India's lower house clears crucial nuclear bill

India's lower house of Parliament approved a crucial nuclear liability bill Wednesday aimed at attracting foreign companies to invest in the country's potentially vast atomic energy market.

Lawmakers from the ruling Congress and main opposition parties cleared the bill, which caps the liability of foreign firms at $320 million in the case of an industrial accident. It will also have be cleared by the upper house of Parliament before it becomes law.

Prime Minister Manmohan Singh told lawmakers that India had no option but to turn to nuclear power to meet its burgeoning energy needs.

"Nuclear power is an option which we should simply not ignore," Singh said during the daylong debate in the Lok Sabha, as the lower house is known.

However, some private firms, especially those from the U.S., have been reluctant to set up nuclear power plants in India without a law that would limit their compensation payments if there is a nuclear accident.

But such a cap stirred strong opposition in India, where victims of the 1984 gas leak at a Union Carbide plant in Bhopal are still seeking increased compensation for their suffering. That leak, the world's worst industrial disaster, killed 15,000 people.

India's potential nuclear energy market has been pegged at $150 billion. At present, nuclear energy forms only 3 percent of power available in the country.

But New Delhi has been keen to expand its nuclear power generation capacity due to environmental concerns over coal-based plants or large dams.

The international community had barred India from the trade in civilian nuclear technology after the country conducted nuclear tests in 1974 and 1998.

In 2008, India emerged from its nuclear isolation after it signed a landmark civil nuclear cooperation agreement with the United States. The 45-nation Nuclear Suppliers Group then lifted a three-decade global ban on nuclear trade with India.

The energy-starved country hopes to harness its new acceptance to build nuclear power plants.

U.S.-based firms GE-Hitachi and Westinghouse Electric, a subsidiary of Japan's Toshiba Corp, have been waiting for the liability bill to pass before they would enter India's nuclear energy sector.

Meanwhile, Russian and French nuclear companies linked to their governments have raced ahead and have been awarded contracts.