Indian nuclear deals still a thorny issue for US despite ‘breakthrough’

By Katy Daigle ,AP

NEW DELHI — 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 U.S. nuclear companies.

U.S. President Barack Obama’s three-day visit to New Delhi raised hopes for concrete plans to tackle India’s fossil fuel dependency and to resolve a four-year standoff over liability that prevented U.S. and Japanese nuclear energy development on Indian soil. Instead, there were vague commitments and public displays of chumminess between Obama and Prime Minister Narendra Modi.

The two leaders said they agreed to advance a 2008 civil nuclear deal long stalled by concerns about India’s reluctance to allow U.S. tracking of fissile material. It has also been held up by American concerns with an Indian law that makes U.S. 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 U.S.-India breakthrough this week was in narrowing differences on the liability issue. U.S. Ambassador Richard Verma said ��it’s up to the companies what to do�� after India gave an assurance the liability law would be interpreted consistent with international understanding.

‘It’s very unclear’ 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.��

Modi has placed new urgency on India’s nuclear ambitions, with the aim of vastly expanding atomic energy capacity to account for about half the country’s total electricity supply by 2050. 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. But it is both expensive and water intensive, testing two resources already in short supply in India.

In December, Modi reached a deal for 12 new Russian reactors, and in September secured access to Australian uranium. He was unable, however, to reach an agreement last year with Japan, a U.S. ally with decades of nuclear energy expertise.

Indian and U.S. officials said part of the solution to the liability impasse could be a US$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.