When India and the US concluded the nuclear deal, to operationalise it, India had to ratify the convention a supplementary compensation on nuclear damages and also prepare a nuclear liability law. Subsequently, India prepared the Civil Liability of Nuclear Damages Act (INDIA) in 2010.
The aim of the CLAN is o ensure that in case of a nuclear accident, the victim get quick compensation without having to prove negligence by operator or supplier. The liability was capped at 1,500 crore rupees. However, there are two issues raised by equipment suppliers in INDIA. The first issue of CLNDA is Section 17B, which states that in India, the plant operator in India, that is NPCIL, under Section 17B, can claim compensation from the supplier of equipment if it claims that the nuclear accident that happened was due to faulty equipments or material supplied by the supplier.
The second issue is related to Section 46. As per this section, the accident victims can sue both operator and material supplier over and above the amount capped. Now equipment suppliers, which are foreign players, say that these clauses (Section 17B and Section 46) put the supplier in a vulnerable situation and unnecessarily drag them into open-ended criminal action and tort law compensation. The suppliers say that the operator and not the supplier has to identify defects and get them rectified and in case of the failure of the operator to do so, the operator is to be held liable. The suppliers also say that India's CLNDA violates the Paris Convention of 1960 and the Vienna Convention of 1963 as well as the Convention on Supplementary Compensation for Nuclear Damages (CSC).
The government has tried to give some assurance to the suppliers by saying that as per Section 7 of CLNDA, if the liability exceeds 1,500 crore cap, the central government will establish a nuclear liability fund to protect the suppliers from any claims made by the operator, However, suppliers have pointed out that Section 7 of the CLNDA still does not protect a supplier from claims made by accident victims under the law of torts. In 2015, the US president Obama visited India. During the visit, the two sides finalised administrative arrangements to execute the nuclear deal. This was built upon the India PM's visit to the US in 2014 when a contact group to implement the deal had been established.
After the successful completion of negotiation in the contact group, India agreed to establish a nuclear insurance pool formed by General Insurance Corporation of India (GIC) and 4 different PSUs, which will contribute 750 crores out of a total of 1,500 crores, while the government will contribute the rest of the amount. The insurance pool will provide cover to suppliers under Section 17 of the INDIA. Now under the pool the operator and suppliers will become partners in risk management rather than eyeing each other as adversaries. The compensation amount is three hundred million in special drawing rights (SDR) and INDIA has capped maximum liability for an operator to 1,500 crore rupees. In case if value of SDR increases and goes beyond 1,500 crores, the government would bridge the amount.
On 12 June 2015, the General Insurance Company of India has launched the Indian Nuclear Insurance Pool with a capacity of 1,500 crores as envisaged under CLNDA.
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