NEW DELHI (TIP): Ahead of US President Barack Obama‘s arrival in India, a specific US demand seeking “flag rights in perpetuity” for any material or equipment used in a US-built reactor has thrown, to use an American expression, a monkey wrench into the nuclear contact group meeting underway in London.

The information is  that it is the main sticking point preventing the two sides from announcing successful conclusion of the talks, something which both the sides wanted to achieve as the main takeaway from the visit. This was even as some progress was made over the liability issue.

The talks in London saw the US side insisting on rights to forever monitor use of any material or equipment in a US reactor even if it is sourced from a third country. While MEA spokesperson Syed Akbaruddin said in a media briefing that progress had been made over the nuclear issue, it is learnt that this one issue was threatening to derail the talks. The negotiating teams have now left it to Obama and Modi to take the final call.

This administrative arrangement which the US has been seeking is based on its reading of the civil nuclear agreement which the two countries had signed. Indian officials told their counterparts in London that it was an extremely intrusive measure and India would never agree to it as it would impinge on its nuclear sovereignty. They cited the example of the nuclear agreement with Canada, which was initially stalled after the US neighbor insisted on similar conditions but finally materialized after concessions made by Prime Minister Stephen Harper. The Canadian PM acknowledged India’s strong non-proliferation commitments and agreed to inspections only by IAEA.

The Indian side had gone to London hoping that the US officials would also show similar understanding of India’s position and agree to inspections by IAEA only. What India is particularly upset about is that under the arrangement US is seeking, US authorities will have rights to forever monitor uranium, or any other material or equipment, sourced even from a third country like Kazakhstan or Australia if it is used in reactors built by American companies like Westinghouse or GE Hitachi.

As Times of India had reported Tuesday, January 20, the third contact group meeting was the last chance for the 2 countries to find a way to operationalize the nuclear agreement ahead of the Modi-Obama summit by addressing the liability and other issues. But while the US seems to be coming round to the Indian proposal for setting up an insurance pool to provide cover to suppliers, the talks have come unstuck over an administrative issue with neither side relenting. The Indian government is keen to ensure a breakthrough in the contact group meeting as a means to convince the US about its commitment to the civil nuclear deal.