India, the second fastest-growing major economy, may enact a law that will limit the liability of U.S. suppliers in case of a nuclear accident after a new government takes office following general elections.
“The internal processes of India becoming a member of the convention have been completed,” Shyam Saran, special envoy to the prime minister, said in an interview in New Delhi. “Whatever differences had to be resolved have been resolved.”
Suppliers in the US, who helped India win global assent to resume nuclear trade, are disadvantaged in competing for orders from India because they don’t have insurance cover for nuclear accidents. General Electric Co., the world’s biggest maker of power-generation equipment, has been pushing for ratification of the treaty restricting liability.
The proposal needs the approval of India’s cabinet before parliament enacts it into law. The process will move forward after a new government takes over, Saran said.
The South Asian nation will sign the liability treaty after lawmakers approve the legislation.
India aims to add 60,000 megawatts of nuclear capacity by 2030 to add electricity generating capacity and help cut peak power shortages that narrowed to 13.8 percent in the 11 months ended Feb. 28, from 16.6 percent a year earlier, according to the Central Electricity Authority.
Saran also said that India seeks 10,000 megawatts of nuclear power reactors from US companies that may translate into $150 billion worth of projects.
The world’s biggest nuclear reactor builder, Paris-based Areva SA and Russia’s Rosatom Corp. have an edge over US suppliers in competing for orders from India. They have sovereign immunity because they are fully or partially controlled by governments. India signed atomic energy accords with the US, Russia and France after a three-decade ban on nuclear trade with the South Asian nation was lifted in September.
The liability treaty, known as the Convention on Supplementary Compensation for Nuclear Damage, makes plant operators responsible for damages from any accidents and shields suppliers from liability. Operators must set aside about $450 million for compensation in case of damage and governments that sign the treaty would cover additional claims.
The US, Argentina, Morocco and Romania were the only four nations to have ratified the treaty, according to the International Atomic Energy Agency. At least one other country, such as Japan, that meets a required minimum of nuclear power output must ratify the treaty for it to go into effect.
India doesn’t have sufficient current generation capacity to reach the threshold to enforce the accord.