New Delhi, Feb 28 (IANS): India and Russia are close to resolving their differences over the nuclear liability law that has held up agreement on construction of units 3 and 4 of the Kudankulam Nuclear Power Project (KNPP), Rosatom, the plant's Russian bulder, said Friday.

"Russia and India are nearing resolution of disagreements on the issue of application of the Indian law related to civil liability for nuclear damages to the project of construction of the second stage Kudankulam NPP," said Rosatom, Russia's state atomic agency, in a release.

It said that following discussions this week between officials of Rosatom, and the Nuclear Power Corporation of India (NPCIL) in Mumbai, both "parties approved the draft project of the technical and economic agreement on construction of the power units No 3 and No 4 of the Kudankulam NPP".

India's Civil Liability for Nuclear Damages Act, 2010, which holds the operator wholly liable in the event of an accident, gives it a right of recourse against suppliers if the accident is caused by defective equipment.

The Russian position draws on the inter-government agreement of 2008, which makes the operator alone liable for possible damages at Kudankulam.

Reports earlier had spoken of India proposing an insurance cover for the Russian components that would allow suppliers to know exactly the amount of damages they would be liable for in the event of a nuclear disaster.