The government is moving two key amendments to liberalise India’s nuclear energy sector.
- Legislative Reforms Underway
- Amendment to Civil Liability for Nuclear Damage Act (CLNDA), 2010: Aims to limit open-ended liability of equipment suppliers.
- Amendment to Atomic Energy Act, 1962: Seeks to allow private and foreign players into nuclear power generation.
- Objective: Attract global investment, improve technology inflow, and accelerate nuclear capacity addition.
Need for the Amendments
- Global Vendors’ Assessment: Global vendors auditing India’s supply chains have flagged quality concerns in mid-and-lower tier suppliers and stressed the need for cybersecurity protocols.
- Attract Foreign Investment & Technology: Current restrictions deter global majors (Westinghouse, GE-Hitachi, Framatome) due to liability risks.
- Without private/foreign participation, India cannot scale to its target of 100 GW nuclear capacity by 2047.
- CLNDA’s liability provisions have kept Indo-US and Indo-French nuclear deals on hold for over a decade.
- Amendments will unblock stalled projects at Jaitapur (France) and Kovvada (US).
- Boost Domestic Industrial Base: Tier-2 and Tier-3 suppliers lack international quality certifications. Allowing private participation and global tie-ups will upgrade supply chain standards.
- Accelerate Capacity Addition: NPCIL alone cannot finance and build reactors at the required speed. Private sector entry will ease financing constraints and speed up construction.
- Meet Energy Security & Climate Goals: India’s electricity needs are expected to increase four to five times by 2047. Renewables alone cannot meet baseload needs.
- Nuclear energy is essential to achieve Net Zero by 2070.
- Enhance Strategic Autonomy: Reducing dependence on imported fossil fuels. Building indigenous SMR technology with global partnerships.
About India’s Nuclear Energy Sector
- Legal Framework: Governed mainly by the Atomic Energy Act, 1962 and Civil Liability for Nuclear Damage Act (CLNDA), 2010.
- Institutional Architecture: Department of Atomic Energy (DAE) oversees the sector
- Nuclear Power Corporation of India Limited (NPCIL) handles operations
- Atomic Energy Regulatory Board (AERB) regulates safety
- Bhabha Atomic Research Centre (BARC) develops technology.
- Energy Share: Nuclear contributes about 3% to India’s electricity mix (8,180 MW as of 2025). Plans aim for 22,480 MW by 2031–32 and 100 GW by 2047.
- Unique Position: India is among few countries pursuing thorium-based reactors, indigenous SMR (Small Modular Reactors) technology.
Key Provisions of Two Key Laws & Legal Reforms Underway
| Feature |
Atomic Energy Act, 1962 |
Civil Liability for Nuclear Damage Act, 2010 |
| Objective |
Regulates production, use, and control of atomic energy; vests ownership of nuclear facilities with govt. |
India’s nuclear liability law ensuring compensation for victims and defining responsibility for nuclear accidents. |
| Ownership of Facilities |
Only central govt. or govt. companies (e.g., NPCIL) can set up and operate nuclear plants. |
Does not regulate ownership; applies once the accident occurs. |
| Role of Private/Foreign Sector |
Restricted; No private/foreign ownership allowed. |
Vendors can supply equipment but face liability risks. |
| Liability Provision |
Not addressed; focused on regulatory & ownership issues. |
- Supplier Liability: Unlike international norms, the CLNDA first time introduced the concept of supplier liability over and above that of the operator’s liability.
- Operator Liability: Provides for strict and no-fault liability on the operator of the nuclear plant, where it will be held liable for damage regardless of any fault on its part.
- Operator’s is liabile for nuclear catastrophes up to ₹1,500 crore, which requires insurance or financial security.
- In case the damage claims exceed ₹1,500 crore, the government has to step in.
|
| International Alignment |
Predates global liability regimes. |
Aligns partly with Convention on Supplementary Compensation (CSC), but supplier liability clause is stricter than global norms. |
| Current Amendment Plan |
- To allow private & foreign participation in nuclear generation
- Enable public-private partnerships in nuclear energy.
- Open doors for minority equity participation by foreign firms in upcoming nuclear projects.
- Increase competition, technology infusion, and investment in India’s nuclear sector
|
- Cap the liability of vendors to the original value of the contract.
- Introduce a time-bound liability window, beyond which vendors will not be held responsible.
- This is expected to reassure foreign investors by mitigating their long-term legal and financial risks
|
Key Challenges Highlighted by Global Vendors
- Foreign Vendors’ Concerns
- Quality Upgrade Needed: Foreign vendors flagged urgent need for quality standards in mid- and lower-tier suppliers in India’s nuclear value chain.
- Training Programme Proposed: Suggestion to roll out a national supplier training programme for manufacturing Light Water Reactors (LWRs) and Small Modular Reactors (SMRs).
- Cybersecurity Risks Highlighted: Need for robust cybersecurity protocols to prevent hacking, loss of control, or hostage-like attacks on nuclear plant systems.
- Domestic Concerns in India’s Nuclear Sector
- Vendor Quality Gaps: Mid- and lower-tier suppliers lack standardisation, QA coverage, and international-level quality certifications.
- Manpower Shortages: Limited pool of highly-qualified QA professionals, leading to project delays during inspections.
- Capacity Constraints: Few companies have expertise in pressure vessels, heat exchangers, piping, and instrumentation, creating bottlenecks.
- Technology Mismatch: India’s civil nuclear sector is still PHWR-centric, while global technology dominance lies in LWRs and SMRs.
- Project Delays & Cost Overruns: QA bottlenecks and weak vendor capacity cause frequent delays, pushing up costs.
- Dependence on Few Firms: Critical reliance on a handful of companies (L&T, HCC, ECIL), creating systemic risks.
- Civil Works Gap: Very limited domestic capability in advanced construction areas such as post-tensioning containment systems.
- Cybersecurity Readiness: Indian nuclear manufacturers are not fully equipped to counter cyber threats, raising safety concerns.
- Limited Export Competitiveness: Without upgrading vendor quality, Indian industry cannot become an export hub in nuclear supply chains.
India’s Push for Small Modular Reactors (SMRs)
- Based on power generation capacity: International Atomic Energy Agency (IAEA) has defined Small modular Reactors as those nuclear power plants that produce electricity of up to 300 MW(e) per module, around one-third of the generation capacity of the traditional nuclear plants.
- Term SMR consists of
- Small: It is about the physical size of (SMRs) which is just much smaller than conventional nuclear power reactors.
- Modular: It is about making systems and components factory-assembled and transported as a unit to a location for installation.
- Reactors: It is about harnessing nuclear fission to generate heat to produce electrical energy.
Government is working on its own SMRs
- Indigenous Designs: BARC developing Bharat Small Reactor (220 MWe PHWR), BSMR (200 MWe PWR), and SMR-55 (55 MWe PWR).
- Applications: Useful for captive industrial needs, repurposing coal plants, and remote/off-grid regions.
- Demonstration Reactors: SMR-55 and BSMR-200 planned at DAE sites; expected rollout within 60–72 months.
- Self-Reliance Focus: No foreign partnership planned; development based on indigenous expertise.
- Strategic Value: SMRs could turn India into a future hub for modular nuclear technology exports.
Light-Water Reactors (LWRs)
- Definition: A type of thermal nuclear reactor that uses ordinary water (H₂O) as both coolant and neutron moderator.
- It produces heat by controlled nuclear fission.
- Fuel: Typically uses enriched uranium.
- Types:
- PWR (Pressurized Water Reactor): Water kept under high pressure, preventing it from boiling.
- BWR (Boiling Water Reactor): Water boils inside the reactor core to produce steam directly.
- Global Use: Most common nuclear reactor type in the world (e.g., US, France, Japan).
- Advantages: Proven technology, high efficiency, widespread operational experience.
- Limitations: Needs enriched uranium, generates high-level radioactive waste, and requires robust safety systems.
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International Experience & Lessons
- Japan’s Nuclear-Industrial Linkages: Quality programmes in the 1970s helped build a strong domestic vendor ecosystem.
- For Example: This led to companies such as Toyota and Sony becoming synonymous with quality benchmarks
- China’s Quality Assurance Programme: Strengthened supply chains in line with IAEA norms, enabling large-scale reactor exports.
- Finland’s Olkiluoto-3 Delays: Weak supplier base caused long delays, highlighting risks of inadequate quality control.
- U.S. Regulatory Model: Clear liability framework has encouraged private participation and innovation.
Implications of Reforms
- Energy Security: Nuclear power provides stable baseload electricity, reducing dependence on fossil fuels
- Climate Goals: Helps achieve net-zero by 2070 by diversifying clean energy mix.
- Atmanirbhar Bharat: Boosts self-reliance in critical nuclear technologies.
- Foreign Investment: Relaxed liability laws may attract global majors like Westinghouse, GE-Hitachi, and Framatome.
- Strategic Leverage: Nuclear collaboration strengthens Indo-US partnership and trade negotiations.
- Export Potential: Enhances India’s prospects as a manufacturing hub for SMRs and nuclear equipment
Expert & Task Force Recommendations
- National QA (Quality Assurance) Framework: Establish a comprehensive quality assurance programme covering all suppliers, with standardisation of manufacturing processes aligned to international norms.
- Round-the-Clock QA (Quality Assurance) Coverage: Ensure continuous three-shift QA coverage at project sites, supported by full-time QA teams and Third-Party Inspectors (TPIs) at major supplier locations to prevent inspection-related delays.
- Skilled Manpower Development: Build a pool of highly-qualified QA professionals capable of taking timely decisions on inspections, quality control, and management.
- Vendor Base Expansion: Increase manufacturing capacity and diversify vendors for critical nuclear equipment such as reactor pressure vessels, steam generators, heat exchangers, piping, instrumentation, and containment systems.
- Indigenisation & Technology Diversification: Reduce over-dependence on a few players (e.g., ECIL, L&T, HCC) by promoting indigenisation and wider private participation, especially in control, instrumentation, and advanced civil works.
- Training for New Reactor Types: Roll out specialised training programmes for suppliers to handle LWR and SMR technologies, preparing them for future reactor formats.
- Learning from Global Models: Draw lessons from Japan’s quality-driven industrial model, IAEA’s QA codes, and China’s regulatory-led assurance programme to frame India’s nuclear quality roadmap.
Conclusion
The twin amendments mark a historic reform in India’s nuclear policy, aiming to attract global investment, promote self-reliance, and accelerate clean energy transition. However, success depends on addressing quality gaps, liability concerns, and cybersecurity risks while ensuring strong public trust and regulatory safeguards.
6 Sep 2025
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