India, US will need to iron out irritants to take bilateral ties forward: Expert

Washington, Sep.1 (ANI): Washington and New Delhi need to move past the recent irritants in the relationship caused by domestic politics in both countries so that this important bilateral partnership will continue to advance, feels Lisa Curtis, a senior research fellow for South Asia in the Asian Studies Center at The Heritage Foundation.

In an article for the Heritage Foundation, Curtis says that India's parliament has passed a flawed civil nuclear liability law-one that threatens to cast a pall over the historic U.S.-India civil nuclear deal. The deal, which involved the U.S. spearheading a contentious international push to provide India access to nuclear fuel and technology for the first time in 35 years, is seen as the bedrock for the developing strategic partnership between the U.S. and India.

She further goes on to say that Washington had hoped New Delhi would pass crucial legislation establishing an internationally compliant civil nuclear liability regime that would facilitate U.S. investment in India's nuclear industry. Such legislation would have been the last step in completing the U.S.-India civil nuclear deal, which has drawn out over five years now.

U.S. policymakers and industrial leaders were thus taken off guard when the legislation (titled the Civil Liability for the Nuclear Damages Bill, 2010) passed the Upper House of the Indian parliament yesterday despite retaining language inconsistent with international standards for engaging in nuclear commerce.

The law includes language that makes suppliers of equipment, raw materials, and services liable-beyond the recourse already available through the courts-for 80 years after the construction of a plant in the unlikely event of a nuclear accident.

Curtis says in her article that Indian business groups have denounced the legislation.

She reveals that the New York Times described the law as bucking international norms by making suppliers potentially liable for nuclear accidents and questions whether any foreign or Indian energy company would now be willing to enter the Indian civil nuclear market.

Most damning, India's own Nuclear Power Corporation of India-the state-owned operator of India's existing reactors and suppliers' only prospective customer-has been scathing in its criticism, warning that "no manufacturer, Indian or foreign, would be able to serve the nuclear power industry" under the provisions of this new law.

Russia, which also hopes to construct several nuclear power plants in India in the coming years, has also reportedly told Indian officials that it will not accept any liability for the supply of equipment and other material it provides to India's nuclear sector.

"This latest obstacle in the U.S.-India nuclear deal is unfortunate, as it follows the successful completion of a U.S.-India nuclear reprocessing agreement earlier this year, which granted India the right to reprocess spent nuclear fuel. India was able to secure significant concessions in the reprocessing accord, particularly by gaining approval to operate not just one but two reprocessing sites. Only countries in Europe and Japan have been able to negotiate this type of special arrangement with the U.S.," Curtis said.

"There is still an opportunity to find solutions to these issues before President Obama visits India in November, but both sides will have to step up their engagement and find common ground on issues of mutual interest," she concludes. (ANI)