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Wednesday, March 23, 2016

Implications of US-India nuclear deal

Abdul Matin

INDIA did not sign the Non-Proliferation Treaty (NPT) and exploded its first nuclear weapon in 1974. Consequently, the United States stopped supply of nuclear materials to India in 1978. For thirty years, there was no cooperation between the two countries on uses of atomic energy.    Subsequently, India developed its indigenous nuclear industry.
The US signed a historic deal with India in 2008 to resume supply of nuclear technology and materials. The treaty was inoperative for more than six years for two reasons: (i) insistence of Washington on tracking of nuclear materials and (ii) the supplier's liability in the event of a nuclear accident.
The recent nuclear deal between India and the US removes both the hurdles and paves the way for US suppliers to build nuclear power plants in India. According to the deal, the US will not track nuclear materials in India but the International Atomic Energy Agency (IAEA) will apply safeguards to all of its civilian nuclear installations.
At present, all international conventions make the operators of nuclear power plants liable for damages, regardless of the cause of the accident. The maximum liability of the operator is usually limited to $300 million. The state takes responsibility for damages exceeding this limit. It may be noted that the costs of damages are likely to exceed $100 billion in both the nuclear disasters in Chernobyl and Fukushima.
Failing to get adequate compensation from the plant supplier after the world's worst industrial disaster in Bhopal in 1984, Indian parliament passed the Civil Liability for Nuclear Damages Act, 2010 which makes suppliers of equipment liable for nuclear damages. Russia, which built two nuclear power reactors in Kudankulam in India, agreed to accept the supplier's liability for building two more reactors at the same site.
Under the new deal, the US agreed to provide insurance coverage for nuclear damages to the suppliers of nuclear power plants. Since the US ban, Russia had been the only foreign supplier of nuclear power plants to India. Now, the USA is ready to enter into this lucrative market. France may also follow the suit. The participation of the western suppliers may encourage competition and result in a positive impact on both quality and costs of nuclear power plants in India.

India plans to build 14,600 MWe nuclear capacity by 2020 and aims to increase the share of nuclear electricity from 1.8% to 25% by 2050. India now generates 255,000 MW electricity with coal supplying 60%. This makes India the world's third producer of carbon dioxide, next to China and US. By increasing the share of nuclear electricity, India will reduce the production of carbon dioxide, which is believed to be responsible for global warming and climate changes.

Source: The Daily Star, 29 January 2015