India is planning to ease its nuclear liability laws to cap accident-related p
enalties on equipment suppliers, three government sources said, in a move mai
nly to attract U.S. firms that have been holding back due to the risk of unlimited exposure.
The proposal by Prime Minister Narendra Modi’s government is the latest step to expand nuclear power production capa
city by 12 times to 100 gigawatts by 2047 as well as provide a fillip to India in trade and tariff negotiations with the U.S.
A draft law prepared by the department of atomic energy removes a ke
y clause in the Civil Nuclear Liability Damage Act of 2010 that exposes suppliers to unlimited liability for accidents, the three sources said.
India’s atomic energy department, the prime minister’s office and the finance
ministry did not respond to requests seeking comment.
“India needs nuclear power, which is clean and essential,” said Debas
ish Mishra, chief growth officer at Deloitte South Asia.
“A liability cap will allay the major concern of the suppliers of nuclear reactors.”
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The amendments are in line with international norms that put the onus on the operator to maintain safety instead of the suppli
er of nuclear reactors.
New Delhi is hoping the changes will ease concerns of mainly U.S. firms like General Electric Co. and Westinghouse Elect
ric Co. that have been sitting on the sidelines for years due to unlimited risks in case of accidents.
Analysts say passage of the amended law is crucial to negotiations between India and the U.S. for a trade deal this year that aims
to raise bilateral trade to $500 billion by 2030 from $191 billion last year.
Modi’s administration is confident of getting approval for the amendments in
the monsoon session of parliament, set to begin in July, according to the sources.
Under the proposed amendments, the right of the operator to compensati
on from the supplier in case of an accident will be capped at the value of the contract. It will also be subject to a period to be specified in the contract.
Currently, the law does not define a limit to the amount of compensation an operator can seek from suppliers and the period for which the vendor can be held accountable.