U.S. and India Come to an Understanding on the Nuclear Energy Agreement

U.S. and India Come to an Understanding on the Nuclear Energy Agreement

In 2006 Washington and India first reached a nuclear energy understanding  which was to have allowed New Delhi access to nuclear technology and fuel without giving up its weapons program. Then, in 2008, a 45-state Nuclear Supplies Group approved a policy of nuclear cooperation with India and another nuclear power agreement was made between the U.S. and India, called the United States-India Nuclear Cooperation Approval and Non-proliferation Enhancement Act. However, progress stalled due to India’s nuclear liability law whereby equipment suppliers were ultimately responsible for an accident, and India declared that it would not protect U.S. companies from liabilities that arose from nuclear power incidents in India. The United States, for its part, had insisted that it be able to monitor U.S. fissile materials on the subcontinent. President Obama used his presidential powers to waive that stipulation marking a key achievement in his weekend trip to the subcontinent and meetings with Prime Minister Narendra Modi in January 2015.

President Obama and Prime Minister Modi
President Obama and Prime Minister Modi

After six years of gridlock, the United States agreed that the International Atomic Energy Agency would be responsible for inspecting U.S.-based fissile material in India. “Today we achieved a breakthrough understanding … and we’re committed to moving towards full implementation,” the president said.

The vendors  will be able to buy insurance coverage  for projects involving involved in plant construction or prodct delivery in India but the finer details will have to be worked out. New Delhi also proposed setting up an insurance pool with a liability cap $244 million. The state-run Nuclear Power Corporation of India would pay premiums to cover its liability. Suppliers would take out separate insurance against their secondary liability ─ which could not exceed that of the operator ─ at a “fraction” of the cost.

“The India nuclear insurance pool is a risk transfer mechanism which is being formed by GIC Re and four other public sector undertakings in the general insurance business in India,” foreign ministry joint secretary Amandeep Singh said.

India still has to ratify a U.N. nuclear convention, and Indian officials are hopeful of completing the process this year.

Business Standard reports that the Indian standing committee on science and technology, environment and forest said the agreement was within the fundamental policy and legal architecture, including the Civil Liability for Nuclear Damage Act. The chairman of the committee, Ashwani Kumar disclosed that a safety audit of all nuclear plants had been effected, and that the average tariff of a nuclear project in 2013-14 was $0.04.

General Electric and Westinghouse, a unit of Japan’s Toshiba, were informed of the meetings of a nuclear “contact group” that chalked out the nuclear compromise in London, reports Reuters. Westinghouse is expected to locate in Mithi Vardi, Gujarat to build six reactors, while GE Hitachi Nuclear Energy is expected to work on a similar project in the eastern state of Andhra Pradesh.

“Ultimately, it’s up to the companies to go forward, but the two governments came to an understanding,” U.S. Ambassador Richard Verma told reporters, according to Nuclear Street.

India has 21 nuclear reactors with an installed capacity of 21,300 MW. It plans to launch construction of 40,000 MW of capacity in the next decade.


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