Defense analyst Captain (Retired) Bharat Verma on Thursday said the Centre has no choice but to negotiate a mutually profitable nuclear deal with the United States, as the government does not have a majority in Parliament to undo the Nuclear Liability Bill (NLB).
"Since there is a fractured polity in the parliament, where the government does not hold any kind of majority, that clause cannot be undone. Therefore, a via-media must be found-how it has to be done, the government will have to negotiate," Verma said.
Criticizing the creation of the Bill, Verma said the Nuclear deal with the United States of America should have been treated in a way that business is internationally done, rather than call for a clause which would increase prices for the end consumer.
"The first problem in the Indo-U.S. Nuclear deal or the nuclear deal we have had worldwide, is that there is a clause which has been put by the parliament. ... What is happening because of this clause is that United States is supplying reactors at one hell of a cost for the simple reason that insurance and other costs are going up because of this liability clause. So, the end consumer is going to get extremely expensive per unit electricity," Verma said.
"It, then, defeats the very purpose of having these reactors. So, we have to create a balance between the norms internationally in trading and business that is normally done. I think by putting this clause we have gone slightly wrong. So, we have to find a via-media," he added.
Verma also suggested a partnership between the United States and India in the initial stages so that both sides are assured of the long-term quality of the nuclear equipment, and said that it would benefit the Indian business market in the long run.
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"There has to be a partnership in the initial stage where you check the equipment thoroughly when you buy, you are sure of the quality," he said.
"Also, keep the international norms of business in practice because that facilitates larger business practices for the future, attracts FDI, helps you to attract more businesses from abroad and (helps to) create a manufacturing base in India," he added.
Saying that there was an American-based lobby for the deal between the two countries, Verma insisted that the United States was putting pressure on India to dilute its clause, which the government couldn't do as it does not have a stable majority in Parliament.
Contrary to this, earlier today, External Affairs Minister Salman Khurshid denied that the government was put under 'intense pressure' and assured that the Centre would work with careful consideration to benefit the Indian consumers.
"Please be assured that whatever we do and whatever we have done has been through the utmost care and consideration for the consumers in our country and the people of our country," Khurshid said.
"For anyone to think that India would, in any way, not be vigilant, careful and committed as far as our interests are concerned-the interests of the Indian consumer is concerned and (as far as) the Indian industry is concerned-is completely misplaced," he said.
" I am not prepared to say that there is intense pressure. When you negotiate, there is a meeting of minds or an attempt of meeting of minds, (where) you put your point across vigorously, and the other side puts their point across vigorously," he added.
According to reports, a Cabinet Committee on Security (CCS) note suggests that prior to his visit to the United States to attend this year's U.N. General Assembly session and to meet President Barack Obama on its sidelines, Prime Minister Manmohan Singh appears to be keen to have a diluted version of the NLB signed.
The diluted NLB reportedly overlooks several key factors, including security concerns. According to a television channel, the CCS note details plans to bypass the Atomic Energy Commission (AEC), a move that has raised questions.
Another channel said that the UPA Government has sought the opinion of Attorney General G E Vahanvati on the extent of the suppliers' liability.
Reports say that the government is keen on attracting huge foreign investment through nuclear commerce, and is therefore, under huge pressure from the United States to strike deals with American reactor builders like GE and Westinghouse, who see India's market for nuclear equipment as worth 175 billion dollars.
To facilitate this, the Indo-U.S. nuclear agreement was signed in 2008. It reversed a 34-year-old U.S. ban on supplying nuclear fuel and technology to India.
In 2010, Parliament passed the Civil Liability for Nuclear Damage Act, which creates a liability cap for nuclear plant operators for economic damage in the event of an accident.
It also leaves nuclear suppliers free of most liability.
Critics and activists say that nuclear operators and suppliers should be jointly and absolutely liable for civil damages in the event of an accident, and that their financial liability must be unlimited.
Potential nuclear equipment suppliers, including the United States, say India's nuclear liability law is too stringent.
They have particularly objected to clauses allowing the state-run Nuclear Power Corporation of India, which operates all the nuclear plants in India, to seek compensation from nuclear suppliers in case of an accident due to faulty equipment.