'India shouldn’t cave in to US on nuclear liability'

India's new nuclear liability law makes suppliers and builders of nuclear reactors liable in the event of an accident. The US is up in arms because private American firms say that’s broader than a 1997 accord signed by more than 80 countries in the wake of the Chernobyl disaster that limits compensation claims to operators.

Henry Sokolski, executive director of the Nonproliferation Policy Education Center in Washington, weighs in on US media reports suggesting that the White House and US state department officials are now straining to figure how to work around India's new law.

The US media has suggested American officials are discussing three options with their Indian counterparts, including one where state-run Nuclear Power Corporation of India will sign contracts promising to take on all liability with US suppliers.

Sokolski talks to DNA in New York about how India has nothing to gain by bending the rules for American suppliers. Sokolski earlier served as the deputy for nonproliferation policy in the office of the US secretary of defence.

Are US diplomats preparing for president Obama’s planned November visit to India lobbying their counterparts in an effort to tweak the nuclear liability law? What are some of the options on the table?
Industry and some of the big supporters on the US-India nuclear deal are certainly lobbying our government. Major newspapers here report that our government is considering these pleas and may well lobby — if they aren’t already — the Indian government along the lines that they are being pressed by these backers of the Indian nuclear deal.

One idea is to get president Barack Obama and prime minister Manmohan Singh to trump India’s liability law by striking a bilateral agreement in which India would pledge to indemnify all foreign nuclear firms.

Are they also looking at getting the Indian prime minister to nullify the law using former US president George Bush’s favourite ploy — a presidential signing statement explaining how he intends to ignore certain provisions.
Perhaps. What Bush and even Obama does at signing ceremonies for legislation is say “Well you should understand that I am not going to implement this part of the law and that part of the law”. Executive power in democracies is such that it is a rare day that an executive branch leader does precisely what the law calls for, but announcing at the time of a law's passage is boorish behaviour — it isn’t that it is totally illegal. But it is boorish.

In this case, it would be much worse than bad form. After all, the whole point of the liability law that was passed in India was to dwell on protecting the right of Indians to sue foreign nuclear vendors. I don’t think it is an executive branch prerogative to say that because they implement the law they can totally pervert it. Saying you may not focus on a certain provision as much as others, is one thing. To say that you would pervert the entire intent of the legislation frankly constitutes a constitutional challenge.

Do you think Washington is likely to get an exemption for US nuclear suppliers?
Washington can only get what India gives. If the Indian government in its wisdom chooses to subvert the law that it just passed then Washington gets what it wants. If India doesn’t choose to do that — then it doesn’t matter what other governments, including the United States, request.

Are you saying India doesn’t have anything to gain from caving in to US pressure since it has created a law that works for Indians?
I don’t see how it does. I can’t speak for Indians but as a foreign observer it is a mystery to me why they would do it. After all, India has insisted on a number of things that are to my view, as someone concerned about the spread of nuclear weapons, extremely obnoxious. They have insisted and gotten their way. It seems odd that having done all that damage that when they get to something that really matters, they should cave. It would be quite odd if they did.

It said that if the two sides can’t find a workaround, US companies such as General Electric and Westinghouse would pass on the Indian market as the liability risks are too high. What do you think?
In the nuclear area it is likely they will. But there is so much more business that is far more lucrative that is going on and can be expanded. India is a country whose economy is likely to continue to expand. Certainly, Westinghouse and GE have products other than things nuclear — conventional engines, control systems, turbines - that they can sell to India. I don’t see as this really as damaging their export sheet or that of other major US exporters — US-Indian trade will continue to rise.

Wouldn’t the simple thing be for private US nuclear suppliers to insure themselves and not ask Delhi to do it for them?
It would but my hunch is that they won’t for some time. I have pleaded that they should start thinking of self-insuring because in the United States they are protected very heavily against lawsuits for damages off-site as well. They are limited in what they have to pay. Those protections legally will go away in 2025. It seems that what the Indians have unwittingly done is give those companies in the US a wake-up call in general. Our nuclear firms in the US need to recognise that these protections, both domestic and foreign, cannot be relied upon indefinitely. If they want nuclear power in America to thrive, they need to get their insurance portfolio sorted out in a way that involves greater self-insurance for off-site damages.

Is it possible for India to ignore US pressure given that some see the nuclear deal as a proxy for Indo-American relations, and it augurs well for future geostrategic, defence and economic ties?
It was a mistake to associate the sale of US reactors in India as a proxy for anything remotely similar to the status of our
relations. Trade relations have improved steadily without one reactor sale — even before this deal came along. The idea that this deal is a figure of merit for our relations is a big mistake. As I explained in my Wall Street Journal piece this week, here are much bigger things to be done to strengthen US and Indian ties than sell or not sell these reactors.