July 31, 2010 – By Corbett B. Daly
WASHINGTON (Reuters) - The United States and India on Friday formally signed an agreement on reprocessing spent nuclear fuel that U.S. officials hope will allow American firms a share of India's $150 billion nuclear energy market.
The agreement, signed by U.S. Undersecretary of State for Political Affairs Bill Burns and Indian Ambassador to the United States H.E. Meera Shankar, will enable Indian reprocessing of U.S.-originated nuclear material under the International Atomic Energy Agency safeguards.
It is part of the countries' 2008 bilateral civilian atomic pact that ended India's nuclear isolation after its 1974 atomic test. The pact gave India access to U.S. technology and fuel, while also opening up the global nuclear market to India.
"Increased civil nuclear trade with India will create thousands of new jobs for the U.S. economy while helping India to meet its rising energy needs in an environmentally responsible way by reducing the growth of carbon emissions," the U.S. State Department said in a press release.
The pact is expected to enter into force in early August. But a hurdle remains before U.S. firms are expected to begin participating in the Indian nuclear market.
U.S. firms are reluctant to do business in India without legislation that underwrites their compensation liability in the case of industrial accidents.
Legislation to limit nuclear firms' liability in the case of industrial accidents has stalled in the Indian parliament, though it has been cleared by the cabinet.
Opposition parties seek to put a maximum liability of about $450 million on the state-run reactor operator without placing any compensation burden on private suppliers and contractors.
India has offered to tender construction of two nuclear power plants, a business opportunity worth $10 billion, to U.S.-based firms such as General Electric Co and Westinghouse Electric Co, a subsidiary of Japan's Toshiba Corp.
But the liability issue has put U.S. firms at a competitive disadvantage over Russian and French firms whose accident liability is underwritten by their governments. The Russian and French have already been awarded contracts.
(Reporting by Corbett B. Daly; Editing by Jackie Frank)
