Business, Finance & Economics

India finalizes nuclear supplier rules


A delegate of the India Nuclear Energy 2011 summit walks past a stall in Mumbai on September 29, 2011. On Thursday, India finalized rules defining the liability of foreign suppliers of nuclear materials to power plants in the event of an accident. Following a 2008 pact between Washington and New Delhi that removed a bar on supplying civilian nuclear technology to India, the U.S. has argued that India's supplier liability measures are too strict.



India finalized rules for suppliers of nuclear materials and technologies, allowing a time limit for liability to be set by the contract between the supplier and the plant operator, the Indian Express reported.

The decision allows a little wiggle room for U.S. nuclear power plant builders, who had argued that building reactors in India would be untenable if suppliers could be held accountable for accidents long after their work was completed.

Under the rules notified Thursday, the operator of a nuclear facility is solely responsible for paying compensation to victims of a nuclear accident, but can make a claim against suppliers of nuclear materials or technology. 

In addition to letting suppliers negotiate their own time limits on their liability, the rules capped damages to safeguard the interests of nuclear suppliers, however.  The maximum financial liability of an operator was capped at $300 million, and the operator was prohibited from seeking any damages in excess of the amount it pays in damages.

Since the landmark 2008 U.S.-India agreement on civilian nuclear technology freed India from sanctions blocking the transfer of nuclear technology, Washington has argued that India's insistence on making nuclear suppliers liable for future accidents put America's private companies at an unfair disadvantage to the state-supported nuclear firms of France and Russia.

While French and Russian companies might rely on a government bailout in the case of an accident, the argument ran, U.S. firms would have to seek costly private insurance, making it difficult for them to compete on price.