Russia – India nuclear energy cooperation
Presently, Russia is India’s top most partner in nuclear cooperation,

August 2010 update

India committed to consolidate strategic partnership with Russia
August 5, 2010

Shri Anand Sharma, Commerce and Industry Minister, during his meeting with the Russian Prime Minister Vladmir Putin, in Moscow today, reaffirmed India’s abiding commitment to nurture and consolidate the strategic partnership with Russia. In his meeting with Prime Minister Putin, the Minister held discussions on a wide range of bilateral issues including on means to diversify and deepen the economic engagement with Russia.

Shri Sharma also held bilateral meetings with Minister for Economic development, and launched the third India-Russia Forum on trade and investment. The forum was also addressed by the Deputy Prime Minister of Russia and attended by over 300 delegates from Indian and Russian industry. During the delegation level talks with his counterpart, Shri Sharma impressed upon the need to diversify bilateral trade and move away from just commodity trading to high-level investments in identified sectors. The priority sectors that were mutually identified include Pharmaceuticals, Energy (inc. nuclear), IT, High technology cooperation, agro processing and gems and jewelry. The two ministers agreed that the bilateral trade between the two countries needs to have an ambitious agenda, given the strategic nature of bilateral engagement and set a target of $15 billion by 2012.

The Minister also held bilateral talks with the Minister of Industry and Trade of Russia. Both the ministers agreed to intensify cooperation in defence and high technology sectors and to move towards an engagement based on partnership.

India-Russia nuclear talks hit liability snag
July 30, 2010

Russia too is now insisting that all liability for any accident that may occur in reactors sold to India must rest solely with the Indian operator and not with Russian companies involved in supplying components and knowhow.

At the last round of commercial negotiations held in Moscow recently between the Nuclear Power Corporation of India Ltd (NPCIL) and Atomstroyexport for the supply of four additional 1000 MWe reactors at Kudankulam, the two countries failed to agree on the issue of liability. The Indian side wanted the contract to include a ‘right of recourse' which would allow NPCIL to claim damages from Atomstroyexport in the event of an accident resulting from negligence on the part of the Russian supplier. But Russian officials refused, citing the Inter-Governmental Agreement the two countries signed in 2008 to back up their stand that all liability must be channelled on to NPCIL.

Indeed, the IGA is clear on this point; article 13 states: “The Indian Side and its authorised organisation at any time and at all stages of the construction and operation of the NPP power units to be constructed under the present Agreement shall be the Operator of power units of the NPP at the Kudankulam Site and be fully responsible for any damage both within and outside the territory of the Republic of India caused to any person and property as a result of a nuclear incident occurring at the NPP.”

Indian officials acknowledge the lacuna but put it down to India's weak negotiating hand in the days before the Nuclear Suppliers Group voted to lift its export ban on the country in September 2008. The language on liability was copied verbatim from the agreement for the first two Kudankulam reactors, though India — which is in the market for a mammoth 20,000 MWe of imported reactor capacity — is likely to drive a harder bargain in future negotiations with Russia.

Nevertheless, the current stand-off is likely to further complicate the Manmohan Singh government's efforts to pass a nuclear liability law that is acceptable to all domestic stakeholders and foreign partners.

The draft law includes three grounds for the Indian nuclear operator to invoke a right of recourse against its foreign suppliers. India is under pressure from the U.S. to dilute one of those provisions — which allows for claims in the event of negligence.

Though Russia is refusing to include a right of recourse for the Kudankulam reactors, the 1963 Vienna Convention on Civil Liability for Nuclear Damage — which the Russian Federation acceded to in 2005 — allows for such a right if expressly provided for by a contract in writing.

India, Russia to iron out nuclear issues

July 30, 2010

India and Russia will try to iron out differences over liability issues in their civil nuclear cooperation when Foreign Secretary Nirupama Rao holds talks with senior Russian officials in Moscow.

The differences over the issue of liability cropped up at the last round of commercial negotiations between the Nuclear Power Corporation of India Ltd and Atomstroyexport for the supply of four additional 1,000 MW reactors at Kudankulam. Russia refused an Indian proposal to include a 'right of recourse' in the contract which would allow NPCIL, the operator of the nuclear plant, to claim damages from Atomstroyexport in case of an accident due negligence on the part of the Russian supplier.

The Manmohan Singh government is having a tough time getting parliament to endorse a civil nuclear liability legislation, which pegs Rs.500 crore (approx $110 million) liability to be paid by the operator of the nuclear power plant in case of an atomic accident. The proposed bill is decried by leading opposition parties in India who contend that the compensation amount is too low and argue that it virtually exempts foreign nuclear suppliers from any liability in case of an accident.