The US on Thursday said there are "serious concerns" that India's nuclear liability law, which determines who pays how much in the event of a nuclear accident, is "not consistent with the CSC (Convention on Supplementary Compensation)".
The US wants India to seek a clarification from the International Atomic Energy Agency, which is likely to endorse the US position forcing India to get its nuclear liability law in line with the CSC.
"There continue to be serious concerns that India's 2010 nuclear liability law is not consistent with the CSC," the state department said in response to a question on why the US wants India to seek a clarification from the IAEA.
Deputy secretary of state William Burns had on Tuesday said US "encourages" India to seek a clarification from the IAEA. This was first said by secretary of state Hillary Clinton when she was in India for the strategic dialogue in July.
The US is clearly getting impatient but doesn't want to be seen pushing too hard.
"The IAEA is an appropriate venue for clarification on issues related to the Convention on Supplementary Compensation on Nuclear Damage (CSC), which deals with international nuclear liability," said the state department.
"The Agency can be helpful in assisting countries in evaluating their compliance with the CSC," it added.
The operator of a nuclear plant, according to a law passed by Parliament in 2010, can in the event of an accident caused by defective equipment seek damages from the supplier. But international norms absolve suppliers of any liability.
Talks between US companies and India have been stalemated on this score with Washington expecting to see the existing law superseded by another law - and not a set of rules -- correcting the objectionable cause.
The US wants India to seek a clarification from the IAEA before ratifying the CSC, which will take more time to come to the same conclusion - that its liability law is out of sync with the convention on damages.
But India doesn't appear keen to take that route. "We can't be seen seeing clarifications to overturn our own law," said an Indian official who has dealt with the issue for a while. He was not hopeful of an early resolution either.
Experts said India might, however, ratify the convention and then wait for a challenge at the IAEA to go back to the lawmakers saying our law has been found violating the international law, and we need to change it.
That might be politically more convenient, they argued.