Kudankulam Nuclear Plant Key Area Of Concern During India, Russia Talks; Trade To Be Improved In Other Areas Including Infrastructure And Aviation

The Kudankulam Nuclear Power Project, a nuclear power station set up jointly by India and Russia in the southern Indian state of Tamil Nadu, was one of the key topics of discussions during Indian Prime Minister Manmohan Singh’s three-day visit to Russia that began on Sunday, amid a legal impasse over India’s liability laws.

Both nations said they will expedite an agreement over two more units at the Kudankulam power plant, even as two other units that were commissioned earlier are at different stages of completion. The two trade partners, who registered a 25 percent increase in bilateral trade to reach a volume worth more than $11 billion in 2012, also discussed setting up a long-term land route to transport hydrocarbons from Russia to India, which imports 80 percent of its crude oil and 25 percent of its natural gas.

“The Kudankulam nuclear power project is an important symbol of our strategic partnership,” Singh said in a statement after talks with Russian President Vladimir Putin on Monday. “We look forward to commercial power production from Unit 1 very shortly, and the completion of work on Unit 2 next year.”

However, the rejuvenated relationship between the former Cold War allies is not completely trouble-free, as Russia has objected to the plant coming under the ambit of India’s Nuclear Civil Liability Law and wants the project to be covered under a bilateral agreement that forms the basis of the project.

“I conveyed to President Putin our commitment to fully implement the road map on civil nuclear cooperation that was signed during his visit to India in 2010. We have directed our officials to resolve all outstanding issues at the earliest,” Singh said.

The deal is close to signing and is subject to a final approval from lawyers from both sides, Reuters reported, citing unnamed sources with knowledge of the matter.

Discussions also stressed on “significant potential for cooperation in such sectors as oil and gas, pharmaceutical and medical industry, infrastructure, mining, automobiles, fertilizers, aviation, as well as in modernization of industrial facilities located in the two countries,” an official statement from the prime minister's office said.

India, which is one of the world’s biggest consumers of fertilizers, is also planning to secure supplies of diammonium phosphate, a crop nutrient, from Russia over the long term, Reuters reported, citing an official associated with a state-run fertilizer company in India.

“There are two options. One is to import raw material and process it in India. The other is to process raw material in Russia itself and bring finished products like DAP to India,” another Indian official said.

On an average, India imports more than 7 million tons of phosphate-based fertilizer annually, and securing long-term supplies could shield the country against fluctuation in prices, the report said, citing officials.