India’s nuclear isolation is likely to come to an end. All the roadblocks to India’s appetite for nuclear power seem to be withering away. With the passage of civilian nuclear liability bill the all the obstacles for US firms entry to much coveted Indian nuclear arena has been removed. This was one of the last steps needed to activate the 2008 Indo-U.S. civilian nuclear agreement as the united state nuclear reactor manufacturing companies will require the liability bill to get insurance in their home state.
Parliament has passed the Civil Liability for Nuclear Damages Bill 2010. It provides for $450 mn of liability cap on suppliers in case of a nuclear accident and paves the way for India to have nuclear commerce with the international community. After this bill becomes an act, India will become a member of the international convention on liability in the civil nuclear arena. It paves the way for U.S. firms and other foreign companies to gain a foothold in India's nuclear energy market, which could exceed $150 billion in coming years.
Although there is no international obligation for such a bill, in order to attract the US companies involved in nuclear commerce such as General Electric and Westinghouse, it was necessary to introduce a liability bill which would help these private companies in getting insurance cover in their home state. Thus, the act was primarily to help in the realization of the Indo-U.S. Nuclear deal. Another motive for the bill is to legally and financially bind the operator and the government to provide relief to the affected population in the case of a nuclear accident.
India has signed civil nuclear deal with several other countries including France, United States, United Kingdom, Canada, Namibia, Mongolia, Argentina, Kazakhstan. India has also signed a US$700 million deal with Russia for the supply of 2000 tons nuclear fuel. Since then American, Russian and French companies have been lining up to establish nuclear power reactors in the energy-starved country. However until the Civil Nuclear Liability Bill is cleared, American companies were at a competitive disadvantage. This is because American companies are privately owned, while French and Russian companies are fully or partly state owned, and their accident liability is underwritten by their governments. So the government wanted to have the bill passed before a possible visit by President Obama to India.
The issue is especially sensitive in a country that experienced one of the world's worst industrial disasters in 1984, when a gas leak in a Union Carbide factory in the city of Bhopal killed an estimated 8000 people. The Indian government was severely criticized for accepting what was called a "paltry compensation" of about $470 million for the victims.
India desperately wants to tap the nuclear energy. Nuclear power is the fourth-largest source of electricity in India after thermal, hydro and renewable sources of electricity. As of 2010, India has 19 nuclear power plants in operation generating 4,560 MW(see the table)while 4 other are under construction and are expected to generate an additional 2,720 MW. India's nuclear power industry is undergoing rapid expansion with plans to increase nuclear power output to 63,000 MW by 2032. The country is involved in the development of nuclear fusion reactors through its participation in the ITER project and is a global leader in the development of thorium-based fast breeder reactors. To achieve these targets foreign companies would be needed to be involved in the manufacture and supply of nuclear reactors.
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