If a foreign supplier's liability is limited, the Indian tax payer will have to pay in case of a nuclear accident like Fukushima in Japan, Russia's Chernobyl disaster or the Three-Mile Island accident in the US. The Fukushima accident in 2011 cost an estimated 50-70 billion US dollars.
India's only nuclear operator Nuclear Power Corporation of India or NPCIL is reportedly reluctant to enter into a special works agreement with US-based operator, Westinghouse Electric Company. It warns, sources said, that indemnifying the foreign company for life could have serious ramifications.
Indian law makes a supplier liable for an accident. But the government reportedly argues that its proposed move has the backing of the Attorney General of India, who had taken a similar stand on a deal with Russia last year for the Kudankulam nuclear power plant in Tamil Nadu.
The Attorney General says NPCIL, as the operator, can decide whether or not to incorporate the liability provision in its contract. It is a matter, he says, of "legality not policy."
NPCIL, sources said, is under pressure from the government not to insist for this clause to be included in its deal with the US company, expected to be signed when Dr Singh visits the US.
India is desperate to pursue a robust nuclear power policy for the foreign investment it is expected to attract.
"We broke up with the UPA on this issue. Manmohan Singh it seems has personally committed to the US government. We don't agree with this and strongly oppose," Left leader D Raja told NDTV today.
The Indo-US civilian nuclear deal, signed in 2008, was billed as the cornerstone of the burgeoning strategic partnership between the two countries. But five years later, the deal has not gone according to the script, and the US says the nuclear commerce has not benefited the Americans who did most of the global diplomatic heavy lifting.
India's people-friendly nuclear liability regime has reportedly irked the US. Last month, Richard Stratford, director of nuclear energy, safety and security at the US state department, said, "The nuclear issue is complex. US is not frustrated but India's nuclear liability law is a concern and it is unfortunate that nuclear trade has not commenced."