India nuke deal still thorny for US

• American experts wary about the fine print
• Since 2010 passage of the liability bill, only Russia, France strike deals with India
• US lost on some of the big-ticket projects
• Insurance liability holds back US and its ally Japan’s firms from trading with India
• Commercial nuclear projects in India expected to be get more expensive
• Hundreds of billions of dollars will be required for insurance
• US experts also foresee only diplomatic breakthrough cannot stand in a court of law
• US helped India get a special status despite latter’s refusal to sign non-proliferation treaty

“If they agreed to limit US industry liability, well how do they do that?”

India and America's declaration of a breakthrough in contentious nuclear energy cooperation has been met with a lukewarm response from industry and analysts. Few expect the potentially lucrative Indian market to suddenly become less complicated for US nuclear companies.

President Barack Obama and Prime Minister Narendra Modi agreed to advance a 2008 civil nuclear deal long stalled by concerns about India's reluctance to allow US tracking of fissile material. It has also been held up by American concerns with an Indian law that makes US nuclear suppliers, not operators of nuclear plants, liable for accidents.

Since India passed the liability law in 2010, only government-backed nuclear firms in Russia and France have discussed entering India's market, annoying Washington which brokered India's special status as a nuclear nation despite its refusal to sign the global treaty on the non-proliferation of nuclear weapons.

The apparent US-India breakthrough this week was in narrowing differences on the liability issue. If anything substantive was agreed, "it's very unclear," said Paris-based energy and nuclear policy consultant Mycle Schneider. "I don't think there's enough information out there that makes it possible to make a coherent statement."

Nuclear power is one way India, the third biggest emitter of greenhouse gases, could cut its emissions and also reduce air pollution from coal-fired power plants. Indian and US officials said part of the solution to the liability impasse could be a $122 billion insurance scheme proposed by India. That would be funded by India's government and Indian nuclear companies, and be managed by the state-run General Insurance Corporation of India, according to Indian nuclear negotiator Amandeep Gill.

US nuclear suppliers welcomed the agreement, though they said they were still reviewing the fine print. GE Hitachi Nuclear Energy, however, cautioned that the ultimate solution should be India's compliance with an international convention on compensation, establishing a global legal regime and compensation fund for nuclear accidents, while requiring that nuclear operators also maintain insurance.

An earlier deal with Westinghouse Electric Co. for a 6,600-megawatt nuclear plant has languished while the liability dispute raged. "We've lost some time and we've fallen a bit behind" with construction agreements with Indian builders on hold, Westinghouse CEO Daniel Roderick said in an interview with Indian broadcaster NDTV.

The liability program would also likely mean that commercial nuclear projects become more expensive. The US is the sixth-largest investor in India and the two countries want to boost their trade to $225 billion by 2025 from last year's $62 billion.