Awaiting clarity on Indo-US nuclear deal: L&T

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26 Aug, 2025 12:21

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Prime Minister Narednra Modi and US President Barack Obama announced that the two countries had reached an understanding on civil nuclear liability. MV Kotwal, Whole-Time Director & President (Heavy Engineering), L&T says the company is awaiting more clarifications on the nuclear deal.

In an interview to CNBC-TV18, Kotwal says no details have been provided on how the insurance pool will work but welcomes the deal wholeheartedly.

“This deal will open ordering opportunities for manufacturing companies and we will need big investment in technology and staff capabilities to cater to it” he adds.

Larsen and Toubro is involved in making prototypes for the Defence Research and Development Organisation (DRDO) has already put in place facilities for warships, he further adds.

“ (This deal)... will open up a large potential for L&T to make even more substantial contributions to India's nuclear program in partnership with  the identified foreign companies," Kotwal said in an statement after the deal was announced.

A: Unfortunately not yet, but whatever discussions we had earlier with GIC also led us to believe that they would cover Rs 750 crore and the balance would be sovereign guarantee by the government, but that was before this whole discussion that had taken place between our Prime Minister and President Obama. So, after that we know that there is an understanding reached but the clarity on exactly how this insurance pool will be work and how it will be contributed to and whether it will be actually applicable to all the suppliers is something which we are awaiting clarification for.

A: There are a few other things which are very important because the famous clause 17, the three parts to it which were independently applicable in the act as it stands then there was this question of rules which were given a year later, rule 24 which was contentious and then the last part was clause 46 of the act which really talks about various other laws of the country including law of tort. Now the major problem has been that before all this happened, before the civil nuclear liability, the nuclear damages act came into the picture we were completely as suppliers indemnified against all, including the law of torts.

So, now the question is whether clause 46, how that is going to be dealt with is not yet clear to us and as far as rule 24 which actually gave some kind of limit as a cap of the liability whether that is at all valid is not clear. So, these clarifications are yet to emerge. I only believe that since that has been at an apex level an understanding on the whole subject and that the government already was aware of all these problems which we had faced because we have been bringing this to the notice of the government at various levels. So, I presume that the agreements would be in the right direction. I can’t say with complete clarity because until we see the actual agreement itself but I believe it is a step in the right direction and therefore we are hopeful this will open up huge opportunities for Indian manufacturers.

A: Rule 17 had three parts to it A, B and C and then each was independently applicable. The first, A, was whether it forms part of the contract itself. B is the contentious one where there is a recovery or a compensation which could be sought from suppliers whether there is a patent or latent defect. These are the things which were never applicable in any other international kind of agreement. So, this was only for Indian suppliers and therefore naturally we had raised our point that this particular thing should not be applicable but this is what really was the bone of contention also for all foreign suppliers.

So, now that there has been some understanding reached with especially the American suppliers or rather at least the government has said so, we will then have to now wait for clarification. You would also have seen that even one of the CEOs of the American companies have also said that he needs to have a little more clarity on the subject but he believes that the step is in the right direction.