Sources say that India is considering a nuclear liability fund to cover major accidents.

Two government sources have confirmed that India is planning to create a nuclear liability funds to cover accident payments in excess of 15 billion rupies ($169 million), owed by plant owners. This will ease concerns about risk sharing among global suppliers and companies.

Sources with direct knowledge of the issue said that the move could unlock foreign and private investment in India's nuclear industry by aligning India’s compensation framework to global standards.

Sources who requested anonymity as the plan is yet to be released said that the statutory fund proposed by the new atomic bill would supplement the operator's cap on liability.

One of the sources said that the fund aims to improve the government's capacity to compensate accident victims.

The Indian atomic energy department and finance ministry have not responded to comment requests.

India is relaxing its rules in order to remove a state monopoly that has existed for decades and to ease the liability provisions. This will allow private investment and help attract foreign technology suppliers.

Several of South Asia's biggest conglomerates have started preparing investment plans, including Tata Power, Adani Power, and Reliance Industries.

Sources said that the government of Prime Minister Narendra Modi is in the final stages in drafting legislation, which will be introduced during the winter session of the parliament in December.

The aim is to attract private companies in the fields of uranium and nuclear energy production, while foreign investors will take minority stakes.

The government also wants to relax the nuclear liability laws, by removing a provision that exposes suppliers to unlimited liability in case of accidents. The fund planned would be a legal mechanism that could finance compensation above the operator's limit.

India relies now on a nuclear pool for insurance coverage against accidents. This policy tool was launched in 2015, but is not yet embedded in law.

Although designed to support operator- and supplier-liability under legislation dating back to 2010, it failed in its attempt to overcome the caution expressed by foreign firms such as those from France and the United States.

The new bill, if passed, will replace both the Atomic Energy Act of 1964 and the Civil Liability for Nuclear Damage Act of 2010 $1 = 88.7280 Rupees (Reporting and editing by Clarence Fernandez; Sarita Chaganti, Editor)

(source: Reuters)