New Delhi:
The government has said that it will not violate or subvert a crucial law that makes foreign suppliers liable for an accident if the nuclear equipment they provided malfunctioned.
The US has been pressuring India to grants its companies greater protection from liabilities. US President Barack Obama is expected to raise this at next week's meeting with the Prime Minister in New York.
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The law will not be diluted, but the current rules already provide for a limited liability for foreign suppliers, said V Narayansamy, Minister of State in the Prime Minister's Office, to NDTV.
He said that the government has not accepted the opinion of Attorney General GE Vahanvati, who said that it is upto a nuclear plant operator to decide whether to include or enforce liability in its contract with a foreign supplier.
The government is under huge pressure from the US to strike deals with American reactor builders like GE and Westinghouse, who see India's market for nuclear equipment as worth $175 billion.
US firm Westinghouse signed a contract last year to supply reactors for a nuclear plant in Gujarat. But the US wants what it describes as stringent liability laws to be softened.
The Indo-US nuclear agreement was signed in 2008. It reversed a 34-year-old US ban on supplying nuclear fuel and technology to India, which is keen to attract foreign investment.
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 have challenged this in the Supreme Court. They 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.
The state-run Nuclear Power Corporation of India operates all the nuclear plants in India and is allowed to seek compensation from nuclear suppliers in case of an accident due to faulty equipment.
If a foreign supplier's liability is limited, the Indian tax payer will have to pay in case of a nuclear accident like Fukushima in Japan, Russia's Chernobyl disaster or the Three-Mile Island accident in the US.
The government has already been accused of bending over backwards to accommodate foreign investors, as a result of the circumstances of the Indo-U.S. nuclear deal. Even the Indo-U.S. nuclear deal was cleared through Parliament narrowly in 2008, with Dr Singh's government almost falling in a confidence vote over the issue.
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