An agreement reached Sunday between the United States and India that the Obama administration said aims to at long last clear hurdles on a previous deal to allow U.S. nuclear energy technology firms to sell their wares in the subcontinent.
The deal addressed concerns from U.S. companies over a 2005 agreement that they said would hold American firms liable for accidents or malfunctions in India. That deal, signed by former President George W. Bush, aimed to increase civil nuclear cooperation between the countries, but the liability question has kept U.S. companies out of India.
“I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability,” Indian Prime Minister Narendra Modi said in a joint statement with President Obama.
India is one of the few nations that penalizes companies for such incidents. While the details were scarce, India claims a $122 million insurance pool it’s setting up will solve the issue. But it’s unclear what would happen if unlimited damages claims result from a disaster, such as the 2011 Fukushima reactor meltdown in Japan that forced 160,000 people to flee their homes.
Deputy National Security Adviser Ben Rhodes called the agreement a “breakthrough.” U.S Ambassador to India Richard Verma said the agreement on how to interpret liability “comports with international understanding,” but that ultimately, “it’s up to the companies what to do.”
India represents a potentially lucrative market for U.S. companies, which have relied on export markets as high costs and competition from cheaper, more quickly built natural gas-fired power plants dims the industry’s domestic prospects. The country is planning to spend $182 billion expanding nuclear power to improve access to the nearly one-quarter of India’s 1.2 billion people who lack reliable electricity, according to Bloomberg.
