Indian lawmakers approve key nuclear bill

Aug 26, 2010, 9:00 GMT

New Delhi - India's lower house of parliament has approved a bill which is set to open up the country's nuclear power sector to global firms, news reports said Thursday.

The Civil Liability for Nuclear Damage Bill - which makes suppliers liable for accidents caused by defective equipment and provides for compensation - was cleared after a five-hour debate by lawmakers Wednesday evening, the Hindu newspaper reported.

The bill, which featured 18 amendments following pressure from opposition parties, allows foreign firms to build nuclear reactors for India's 150-billion-dollar nuclear energy market.

Members of Parliament of the Lok Sabha (lower house) approved the bill after the government tripled the accident liability of the nuclear power operator from 5 billion rupees to 15 billion rupees (320 million dollars).

The government said last week the bill was needed to bring India in line with international standards and enable trade with foreign suppliers of nuclear materials and technology.

US firms require the legislation before they can trade with India, as do French and Russian suppliers, officials said.

The passage of the bill marked the 'completion of a journey to end the apartheid against India in the field of atomic power', Prime Minister Manmohan Singh, who participated in the debate, was quoted as saying.

Nuclear power was the best and most cost-effective way for the country to secure its energy needs, Singh added.

The bill is now set to go before the Rajya Sabha (upper house) where it is expected to be passed smoothly.

But the law met with criticism from Indian business groups which said it went against international norms and would stall the growth of the nuclear manufacturing industry by deterring domestic and foreign companies from bidding for projects.

The bill, after the amendments, makes it easier for the operator of nuclear stations to extend liability claims to equipment suppliers, including foreign reactor vendors, in the event of a nuclear accident.

According to Confederation of Indian Industry (CII) any civil nuclear liability claim imposed on suppliers and service providers beyond their terms of supply would render the participation of private players in the atomic sector 'impossible.'

CII head Chandrajit Banerjee also said it contravened the global practice of limiting liability to operators, the Economic Times reported.

Under the bill, nuclear suppliers will be liable for damages in case of an incident over the entire 60-year plant life, in addition to a claim liability period of 20 years.

'Such kind of long-term insurance coverage for suppliers is not available globally and hence would stall the growth of the nuclear manufacturing industry in India,' Banerjee was quoted as saying.

A three-decade ban on trade in nuclear materials with India was lifted by the 45-member Nuclear Suppliers Group in September 2008 after India and the US signed a landmark civilian nuclear agreement, despite India being not a signatory state of the Nuclear Non-Proliferation Treaty.

Following the India-US nuclear accord, New Delhi signed similar pacts on civilian nuclear technology with seven countries including France, Russia and Canada.