India To Address Concerns of Private Sector in Civil Nuclear Segment

Syllabus: GS3/Energy

Context

• The Union Minister of Science and Technology has said that India will address the apprehensions of the private sector globally about investments in the civil nuclear sector.

About

• The Nuclear Sector was opened up to achieve the ambitious target of producing 100 GW of atomic power by 2047.
  • Currently, India produces 8780 MWe of nuclear power and plans to scale it up to 22,480 MW by 2031-32.
• India’s nuclear sector is governed by the Atomic Energy Act, 1962, under which only government-owned entities such as NPCIL can generate and supply nuclear energy.
  • There has been no private sector involvement in India’s nuclear power sector so far.
• In the budget 2025, the Finance Minister announced the government’s intention to amend key legislation, including the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, to facilitate private sector involvement.

Need for Private Players in Nuclear Sector

• Nuclear Capacity: India’s plans to increase its nuclear power capacity to 100 GW by 2047. 
• Energy Demand Growth: India’s electricity demand is expected to increase 4-5 times by 2047, and nuclear power will help meet base-load demand alongside renewables.
• India’s Targets: To reduce the emission intensity of its GDP by 44% by 2030 from the 2005 level.
  • To achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

Concerns of Private Sector

• India’s supplier liability in the Civil Liability for Nuclear Damage Act (CLNDA)  imposes strict and no-fault liability on the operator.
• Reason:
  • Inspired by past tragedies like the Bhopal Gas Disaster (1984), where defective equipment played a role.
  • Legislators aimed to ensure accountability beyond just the operator.
• Operator Liability:
  • As per the Act, operator means the Central Government or any authority or corporation who has been granted a licence pursuant to the Atomic Energy Act, 1962 for the operation of that installation.
  • Operator must pay ₹1,500 crore in damages, insured or secured via financial means.
  • If claims exceed this, the government will cover up to 300 million Special Drawing Rights (SDRs) (₹2,100–₹2,300 crore).
• Supplier Liability (Section 17): It is unique to India and introduces liability for suppliers under:
  • 17(a): If contractually agreed.
  • 17(b): If an incident results from defective equipment or services (even if not intentional).
  • 17(c): If caused intentionally by the supplier.
  • This goes beyond Convention on Supplementary Compensation for Nuclear Damage (CSC), which allows recourse only if contractually agreed or intentional wrongdoing is proven.
• Legal Ambiguity (Section 46): It states that other legal proceedings (civil/criminal) are not barred by the Act, which opens the door to civil suits outside CLNDA.
  • Raises fear among suppliers of being sued under tort law, potentially leading to unlimited liability, despite the capped liability for operators.
  • Tort law is considered to be a form of restorative justice since it seeks to remedy losses or injury by providing monetary compensation.

Legal Reforms Underway

• Easing Nuclear Liability Law (Civil Liability for Nuclear Damage Act, 2010): Its objective is to limit the liability of equipment vendors in case of a nuclear accident. Key Proposed Changes:
  • Monetary Cap: Liability may be capped to the original contract value.
  • Time Limit: Introduce a statute of limitations for how long liability applies.
• Amendment to the Atomic Energy Act, 1962: Its objective is to allow private and foreign players to enter nuclear power generation.
  • Current Restriction: Only state-owned entities like NPCIL and NTPC Ltd can operate nuclear plants.
  • Proposed Change: Permit minority equity participation by foreign/private entities in upcoming projects.

Conclusion

• These developments reflect a historic shift in India’s nuclear policy. By addressing legal and regulatory obstacles, India is poised to:
  • Unlock foreign investment and advanced technology.
  • Expand its clean energy portfolio through nuclear power.
  • Reinforce strategic alignment with the U.S. under the civil nuclear framework.

Source: TH