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No scope for change in liability regime, India will tell Obama by B Muralidhar Reddy

On the eve of Prime Minister Manmohan Singh's scheduled meeting with U.S. President Barack Obama on the sidelines of the Asean summit in Bali, Indian officials said they did not know whether the newly notified rules for implementing the Nuclear Liability Act would address American concerns about nuclear suppliers being exposed to claims for damages in the event of an accident but insisted that the “law of the land” could not be diluted.

Since the adoption of the Civil Liability for Nuclear Damages Act by Parliament in August 2010, Washington has been demanding that the Indian legislation conform to international conventions which have more lenient provisions for the suppliers of nuclear equipment.

Senior officials said the liability rules were within the framework of the liability law and Indian statute. “We do not know if the U.S. concerns are addressed in the new rules. The Indian position has been consistent. It can't be any one's case that the law of the land would not apply. There is supplier's liability in every law. We don't see the Liability for Nuclear Damages Act as any different,” an official said.

With the subject likely to come up at Dr. Singh's meeting with Mr. Obama on Friday, the officials said neither the liability Act nor its implementation rules were an “obstacle” in the way of foreign nuclear companies wishing to do business in India. “They are consistent with Indian law and leave no scope for anyone to raise questions.”

The scheduled 30-minute interaction will be the first proper meeting of the two countries at that level since the high-profile visit of the U.S. President to India in November 2010.

The new liability rules open a window for suppliers to limit their exposure by making them liable only for accidents which occur within five years of a reactor licence being granted. A time and monetary limit would govern any ‘right of recourse' claims by Indian reactor operators for an accident caused by faulty equipment. But they leave untouched the right of victims to press for damages under ordinary tort law, something Washington has objected to.

With the Fukushima atomic plant explosion fresh in mind and opposition within India from sections of political forces and civil society, the Manmohan Singh government cannot afford to be seen as soft on the issue. A section of the Opposition has already charged the government with pandering to foreign interests in framing the rules.

On issues likely to figure in the interaction between Dr. Singh and Mr. Obama, the officials said progress on bilateral issues since the U.S. President's visit to India would be ‘paramount.'

‘Marine security' in the Indian Ocean is not expected to be the centrepiece of the talks. The officials conceded that the so-called heightened involvement of Beijing in the region had been a major concern to the U.S. allies in the East Asian region.

They described the India-U.S. relations as in ‘good shape' and maintained that both countries were engaged in dialogue on a wide range of issues of mutual interest, not confined to Pakistan or Afghanistan.

The Eurozone crisis and the domestic economic and political scenario within the U.S. might also figure in talks, the officials said. “The relationship between India and the U.S. is evolving and would keep evolving in tune with the dynamics of the changing ground situation.”

On the latest report of the International Atomic Energy Agency on the Iranian nuclear programme, the officials said several drafts on the position to be adopted were in circulation and India was confident that a draft acceptable to all the sides would be worked out in a couple of days.

“Obviously, no one would like the emergence of another nuclear state,” the officials said, suggesting that a difference had to be made on the nuclear programme for peaceful purposes and a project which had the potential to lead to development of a nuclear weapon.

On the latest U.S.-Australia pact on positioning American marines in Australia, the Indian officials were cautious in their response. They said India would be in a position to articulate its views only when the finer details of the deal were known. “We have no idea how many troops would be stationed and what kind of troops are likely to be present on the Australian soil. We see it as a political message by Washington.”