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Although the Nuclear Liability Law passed by Parliament has left the India-United States nuclear agreement in limbo, both countries at the end of their Strategic Dialogue in Washington pointed to the agreement between Westinghouse and the Nuclear Power Corporation of India as a tangible step toward ultimate implementation of the agreement.
India had said that the Nuclear Liability Law is inviolable, much to the angst of US business and industry, which lobbied feverishly for the passage of the deal.
US Secretary of State Hillary Clinton, pointing to the June 12 agreement between Westinghouse and NPCIL to speed up the construction of new power plants in Gujarat and help India meet its energy needs, said the two nations, "Look forward to additional deals involving other leading American companies, including General Electric."
"And we will work together to ensure these projects are implemented to produce real benefits for citizens and businesses alike," she added.
External Affairs Minister S M Krishna, echoing Clinton's remarks, said, "We welcome the tangible progress on similar nuclear energy cooperation, as was mentioned by Secretary Clinton with the signing of the MOU between NPCIL and the Westinghouse."
He argued, "This should put at rest some of the interpretations and some of the confusion that was prevailing after we signed the nuclear accord."
Krishna said, "I'm glad that nuclear commerce is now beginning to expand itself and we hope more Indian and American companies will be involved in the course of the coming months."
Ron Somers, president of the US-India Business Council, told rediff.com that the Early Works Agreement between Westinghouse and NPCIL is an optimistic sign and something "that's exciting."
"That means we are heading in the right track," he said, and added, "We are delighted that the prime minister (Manmohan Singh) has time and again stood by the need to move forward on nuclear power as a major part of the portfolio in India's energy portfolio and the fact that there has been statement after statement about how the Andhra Pradesh site is going to be for General Electric."
Somers said that "the fact that the Early Works Agreement was inked on the day in advance of the Strategic Dialogue bodes very well."
He acknowledged "the liability issue still needs to be addressed. (But) On the other hand, we are patient."
Somers pointed out, "It took 30 plus years to modify the Atomic Energy Act, which we accomplished upon Capitol Hill in 2008. So, we can wait a little bit longer, but we have to address the issue."
"Everybody agrees we want the international best technologies invested in India," he said.
In May, Congressman Steve Chabot, Ohio Republican, chairman of the House Foreign Affairs Subcommittee on South Asia, who convened a hearing on US Foreign Policy Priorities in the subcontinent, said in his opening remarks, "It is no secret to date the US-India civil nuclear agreement hasn't met US commercial expectations due to the Nuclear Liability Law passed by the Indian Parliament, which essentially shuts out US companies."
Assistant Secretary of State for South Asian Affairs Robert Blake, who was among several senior officials who appeared before the subcommittee, agreed with Chabot, saying that "There is more work to be done on both sides to create the level playing field necessary for US companies to fully participate in India's civil nuclear market."
He noted that, "In the interim, we continue to have constructive dialogue with the Indian government on these issues, and we're pleased that US companies are finding ways to move forward now with commercial negotiations."
But Chabot returned to this topic during the interaction that followed the testimony of all the officials and asked Blake why American companies should have any optimism that the nuclear deal will ultimately be implemented.
Blake said that Secretary of State Hillary Clinton, during her recent trip to New Delhi, had "discussed this with senior Indian leaders and she noted that we continue to have a very strong interest in supporting our companies interests in moving ahead, particularly Westinghouse and General Electric."
He told Chabot and the other lawmakers that "she was pleased to hear from India that they have restated their commitment to ensuring a level playing field for our companies and we have had a very strong dialogue on the liability legislation."
"That dialogue has relieved some of our concerns, but not all of our concerns," he added.
Blake acknowledged that "our companies still feel that there are impediments to moving ahead with the current law, so we'll continue to work through that."
"But in the meantime," he explained, "we are focusing on trying to support our companies' efforts to sign early commercial agreements-- things that do not require or don't impede in any way by existing liability legislation."
Blake said these were "things like early engineering and other contracts that would be the kind of precursors to a wider reactor kind of contract. So, there has been progress on that and we hope that we can see some early conclusion on some of these contracts that would be quite important to our companies."