Washington: Suggesting that the Indian Parliament had passed a flawed civil nuclear liability law, a US South Asia expert has warned that it could cast a pall over the historic Indo-US civil nuclear deal.
An internationally compliant civil nuclear liability regime that would facilitate US investment in India`s nuclear industry would have been the last step in completing the nuclear deal, noted Lisa Curtis, Senior Research Fellow for South Asia at The Heritage Foundation, a Washington think tank.
US policymakers and industrial leaders were taken off guard over the passage of the legislation "despite retaining language inconsistent with international standards for engaging in nuclear commerce," she wrote in a commentary.
The law includes language that makes suppliers of equipment, raw materials, and services liable - beyond the recourse already available through the courts - for 80 years after the construction of a plant in the unlikely event of a nuclear accident.
Noting that Indian business groups have denounced the legislation, Curtis said: "This latest obstacle in the US-India nuclear deal is unfortunate, as it follows the successful completion of a US-India nuclear reprocessing agreement earlier this year, which granted India the right to reprocess spent nuclear fuel."
"This liability law also follows a dust-up between the US and India over flawed US legislation passed in the US Congress a few weeks ago that directly targets Indian companies that bring highly skilled workers into the US," she noted.
But "there is still an opportunity to find solutions to these issues before President (Barack) Obama visits India in November, but both sides will have to step up their engagement and find common ground on issues of mutual interest," Curtis said.
"Domestic politics can impact foreign policy in any genuine democracy," she said. But "Washington and New Delhi need to move past the recent irritants in the relationship caused by domestic politics in both countries so that this important bilateral partnership will continue to advance."
There is no official US reaction to the legislation yet, but US India Business Council, representing 300 top US companies doing business with India, has also asked India to adopt a nuclear liability regime compliant with the International Atomic Energy Agency`s Convention on Supplementary Compensation (CSC).