


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