U.S. official says India has addressed nuclear concerns

By Patricia Zengerle

WASHINGTON (Reuters) - A U.S. State Department official assured lawmakers on Tuesday that India has addressed concerns over liability that had for years kept U.S. corporations from signing nuclear power contracts in the country.

"We believe that the steps that India has taken have addressed by and large the key concerns that have been in place," Assistant Secretary of State for South and Central Asian Affairs Nisha Desai Biswal told the Senate Foreign Relations Committee.

She also said the United States supported India joining the Nuclear Suppliers Group, a 48-member group of nuclear trading nations.

India wants to increase its nuclear energy capacity dramatically as part of a broader push to move away from fossil fuels, cut greenhouse gas emissions and avoid the dangerous effects of climate change.

India was shut out of the nuclear trade for decades because of its weapons program. A 2008 agreement with the United States gave it access to foreign suppliers without giving up arms primarily meant as a deterrent against nuclear-armed China.

But hopes that U.S. nuclear reactor manufacturers would get billions of dollars of new business evaporated after India adopted a law in 2010 giving the state-run Nuclear Power Corp of India Ltd (NPCIL) the right to seek damages from suppliers in the event of an accident.

Biswal declined to say that all U.S. companies would now be comfortable doing business in India. "Those are going to be individual determinations that companies are going to have to make," she said.

Some companies are moving into the market. The chief executive of Toshiba Corp's Westinghouse Electric said in March he expected to sign a deal in June to build six nuclear reactors in India.

Senator Edward Markey questioned Biswal on whether India had met the requirements to join the Nuclear Suppliers Group, which is dedicated to curbing nuclear arms proliferation by controlling the export and re-transfer of materials that could foster nuclear weapons development.

Diplomats quietly launched a new push last year to induct India into the group, which would carry the risk of antagonizing Pakistan as well as its ally, China. Beijing could veto any application by India.

Biswal said the United States backs India.

"We believe that India has complied with, and is consistent with, the requirements of the NSG and therefore should be considered for membership," she said.

(Additional reporting by David Brunnstrom; Editing by Dan Grebler)