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India and Russia are involved in talks to sort out the nuclear liability issues before they sign an agreement for setting up Units III and IV of the Kudankulam power plant in Tamil Nadu during Prime Minister Manmohan Singh's annual summit with President Putin in Moscow next week.
During two-nation visit beginning Monday which will also take Singh to China, the likelihood of a Border Defence Cooperation Agreement to avoid face-offs between the two armies, especially against the backdrop of the Depsang valley incident this summer.
Incidentally, the cabinet committee on Security at its meeting on Thursday approved the BDCA. "We are trying to do it. We hope we will do (the agreement on) three and four," official sources said on the likelihood of signing an agreement in regard to the two new reactors being set up in the Russian-aided project during Singh's visit.
Seeking to dismiss any major problems on the nuclear liability clause, an issue said to be nagging the Russians, the sources said the public-sector General Insurance Corporation was working on issues relating to insurance and nuclear safety in view of the liability clause.
In view of the fact that a new area was being traversed, India itself was keen to sort out matters because of the nuclear liability act, government is the operator and it has to take a protective insurance cover that will cover the fault of suppliers, whether domestic or foreign, too.
"We have to see things mutually. We have told the Russians that we are the operators and they don't have the liability. The operator has the right of recourse. The liability clause is circumscribed by various conditions," the sources.
Anyway, they said, what the Russians need is a clear sense of what is involved because of the fear that the liability is unlimited, which is not.
The right to recourse of the operator will be in some cases against suppliers, both Indian and foreign. Then comes criminal aspect of any wilful action in creating accidents.
"For the Russians they need to know that there is a system that works," the sources said.
The GIC has a big task on hand because as it would have to engage experts to deal with the safety aspects of nuclear project in tune with the IAEA code. Because they will not know what is the worst case scenario in case of a failure of a bolt or a nut.
Apart from nuclear cooperation, the prime minister's visit is expected to cover the strategic partnership between the countries which is heavily political and military and less of economic.
But on the economic side, for the first time things are changing. Hydro carbons is an area in which the two countries are likely to make some progress. In defence, there has been a deep engagement as India is working with them on production of the fifth generation fighter aircraft and multi-role transport aircraft.
The sources said Russians would be interested to know details of the explosion in the Russian-origin Kilo class submarine that sunk in Mumbai in August.
There is interest in India on the initiatives taken by Russia, of late, in regard to the middle east, especially on Syria and Iran and also Afghanistan.