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There is growing concern in the American business and industry circles that despite their feverish lobbying to see the US-India civilian nuclear deal through, they may lose out to the French and the Russians -- who have already been provided sites by India -- while Americans firms wait for India to sign on to the International Convention on Civil Nuclear Liability, which these companies say is vital for them to protect their investments.
Ron Somers, president of the US-India Business Council, who stresses on the success of the USIBC in pushing through the deal also emphasises the need for India to expeditiously ratify this international convention.
What worries them, industry sources told rediff.com, is that now from all indications, India is unlikely to sign on to the Convention -- if at all -- till after the elections. Not knowing what the new dispensation's view may be at the time is what is worrying them -- not the least because the BJP has declared its intent to review the agreement and Prakash Karat of the new Third Front has promised to also take a second look at the deal.
Foreign Secretary Shiv Shankar Menon, who visited Washington last week, sought to allay these concerns, saying that India would join the convention soon and the government was determined to go through with and was putting in place the legal arguments for it, but former US Ambassador to India David Mulford has spoken about how the Indian government had made known to him that it did not intend to sign on to the convention till after the elections.
This view was also echoed by another former US Ambassador to India, Frank Wisner, now the government of India's top lobbyist as international affairs adviser to the top-notch lobbying firm of Patton Boggs who said it would be wishful thinking to expect India to sign the convention before the election.
India has also been a party for the negotiations of the International Convention on Civil Nuclear Liability, which lays down the standards for liability in civil nuclear cases.
It has still not come into force and is just a few votes shy for ratification and India's joining would be a shot in the arm for its entry into force and also most re-assuring to US companies that remain fearful to the massive liabilities that could be incurred if it did not have the protection of this convention.
Menon said that "we are now in the domestic legal process of getting the approvals that we need to sign it," and pointed out that "the Atomic Energy Commission actually has already approved our signing the Convention."
"Once we sign it, there are then some sequent steps, which signatories have to do. You have to pass domestic legislation to give it effect -- it's not enough just to sign it. You have to then make it effective in your jurisdiction -- each state -- and we then do that."
Menon said it was therefore a step by step legal process "and we are in the midst of that process," and he asserted that "it will happen."
"And, quite frankly, it begins to operate, when there are reactors operating -- and that's not something that happens tomorrow. There is time for this to take place, but we are determined to do it. We will do it," he said.
"And, once we apply the international standard, that should be enough assurance to anybody who is considering entering the market in India, that the same standard will apply -- that there's a level playing field and it's the same standard as anywhere in the world."
However, while industry sources said they were assured by Menon's remarks, they kept pointing to the timing, arguing that if it's not done soon, in the election aftermath, this may fall by the wayside.
India could, meanwhile, go ahead and make deals with the French and the Russians, while the Americans, fearful of entering the market because of India not being a signatory to the Convention, will find themselves losing out on a major chunk of what is expected to be a nearly $80-100 billion market.
Mulford, just days after he exited his post, said that "the nuclear deal may be completed, but the work isn't done. There is unfinished business there to be done," and if the US-India relationship is to move further ahead, asserted that "this is going to be an issue of prime importance."
He said, "We have to be absolutely sure that whatever the loose ends are, whatever housekeeping items are still out there, need to be completed, because if they are not, then one might fall into a very sort of a uncomfortable situation."
Mulford said that since sites have already been given to the French and the Russians, "there's a certain restlessness in US industry as you may expect."
He also said that "there is a need to address the so-called liability issue. India has indicated it will do that, but it has also indicated that it will not do it until after the election."
Mulford predicted, "That is likely to be a quite sensitive process -- it may in fact result in legislated being needed in something of a re-debate of the issues of 2008," and hoped it wouldn't come to that. "But they do have to work that through their system and it is something that in the long-run US companies will need before they can compete effectively on that field."