American Nuclear Power Companies Want India Market

The Bush administration initiated the agreement with India to allow the sale of nuclear reactors and fuel to India, even though the country has nuclear weapons but has not signed the Non-Proliferation Treaty.  The Obama administration supports the agreement.  However, India passed a law last year that would make suppliers of nuclear equipment liable for massive claims in the event of a nuclear accident during the reactor’s lifetime. That raises the risk of doing business in India to levels that U.S. private-sector companies and their insurers cannot accept but that state-backed companies in Russia and France, with the much deeper pockets of their respective governments, might be able to live with. And it puts India far out of step with other countries, which hold plant operators solely liable. So while General Electric and U.S.-based, Japanese-owned Westinghouse Electric sit on the sidelines, France’s Areva and Russia’s Rosatom are moving ahead in inking deals to build reactors in India.

The 1984 Bhopal gas disaster that claimed more than 15,000 lives has made India wary about trusting foreign firms with potentially volatile technologies.  The recent Japan nuclear power plant disaster has only served to fortify India's wariness.

With its economy and its demand for energy growing rapidly, India wants to raise its nuclear power generating capacity from the current 5,000 megawatts a year to more than 60,000 megawatts by 2032.

An additional complication is that before India can buy American and French reactors, New Delhi has to sign a nuclear cooperation deal with Japan. Those reactors use Japanese parts and technology, which cannot be supplied until Japan changes its law to allow nuclear trade with India.  Another complication occurred last month when the Nuclear Suppliers Group, which has about four dozen members, voted at a meeting in The Hague to bar access to sensitive uranium enrichment and reprocessing technology, which can be used to make atomic bombs, to countries that have not signed the Non-Proliferation Treaty.

The Center supports the U.S. effort to build nuclear power plants in India.  And if the U.S. companies are confident in the safety of their technology, there should be no reason for them to adhere to India's self indemnification requirement. (Wash Post, 7/19/2011)