Check one. The first of three outstanding issues holding up the full implementation of the U.S.-India Civil Nuclear Agreement has been completed: negotiations have been successfully concluded on the U.S.-India agreement on the reprocessing of spent nuclear fuel. The agreement will enable Indian reprocessing of U.S.-origin spent nuclear fuel under International Atomic Energy Agency safeguards.
As previously discussed, however, two important issues remain.
First, it has been rumored that the completion of the reprocessing agreement, a major Indian priority, will be followed shortly by the Indian government’s granting of the “Part 810” assurances required by the U.S. Department of Energy to authorize U.S. companies to participate in most aspects of civil nuclear activities abroad.
The second issue, dealing with nuclear damage liability, is more complicated. Pending legislation on this issue was shelved in the Indian parliament three weeks ago and is yet to be re-introduced. The legislation has faced political difficulties because various domestic forces in India have deigned it a demand from U.S. nuclear fuel suppliers to simply duck their liability in case of an accident. However, this is far from the truth, as all foreign and domestic nuclear suppliers need such a law in place to operate effectively in the Indian nuclear market. French and Russian suppliers are essentially being backstopped by their home governments and thus have not demanded this legislation prior to their entry into the Indian market. And, without such a law in place, in the unfortunate case of a nuclear accident, injured Indian citizens will be left holding the bag with no legal recourse and Russian and French nuclear suppliers could simply play the sovereign immunity card. As a result of this stalled legislation, India also has been unable to join the Convention on Supplemental Compensation for Nuclear Damage, which not only puts in place liability protections for foreign nuclear energy suppliers, but protects the interests of Indian citizens in the case of a nuclear accident.
Hopefully, Prime Minister Manmohan Singh will show strong leadership so that these two pending issues are taken up immediately to allow the benefits of the Civil Nuclear Agreement to flow to both sides.