The Indian government has introduced a controversial bill considered crucial for American companies wanting to build nuclear power plants in India. But there is strong political opposition to a proposed law to limit liability of foreign companies in case of a nuclear accident.  

The two main opposition parties in India staged a noisy walkout Friday after the government introduced the Civil Nuclear Liability Bill in the lower house of parliament.

The proposed legislation will cap the liability of foreign companies building nuclear power plants at about $450 million in the case of an accident. It will also make the Indian state-run operator, and not the foreign supplier, liable for the damages.

The government says the bill will make it easier for foreign companies to invest in India's emerging nuclear power market.  The market opened up in 2008, after three decades of sanctions imposed on New Delhi for conducting nuclear tests were lifted.   

American, Russian and French companies are in a race to invest billions of dollars. But privately owned American companies are at a disadvantage because, unlike state-owned French or Russian companies, their accident liability is not underwritten by the government.

If passed, the bill is expected to level the playing field for American investors. Its introduction in parliament comes a month after the government deferred plans to introduce it amid sharp opposition.  

Yashwant Sinha, a senior leader of the opposition Bharatiya Janata Party, calls the bill unconstitutional.

Sinha says the maximum compensation fixed by the government is about $ 450 million. That is many times lower than the financial liability a company would incur in the United States.      

Opposition parties accuse the government of pandering to the interest of American companies at the cost of ordinary Indians. They say the cap on compensation is too low. They also say the legislation protects foreign nuclear suppliers from cleaning up the environment after a nuclear mishap.

The government says it has been drafted in line with international norms and will open the door to international trade and commerce.  

American officials have called it a win-win for both countries, enabling India to get abundant clean energy, and giving U.S. companies an investment opportunity.

The issue of liability compensation is especially sensitive in India.  In 1984, the country suffered the world's worst industrial disaster when a deadly gas leak in Bhopal at an industrial plant killed 8000 people. The government was accused of accepting a meager compensation of $ 470 million for the victims.

The bill will only be voted on when parliament reconvenes in July.