US firms reluctant to engage in N-trade with India

Washington: American firms, which played a key role in the passage of Indo-US civilian nuclear deal, are unlikely to engage in atomic trade with India if New Delhi does not become party to the Convention on Supplementary Compensation for Nuclear Damage, which has not yet entered into force, a Congressional report has said.

"US companies have not yet started nuclear trade with India. New Delhi had reportedly insisted that India and the United States conclude an agreement on a reprocessing facility in India before New Delhi would sign contracts with US nuclear firms. However, the countries announced March 29 that they had concluded the agreement," said a latest report on the civil nuclear deal released by Congressional Research Service.

"The Administration must submit the subsequent arrangement to Congress, but has not yet done so. The proposed arrangement shall not take effect if Congress adopts a joint resolution of disapproval," said the CRS report 'US Nuclear Cooperation with India: Issues for Congress'.

CRS is the independent research wing of the US Congress.

"It is worth noting that US firms will likely be very reluctant to engage in nuclear trade with India if the government does not become party to the Convention on Supplementary Compensation for Nuclear Damage, which has not yet entered into force," said the 47-page report, dated April 8, a copy of which has been obtained by PTI.

The civil-nuclear bill requires that, before the Nuclear Regulatory Commission can issue licenses for US nuclear exports to India, the President must determine and certify to Congress that New Delhi's IAEA safeguards agreement has entered into force and that India's declaration of its nuclear facilities to the agency "is not materially inconsistent with the facilities and schedule" described in a separation plan that New Delhi has provided to Washington.

India's safeguards agreement entered into force May 11, 2009, and New Delhi has filed the declaration with the IAEA.

Obama submitted the required certification to Congress on February 3, 2010, determining that India has satisfied the legal requirement described above.
"Nevertheless, US firms will likely be very reluctant to engage in nuclear trade with India if the government does not become party to the Convention on Supplementary Compensation for Nuclear Damage (CSC), which has not yet entered into force," it said.

In a letter, the then Foreign Secretary Shivshankar Menon in September 2008, said: "It is the intention of the Indian Government to take all steps necessary to adhere to the Convention on Supplementary Compensation for Nuclear Damage prior to the commencement of international civil nuclear cooperation under" the US-India agreement.