US-India atomic deal - Land scarcity causes worry

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US nuclear firms said on Monday they were worried land scarcity in India could further delay a joint atomic deal already hobbled by policy holdups over issues such as accident liability protection.

A 50-member US business delegation this week is seeking to push the implementation of the deal, which promises to open up India's multi-billion-dollar nuclear market to American firms.

US firms already worry over delays such as writing a new Indian law to limit US firms' liability in case of an industrial accident and differences over a fuel reprocessing pact. Recent protests over land acquisition for building reactors has added to their uncertainty.

India and the United States signed a civilian nuclear deal last year, ending India's nuclear isolation since it tested a nuclear device in 1974 and opening up its atomic market for firms such as General Electric Co and Westinghouse Electric Co, a subsidiary of Japan's Toshiba Corp.

But with delays in implementation of the deal, U.S. firms have lagged in a competitive scramble with Russian and French firms whose governments guarantee their liability in case of an industrial accident.

"Yes, we realise land acquisition is a problem here," Timothy Richards, head of international energy policy at General Electric (GE.N) told Reuters.

In India, farmland acquisition has highlighted a broader standoff between industry and farmers in a country where two-thirds of the population lives on agriculture.

India identified two sites in July for U.S. firms to build reactors but the news was greeted with noisy protests by farmers refusing to give up their land.

Hundreds of poor farmers marched in New Delhi in October to protest against the acquisition of land for a proposed nuclear power plant in the western state of Maharashtra.

U.S. firms say they are leaving the task of land acquisition to the Indian government. Craig Hansen, Vice President of Babcock and Wilcox, a leading U.S. nuclear power generation company, said he hoped "the opportunity will outweigh the problems".

Meena Mutyala, business leader of Westinghouse's India strategy, said issues which also required resolution included fuel reprocessing and export licencing.