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How India could nuke itself

The signing of the Indo-US civil nuclear cooperation agreement ended India’s nuclear power sector’s technological and financial isolation. Though not without accomplishment, it was stunted, struggling even to provide 4 per cent of the country’s power needs. Pramit Pal Chaudhuri reports.

delhi Updated: Aug 24, 2010 11:36 IST
Pramit Pal Chaudhuri

The signing of the Indo-US civil nuclear cooperation agreement ended India’s nuclear power sector’s technological and financial isolation. Though not without accomplishment, it was stunted, struggling even to provide 4 per cent of the country’s power needs.

The bizarre political debate over the Civil Nuclear Liability Bill threatens not only the civilian gains of the nuclear deal, it even endangers the native nuclear capability India has developed.

Here’s the bottom line. If a supplier of a nuclear component is responsible for an accident, it can have his back teeth sued off under India’s product liability laws and various Supreme Court judgments about the unlimited liability of a polluter.

This has nothing to do with the Civil Nuclear Liability Bill, which is about a different type of compensation. Under this, who is to blame is irrelevant.

The international norm is to have the operator handle compensation. It can’t be a supplier: one, there are hundreds of them, and, two, they could be out of business by the time a reactor goes kaput.

But this is the damage that nuclear India now faces and the possible consequences:

Wipe out India’s homegrown nuclear industry.

Making the supplier responsible in the same way as the operator ensures the firm’s insurance and finance costs will go through the ceiling. It will scare off foreign firms. But far worse is that it will destroy India’s own nuclear component makers.

“No one realises that India’s own supply chain of nuclear plant providers, about 300 in number, could go out of business,” says lawyer Suhann Mukerji, a member of FICCI’s civil nuclear working group.

Crystal ball: Having spent decades building up a civil nuclear industry, India is in danger of wiping it out thanks to legislative ignorance.

Have a single foreign supplier who has zero liability.

India needs foreign nuclear suppliers because it can’t make 1,000 MW reactors, it does not have much post-Chernobyl safety tech, and it needs them to collaborate with Indian firms so the country becomes a global nuclear tech power.

If India’s breaks international norm on suppliers’ liability, foreigners will run away, except for Russia.

The reason, says nuclear analyst G Balachandran, “Russia has an inter-governmental agreement with India exempting it from compensation.”

Some argue that when Russia completes its World Trade Organisation membership bid, it will stop selling to India anyway.

Crystal ball: Says Balachandran: “If Parliament continues on its present path, India will have only Russian reactors.”

Throttle India’s nuclear industry.

Both Right and Left have joined hands to oppose private nuclear operators in India. This is the future New Delhi envisions: Initially, foreign and Indian nuclear firms will form joint ventures to build components. As Indian firms master the technology, they will build and then export reactors.

“By 2060, India could build as much as 70 per cent of a reactor,” says Balachandran. None of this will
happen if they face unlimited supplier liability.

Crystal ball: Indian firms develop reactors with foreign firms but make and sell them overseas – and keep India out of the loop altogether. This is already on the blueprints of some firms.

Strengthen the India-sceptics.

Indo-sceptics, whether in Washington or Beijing, want the nuclear liability Bill to fail so they can say: “Told you.
Do India a favour and it can’t reciprocate.”

Crystal ball: Diplomatic gains of the past five years will be rolled back. India will remain the country that can’t
say yes.