Obama, Modi Move Closer With Breakthrough on Nuclear Liability
President Barack Obama and Indian Prime Minister Narendra Modi said Sunday that they had achieved a breakthrough on long-stalled cooperation on civilian nuclear projects, reflecting warming ties between the nations.
Though Obama said the two countries had taken an “important step,” neither man provided details on how an earlier 2005 U.S. decision to provide India nuclear fuel and reactor components would finally be implemented.
Stumbling blocks have long included Indian legislation allowing nuclear suppliers to be sued over accidents and U.S. insistence that any nuclear fuel sold to India be tracked to prevent weapons proliferation.
“We think we came to an understanding of the liability” issue, said U.S. Ambassador Richard Verma, adding the deal “now opens the door for U.S. and other companies to come forward and help India develop its nuclear, non-carbon-based energy production.”
Power-starved India plans a $182 billion expansion of its nuclear industry to produce electricity for the almost one-quarter of the country’s 1.2 billion people who routinely go without it. U.S. companies such as General Electric Co. (GE) and Westinghouse Electric Co. that have stayed away from India must decide whether the arrangement is adequate, Verma said.
India plans to establish a 7.5 billion ($122 million) insurance pool to shield affected operators and suppliers, according to Amandeep Singh Gill, joint secretary of disarmament in the foreign ministry. The government would provide more at a later date “on a tapering basis,” he added.
Questions Remain
It remains unclear what would happen if unlimited claims come in the wake of a disaster, according to Debasish Mishra, Mumbai-based partner at Deloitte Touche Tohmatsu.
“This is a government-to-government agreement and ultimately the final deals will be signed between companies,” he said. “There’s a feeling that not everything has been resolved.”
India is one of the few nations that do not exempt nuclear suppliers from accident liability. The reason can be found in the central Indian city of Bhopal, where more than 10,000 people were killed or injured in a 1984 chemical leak from a Union Carbide Corp. pesticide plant. The episode remains the world’s worst industrial accident.
Public support for the liability legislation only hardened after the 2011 Fukushima meltdown in Japan, which forced 160,000 people from their homes and will cost an estimated $196 billion to clean up.
Nuclear Tracking
Yet nuclear power is essential to Modi’s promise to provide electricity to all Indians by 2019. With 60 percent of the country’s power coming from coal, Modi has promised to expand the use of non-polluting sources such as solar and nuclear. India’s 3 gigawatts of installed solar power is slated to rise to 100 gigawatts by 2022.
As part of the deal, the U.S. dropped its earlier insistence that it be able to track the nuclear material provided to India, a requirement that went beyond standard International Atomic Energy Agency safeguards, according to Indian press reports.
“Tracking was never going to fly as Indian public opinion would see it as intrusive,” said K.C. Singh, a former diplomat.
It appears the U.S. “caved” on a legal requirement for extensive monitoring to ensure that no U.S. technology is diverted for Indian military purposes, according to Daryl Kimball, executive director of the Washington-based Arms Control Association, an advocacy group.
Leaders Embrace
Obama arrived Sunday morning in Delhi for the start of a three-day visit. Modi departed from protocol to greet him at the airport. The two shared a hug at the bottom of Air Force One’s stairs.
In a joint press appearance, Obama and Modi lavished praise upon one another and expressed determination to deepen an already good bilateral relationship. Modi said they had renewed an expiring pact governing defense cooperation and agreed “in principle” to work together on advanced defense systems such as small unmanned vehicles and unspecified aircraft carrier technology.
The two also issued a “joint strategic vision for the Asia-Pacific and Indian Ocean,” which included an endorsement of freedom of navigation in the South China Sea. That’s sure to get the attention ofChina, which has been at odds with several of its neighbors over disputed reefs and islands there.
Calling the U.S. and India “natural partners,” Obama said they would work together on renewable energy and trade ties. Modi said the two countries would hold more regular summits and establish a “hotline” between his office and the White House.
Live Coverage
The day’s diplomatic choreography -- televised live for hours in India -- showcased the two countries’ relationship in a way rarely seen here. Just eight months in office, Modi has been more willing than his predecessors to be seen publicly as close to the U.S.
“He’s treating the U.S. as a very, very significant part of India going up to the next level as an economy and as a power,” said Baijayant Panda, an opposition member of parliament.
After a working lunch and private talks, Obama and Modi, walking alone on the lawn of New Delhi’s Hyderabad House, held a sometimes animated conversation.
On climate change, the Obama administration has been pushing India to do more. In November, Obama capped a trip to Beijing by securing Chinese agreement to announce a deadline for beginning to reduce its greenhouse gas emissions.
Climate Deal
John Podesta, counselor to the president, said they have a “full commitment” of the prime minister to move forward on phasing down hydroflurocarbons according to the Montreal Protocol.
Air pollution is a worsening problem in India. U.S. officials in the weeks before the summit played down the chance of reaching a similar deal. India, the world’s third-largest carbon emitter, has resisted calls to reduce its emissions, citing its need to lift hundreds of millions out of poverty.
Each Indian is responsible for about 2 tons of carbon emissions annually, one-quarter of what each Chinese produces and just one-tenth of the carbon output of the typical American, according to the World Resources Institute.
Both sides were keen to paint the relationship as already good and getting better.
“It was a different tone that has been set by Prime Minister Modi,” said Ben Rhodes, the president’s deputy national security advisor. “We’ve opened up the door to do a lot more with India in the years to come.”
To contact the reporters on this story: David J. Lynch in Washington at dlynch27@bloomberg.net; Angela Greiling Keane in Washington at agreilingkea@bloomberg.net
To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net Joe Sobczyk
Obama, Modi Move Closer With Breakthrough on Nuclear Liability - Bloomberg




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