A senior U.S. State Department official last week said India's nuclear liability law undermines the potential for the United States to become an atomic trade partner to the South Asian state.
A 2008 accord allows the United States to sell nuclear technology and materials to India, but actual trade has yet to begin.
The primary obstacle appears to be New Delhi's legislative rule that leaves foreign atomic energy product exporters financially liable in some cases for accidents at sites that employ those firms' technology. Global practices make only the operators of nuclear reactors liable in incidents.
"India’s nuclear liability law is not in line with the international nuclear liability principles reflected in the Convention on Supplementary Compensation for Nuclear Damage," according to Principal Deputy Assistant Secretary of State Geoffrey Pyatt. "Current liability law and regulations impose the risk of a heavy financial burden on equipment suppliers seeking to enter the Indian market and expose such companies to the risk of significant financial penalty in the event of a nuclear accident, neither of which is consistent with international standards.
"Without a law consistent with this convention in place, companies from the United States as well as other nations will find it difficult to participate in India’s nuclear power expansion plans," Pyatt added in a Thursday address to a nuclear export control seminar in Washington.
The Indian-U.S. agreement has been cause for proliferation concern given that New Delhi holds nuclear weapons outside of the Nuclear Nonproliferation Treaty. Under the deal, India agreed to open its civilian nuclear sites to monitoring by the International Atomic Energy Agency.
"While we understand that India’s law is currently being examined by the courts, we believe that consultations with the IAEA would be useful as a means to ensure that the liability law accomplishes our shared objective of moving India into the international mainstream of civil nuclear commerce," Pyatt said. "We want to ensure equal opportunities for American companies to conduct nuclear commerce in India and preserve safety standards."