India's lower house of parliament has passed a controversial bill which will pave the way for foreign companies to build nuclear power plants in India. The legislation is crucial for American companies wanting to engage in civil nuclear commerce in India.
The lower house of parliament passed the Civil Nuclear Liability Bill Wednesday after the government made several changes to win the support of the main opposition Bharatiya Janata Party.
The amended bill triples the cap on compensation in the event of a nuclear accident to $322 million. It also extends provisions for liability claims to suppliers of nuclear reactors.
The bill had been stalled for months by opposition parties and critics who demanded stricter liability for companies selling nuclear reactors if a mishap occurred.
India's civil nuclear market opened up in 2008, when a landmark atomic energy pact with the United States led to the lifting of sanctions imposed for conducting nuclear tests.
Prime Minister Singh says the bill is the last step in ending the country's nuclear isolation.
"I wish to state categorically that this bill completes in a way our journey to end the nuclear apartheid which the world had imposed on India," said Mr. Singh.
The government says the legislation will help attract foreign investors in its emerging nuclear power market.
The bill is particularly important for American companies wanting to build nuclear power plants in India. Unlike state-owned French and Russian companies, their liabilities are not underwritten by the government, making them hesitant to invest unless they are clearly spelled out. French and Russian companies have already signed several deals to build nuclear power plants.
The government has faced accusations that the bill is meant to facilitate the entry of American companies in India.
Prime Minister Manmohan Singh strongly denied such criticism.
"To say this has been done to promote American interests, to help American corporations I think is far from being the truth," he said.
The bill will now have to be passed by the Upper House of parliament.
The opposition Bharatiya Janata Party and several commentators say the government wants to pass the bill before an expected visit by U.S. President Barack Obama to India in November.
Industry lobbies have raised concerns over the stricter liability clauses in the bill, saying these could keep away foreign and domestic suppliers of nuclear reactors.