Treated as a new dimension of the nuclear non-proliferation dynamics and efforts on an international scale, the Indo-US Nuclear deal is often seen as a landmark watershed agreement between India and USA. This deal is unique in the sense that it allowed a country which is not a signatory to the nuclear non-proliferation treaty to participate in nuclear trade with the Nuclear suppliers group members in nuclear technologies with peaceful uses. The incessant work done by Manmohan singh led government in the track I diplomacy and the backdoor persuasion by the Indian lobby in the US under Mr. Sant Singh Chatwal in the track II diplomacy helped in cementing the deal.

This deal involved passing of the Hyde Act 2006 involving amending the Atomic energy Act 1954, a US domestic law guiding the trade in peaceful nuclear technologies under the terms and conditions pre-set by the International atomic energy agency (IAEA). Indian parliament saw a daring move in 2008 by the then UPA government to make sure that the Indo US nuclear deal gets legitimate recognition in international community. After the left parties withdrew their support to the government the UPA regime went for a floor test to prove majority in order to send out a loud and clear message to the observers around the world that the nuclear deal had the sanction of the parliament. This floor test saw the BJP and the Left parties on the same side in a rare moment in Indian political history despite all their notional and rhetorical differences with each other on almost every issue. Both of the groups of parties were possibly well aware that the deal could lower their probabilities to make gains in the 2009 polls. UPA won the floor test and Dr. Manmohan Singh was hailed as the “Singh is King” by leading national dailies.

The creation of the NPT regime and the Nuclear suppliers group was specifically in response to the Indian nuclear test in 1974- operation Smiling Buddha. Gradually the observers in the western political and intellectual circles observed that the restrictions imposed on India through sanctions did little to slow down the military as well civilian development of nuclear technologies. It was also observed that India had an impeccable record in terms of nuclear non-proliferation reinforcing the Indian argument that the NPT created a barrier wall between the “nuclear haves and have nots” of the global community.

It was noticed and underscored that the Indian reserves of Uranium accounts for almost 1% of the global reserves and that the amount of the fissile materials needed for domestic power generation would be much larger than needed to augment the nuclear arsenal. The Indian demand of electricity kept on growing. It is reflected in the observed fact that the per capita consumption of electricity in India jumped from around 74 kWh in 1966 to around 465 kWh in 1997 and to 1010 kWh in 2015.

Apart from this India has been a large growing market for the MNCs based in the advanced economies. This along with the track I and track II diplomatic efforts forced the US administration to change its outlook towards the Indian nuclear agenda. It was the moment of genesis for the Indo-US Nuclear deal which completed the upgradation process for NSSP- Next steps in strategic partnerships between India and USA.

The deal has helped India to separate its Civilian and military nuclear facilities and placing the civilian nuclear reactors under the watch of IAEA.

If the deal is read in entirety it would be reflected that it is in fact a quid pro quo between India and IAEA. While the deal allows India to participate in Nuclear trade with peaceful end purposes with the member states of the Nuclear supplier groups, it also states that India would be placing its complete civilian nuclear architecture under the radar of the IAEA. So essentially, it means that a non-recognised nuclear power state, by placing its entire civilian nuclear setup under international monitoring regime had gained access to peaceful nuclear trade.

This was the major catch point of the negotiations put forth by the then UPA regime under the illustrious Dr. MM Singh. After signing of the deal, India got to set up nuclear trade deals with countries like France, Australia, Kazakhkstan, Canada, Russia, Argentina, Japan, UK and others. This deal allowed India to import Uranium from the countries like France, Kazakhstan, Russia, Canada and Australia. As per the questions answered by the government in the parliament, India has imported around 7842 metric tonnes of nuclear fuel from FY 2008-09 to FY 2017-18.

The Indo-US Nuclear deal created a huge furore in the media houses of Pakistan and China, who have military nuclear transactions with one another and with states like North korea. It irked them that despite having carrying out nuclear tests twice, India came closer to the export control cartel of NSG in an official way. Both of the countries put forth arguments that it would destabilise the balance of power in an already tense south Asia.

On the commercial angle of this nuclear story, many companies in USA like Westinghouse and GE, and Japan like Toshiba and Hitachi became interested in investing in Indian nuclear energy sector. But the Civil Nuclear liability act of 2010 became a block in the path of their wholehearted investment and participation in Indian energy sector. It was argued that the Nuclear liability law of 2010 in India does not follow the requirement set by the international legislation- the Convention on Supplementary compensation which was adopted in the 41st general conference of the IAEA held at Vienna in September 1997.

The main issue of consternation of the foreign commercial players in the field of nuclear energy was that the liability allows the nuclear power operator in India i.e. the Nuclear power corporation of India limited, to shift the entire liability to the suppliers to the suppliers of the nuclear reactors under section 17(b) of the nuclear liability act of 2010.

India has responded to this dilemma with setting up a nuclear insurance pool-INIP with a total cap of Rs 1500 crores issued by the general insurer -New India assurance and managed by the reinsurer- General Insurance corporation. But this has not been treated as enough by the parties willing to invest in India in the Nuclear energy field. It is a matter of what can be achieved as the best middle ground for both India and the foreign companies. For India, the Bhopal gas tragedy is still fresh in the national memory as an industrial disaster along with the recent case of the flooding of the Fukushima diechi nuclear reactor in Japan in the 2011 tsunami. For the foreign parties, the point of concern is the unlimited liability which the liability law channels towards the supplier of the technology.

As an outcome of the Indo-US nuclear deal also known as the 123 deal, India had recently placed 4 more of its nuclear reactors under the watch list of the IAEA taking the total number of reactors to 26 under the international monitoring. If India can go the extra mile in bringing confidence to the international community, it becomes the onus of the countries willing to invest in Indian energy space to take a leap and trust in the Indian nuclear architecture and bring in their technical expertise.

Only with a large country like India, the world can hope to make a fast transition to clean energy if the nuclear liability issue is sorted out in the domestic legislation and the benefits of the Indo-US nuclear deal are tapped properly.