"It is possibly the only nuclear market where vendors will not be asked to compete against each other to provide the lowest bid," Vijay Sazawal, a member of the U.S Civil Nuclear Trade Advisory Committee, told Press Trust of India.
Noting that India's interest in purchasing U.S.-made reactors is genuine, Sazawal said the U.S. government is doing its best to work out administrative and legislative hurdles to help U.S. companies succeed in the Indian market.
Under Indian law, foreign nuclear energy product suppliers are financially liable for accidents at sites that employ those firms' technology. In most countries only the operator of the facility is liable.
"Indians can be reasonable in settling bilateral disputes and issues of contention. But the process may involve a higher degree of flexibility and ingenuity than what a vendor has experienced elsewhere," Sazawal acknowledged.
India has 20 operational nuclear reactors in six nuclear power plants with a capacity of 4.4 gigawatts, generating less than 3 percent of the country's total electricity.
It also has the third largest number of reactors under construction in the world. Seven reactors, totaling 5.3 gigawatts are under construction and are expected to be online by 2016.
The government aims to increase total nuclear capacity to 35 gigawatts by 2020.
State-run Nuclear Power Corporation of India Ltd. is building nuclear power plants with Russian cooperation at Kudankulam. It is also involved in discussions with France and the U.S. regarding setting up atomic power plants at Jaitapur and Chhayamithi Virdi in the states of Maharashtra and Gujarat in the west as well as at Kovvada in Andhra Pradesh state in the south.
Sazawal said the United States could play a major role in the development of nuclear power in India.
He recommended U.S. companies invest in local Indian businesses and learn from local entrepreneurs "who deal with India's cumbersome bureaucracy and legal system, and still make good money along the way."
But Geoffrey Pyatt, principal deputy assistant secretary of state for South and Central Asian Affairs, speaking at a nuclear expert controls seminar last November, said India's nuclear liability law "is not in line with the international nuclear liability principles reflected in the Convention on Supplementary Compensation for Nuclear Damage."
The law imposes "the risk of a heavy financial burden on equipment suppliers seeking to enter the Indian market," exposing the companies to the risk of "significant" financial penalty should a nuclear accident occur, Pyatt said.