India-US Nuclear Deal Redux

The tortuous and interminable saga of the India-US civilian nuclear agreement has once again shifted to the forefront of the national political scene.  As is well known to observers of the so-called India-US strategic partnership, a final determined push on the part of the US-based Indian Diaspora and homegrown votaries of the nuclear deal led in October 2008 to the signing into US law of the bill titled “United States India Nuclear Cooperation Approval and Nonproliferation Enhancement Act.”  The “successful” clinching of the civilian nuclear agreement with the US was touted as the crowning foreign policy accomplishment of the first Manmohan Singh administration (May 2004-May 2009).  Since then the sounds of celebration have faded away to be replaced by realities of a rather less euphoric nature. American nuclear industry players have been unwilling to enter into contracts for installing nuclear reactors until India has enacted legislation limiting their liability in the event of a nuclear accident.  The nuclear powerhouses led by General Electric and Westinghouse have been lobbying Washington to bring the requisite pressure to bear on India.  The exemption that was wrangled by the US on India’s behalf from international covenants governing nuclear commerce has given Washington the leverage for dictating terms to the United Progressive Alliance (UPA) government.  Naturally Washington has pressed its advantage.  French and Russian negotiators have been willing to conclude agreements for supplying nuclear reactors without making equivalent demands.  Nevertheless, the Manmohan Singh administration is bound by promises made to Washington in a letter conveying its intention of purchasing reactors with a generating capacity of 10, 000 MW from the American nuclear industry.  This commitment was made at some point in 2008 prior to obtaining the Congressional stamp of approval for the nuclear pact. (1)  The resultant dilemma has been unfolding in the background for some months and has finally erupted into the open.  Consequently the Indian political scene is witnessing for the umpteenth time a massive showdown over the yet to be operationalized nuclear bargain. 


At stake in the current upheaval is the Civil Liabilities for Nuclear Damage Bill 2009 which in effect channels liability to the Indian taxpayer by stipulating a maximum combined liability of Rs. 2087 crore ($458 million) for the government and the nuclear operator in the event of a nuclear accident.  The liability of the operator is capped at Rs.500 crore or $109 million.  Since the operator is a public sector undertaking the burden of payment falls ultimately on the Indian taxpayer.  The bill gives full immunity to the manufacturer and supplier of components for the nuclear reactor.  Some of its provisions elicited objections related to the impact of the law on safety standards and on providing adequate compensation in the event of a nuclear accident from the Ministry of Finance and the Ministry of Environment and Forests.  (2)  These objections were overruled and the Union Cabinet approved the draft legislation.  Parliament however did not prove to be equally malleable.  The Speaker of the Lok Sabha had received 15 objections by 10.30 am on March 15, 2010, the day that the bill was listed for debate.  Fearing it did not have the numbers necessary to secure the approval of the house, the UPA hastily withdrew the bill from the day’s proceedings.  The Opposition on its part made the most of the ruling party’s discomfiture.  That day the leading news channels took note of the unity that was on display in the ranks of the principal Opposition groups, the Left Front and the Bharatiya Janata Party (BJP).  IBN (Indian Broadcasting Network) even opined that such cooperation between Opposition Members of Parliament (MP) was unprecedented.  NDTV’s (New Delhi Television) coverage included a segment in which Yashwant Sinha, BJP MP and former Union Finance Minister, pointed out in Parliament that the Indian bill had set maximum liability at a figure that was 23 times below the minimum laid down by the equivalent US legislation for the nuclear industry.     


The Manmohan Singh government went into damage control mode in the immediate wake of the embarrassing retreat of March 15.  National Security Advisor Shiv Shankar Menon promptly convened a session in which a group of Congress MPs were briefed on the advantages to ensue from passing the legislation.  The Times of India noted that Menon’s session with the Congress MPs, apparently at the behest of PM Manmohan Singh, was seen as an attempt to explain issues raised by both the Left and BJP, in the absence of a House debate. (3)  In particular a strong effort was made to dispel the view that the bill was excessively protective of foreign business interests.  Simultaneously the Opposition led by the Left Parties has been consolidating its ranks and seeking to strengthen its position. The Left leaders held a press conference in which they highlighted the nuclear liability bill’s weaknesses and called on MPs to take a stand against the measure.  (4)  The bill is to be re-introduced in April when Parliament returns after the recess following the budget session.


The nuclear liability bill has been subjected to a series of devastating critiques by legal experts, political analysts and activists.  Several critics of the legislation regard it as tantamount to a vast subsidy for foreign reactor builders.  Strategic thinker Brahma Chellaney has brought out the extraordinary lengths to which the bill goes for the purpose of aiding the business interests of foreign reactor builders and rigging the terms of business in their favor. (5)  Above all the bill’s effort to set unconscionable limits on liability has made it a particularly vulnerable target.  Former Attorney General for India Soli Sorabjee has declared that the law of the land as embodied in Supreme Court rulings views the protection of victims of accidents as a fundamental right under article 21 of the Indian Constitution and provides neither warrant nor justification for capping nuclear liability.  (6)  Mr. Sorabjee’s views were conveyed in his response to a request made by Greenpeace for his legal opinion. Greenpeace has stated in a press release that the government has committed a morally reprehensible act by drafting the legislation.  The Greenpeace campaign against the bill has included an appeal to MPs of both houses of Parliament to fulfill their responsibilities as elected representatives of the Indian people and to reject the legislation.  (7)  To a degree the bill succeeds in being self-deconstructing by dint of glossing over the potential for catastrophic accident and maintaining the pretence that the safety aspects of nuclear production are on par with other categories of industrial production.  Little wonder that journalist and activist Praful Bidwai has described the legislation as an act of folly on the part of the UPA government.  (8) 


Meanwhile half-way across the globe the ferment in India’s Parliament and amid her activists and intelligentsia was being brushed aside by her official spokesperson Indian Foreign Secretary Nirupama Rao who was in the US on a 6 day visit.  In its March 26 issue, India Abroad (the news weekly serving the North America based Indian Diaspora) has reported that the Foreign Secretary shrugged off any concern over the civil nuclear liability bill being deferred in the Indian Parliament.  The report is headlined “Implementation of N-deal proceeding smoothly and satisfactorily.”  The Foreign Secretary made this convenient representation in an interaction with India Abroad.  Apparently the bill’s deferral took place in the wake of a concerted assault by the Opposition.  (Dear me, the Opposition can behave in the most ill-mannered way).  It’s possible that the President of the US India Business Council (USIBC), also quoted in the same report, had a more realistic grasp of the newest obstacle to the implementation of the deal.  US business and industry had lobbied furiously on behalf of the nuclear deal in the corridors of power in Washington DC.  It now appears that august entity was overtaken by angst that came through as well in the President’s remarks.  He said the delay could result in US business losing out to the likes of Russia.


Prime Minister Manmohan Singh and all his men (and women) cannot wish away the Parliamentary basis of Indian democracy.  In the Indian political system the Prime Minister is under no legal obligation to obtain the approval of Parliament for concluding international treaties.  Accordingly back in 2008 Dr. Manmohan Singh took advantage of his Prime Ministerial prerogative to ink the nuclear deal in flagrant disregard of opposition to the agreement from Parliament.  In the case of domestic legislation like the nuclear liability bill, the Prime Minister may not proceed without getting the consent of Parliament.  In 2008 the convening of Parliament’s monsoon session was deferred by two months in order to give the Prime Minister the opportunity to keep his nuclear tryst with President Bush.  This tactic is unavailable at the current juncture which entails keeping another nuclear tryst—this time with President Obama.  In fact India Abroad has been given to understand by reliable sources that both Washington and New Delhi are endeavoring to complete all the technical details and have the nuclear liability bill approved in Parliament when the US President visits India in the summer.  Now if only the worthy Prime Minister could count on the elected representatives of the Indian people to rubber stamp a bill that is intended to bestow a bonanza on the American nuclear industry.  In his incisive analysis of the nuclear liability bill Gopal Krishna, environmental activist and lawyer, has surmised that US nuclear companies might have drafted the bill.  (9)  Apparently these companies had informed the media that they were satisfied with the nature of the bill.  In other words they had seen the bill before it was tabled in Parliament. 


The stakes have been clearly defined by the political controversy surrounding the nuclear liability bill, media reports and analytical commentary.  Business worth billions of dollars and corresponding profits beckon the American nuclear industry as it seeks to enter the lucrative Indian market.  For the purpose of facilitating this entry the rights of possible victims of a nuclear accident have been rendered all but invisible.  This sleight of hand is being defended by Indian political elites and media loyalists in the name of meeting the legitimate expectations of industry and creating a favorable climate for investment.  If, as has been conjectured, the US nuclear industry has in fact authored the nuclear liability bill, it may have overreached by setting unconscionable liability limits and by diverting financial liability in the event of a nuclear accident to the Indian state and the Indian taxpayer.  In the case of the former the implied contempt for the rights of victims of a nuclear accident is too egregious to be overlooked.  In the case of the latter there is patent injustice in shifting the financial burden of paying compensation away from the company that manufactured defective equipment.  In addition, as noted by the Ministry of Finance, the channeling of liability away from foreign business entities raises too many questions about the removal of incentive to observe safety standards in designing and building nuclear equipment.  Still the American nuclear entities might have stood a significant chance of implementing their agenda.  After all major hurdles have been overcome to date with key functionaries in the executive branch of the Indian government acting (for all purposes) on behalf of the USIBC.   However at this stage of the deal’s implementation, the nuclear agreement stakeholders have to grapple with the long shadow cast by the Bhopal gas tragedy.  Twenty five years after the deadly fumes welled out in the dead of night from the pesticide factory, the environs and the groundwater remain contaminated with toxic materials which continue to claim victims.  Despite the waging of a tenacious, high profile national and international campaign to win justice for the Bhopal victims, it has not been possible to bring the perpetrators of the gas leak to book or to enforce corporate responsibility for decontaminating the premises of the former Union Carbide plant.  The grim warning “Don’t repeat Bhopal” recurs many times in the commentary that questions the provisions in the nuclear liability bill.  If nothing else the legacy of the Bhopal gas catastrophe is likely to doom the draft legislation when it comes up for debate in Parliament.


US ambassador to India Timothy Roemer said the passing of the bill would mean a win-win situation for both countries.  Nirupama Roy, Indian Foreign Secretary, has made comments to the same effect.  One is tempted to think that defenders of the nuclear liability bill inhabit an echo chamber.  But this time around it may not be possible to obfuscate salient issues and gain credence for a fiction.  Moral considerations can also be counted on to play a role in the public response to the ongoing confrontation over the bill.  Unquestionably the moral high ground belongs not with those who subscribe to a social philosophy in which the interests of business elites are paramount but with those who insist on the state’s responsibility to protect its citizens against hazards.  Former Attorney General for India, Soli Sorabjee has said that any move for capping nuclear liability will be in defiance of Supreme Court judgments and will be contrary to the interest of people of India and their fundamental rights under Article 21 of the Constitution.  A bill that is unconstitutional and flagrantly opposed to the law of the land—no wonder Prime Minister Manmohan Singh et al tried to rush the nuclear liability bill through the Lok Sabha.  One has to wonder if the USIBC really expected to get away with rewriting Indian law on its own terms.  As political parties opposed to the draft legislation consolidate their strategies, a nightmare looms ahead for those with a vested interest in the implementation of the nuclear deal—namely that the Left Front and the BJP will insist on referring the bill to the scrutiny of an empowered committee or commission. 





Siddharth Varadarajan, “India offers 10,000 MW of nuclear contracts to US”, The Hindu (September 20, 2008) http://www.thehindu.com/2008/09/20/stories/2008092060161200.htm

Siddharth Varadarajan, “Nuclear Bill ignores Ministries’ objections”, The Hindu (March 5, 2010)


“Menon steps in to save N-bill”,  Times of India, March 17, 2010


“Left calls for united stand against nuclear liability Bill”, The Hindu (March 17, 2010)


Brahma Chellaney, “Ignoring the lessons of Bhopal & Chernobyl”, The Hindu (February 16, 2010)


6        http://www.greenpeace.org/india/assets/binaries/soli-sorabjee-opinion-on-nucle

7        http://www.greenpeace.org/india/press/releases/greenpeace-alerts-mps-to-const

8        Praful Bidwai, “The UPA’s second great nuclear folly”


Gopal Krishna, “Nuclear liability bill needs scrutiny”


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