India plans to amend Nuclear Liability Laws

Context: India has announced plans to amend the Civil Liability for Nuclear Damage Act 2010 and the Atomic Energy Act, 1962, to enable active participation of the American and French nuclear power firms in the Indian Nuclear Energy sector. 

Civil Liability for Nuclear Damage Act (CLNDA), 2010

• India enacted CLNDA in 2010 to provide a quick compensation mechanism for victims of a nuclear accident.
• The Act establishes a strict and no-fault liability for nuclear plant operators, meaning they are liable for damage regardless of fault. 
• However, the operator of the nuclear installation, after paying the compensation for nuclear damage shall have the right to recourse where-
  • The nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services.
  • The nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage.
• The operator will have to maintain a financial security to cover its maximum liability of ₹1,500 crore for civil nuclear damage and requires the operator to cover liability through insurance or other financial security.
• In case the damage claims exceed ₹1,500 crore, the gap will be bridged by the Central Government. The government liability amounts to the rupee equivalent of 300 million Special Drawing Rights (SDRs) or about ₹2,100 to ₹2,300 crore. 

Atomic Energy Act, 1962

• The Atomic Energy Act, 1962 provides for the development, control and use of atomic energy for the welfare of the people of India and for other peaceful purposes. 
• The central government through the Nuclear Power Corporation of India (NPCIL) holds the authority for activities related to nuclear energy, including its production, development, use, and disposal.
• The Act restricts private companies from owning and operating nuclear power plants in India.
• The 2015 amendment to the Atomic Energy Act, allows NPCIL to form joint ventures with other public sector units (PSUs) to secure funding for new projects. However, this does not extend to private or foreign companies. 
• Currently, private companies can participate in specific areas like supplying components and reactors, but not owning or operating plants. Discussions are ongoing about allowing Public-Private Partnerships (PPPs). This would require amendment to the Act.

Impediments in Nuclear Cooperation

India has signed the Civil Nuclear Agreement with the U.S. and France. Despite this several impediments hinder the progress of their collaboration. This includes: 

• Nuclear Liability law of India: 
  • India’s Nuclear Liability law (Civil Liability for Nuclear Damage Act, 2010) has been a barrier to the growth of the nuclear energy industry. 
• The strict liability law places the burden of compensation for nuclear accidents on the plant operator, which can deter private companies from investing in nuclear power. 
• Also, as per the Act, the liability can be shifted from the operator to the vendor or supplier in case the accident is due to equipment or material. The Act contradicts the International Convention for Supplementary Compensation for Nuclear Damage (CSC) which focuses only on the liability of operators of the plant. 
• This has created apprehension among potential foreign suppliers, delaying India’s ambitious nuclear energy plans. E.g., Nuclear liability is the major issue why the deal to install French EPRs at Jaitapur has not made progress.
• The Atomic Energy Act, 1962 prohibits investments by the private sector in nuclear power plants.
• Regulatory Challenges:
  • The Indian regulatory framework for nuclear energy is stringent, it requires extensive safety certifications and compliance with international standards. 
  • E.g., Process of certifying European Pressurised Reactor (EPR) technology has been lengthy, which has slowed down project timelines and created uncertainties for investors.
• Financial Considerations: High costs associated with building and maintaining nuclear power plants pose a financial challenge. The Jaitapur project (with an estimated capacity of 990 MW) requires large investment.
• Technological transfer: While countries have committed to enhancing technological collaboration, concerns about intellectual property rights and technology transfer can create friction. 

Significance of the Proposed Amendments:

As of January 30, 2025, India’s nuclear capacity is 8180 MW from 22 reactors (the only foreign operator in India is Russia’s Rosatom). India aims to achieve 100 GW of Nuclear energy capacity by 2047. This would require greater participation from domestic private companies and foreign firms. 

• CLNDA would be amended to separate operator’s liability from supplier’s liability to bring it in line with the International Convention for Supplementary Compensation for Nuclear Damage (CSC). It will resume the progress of:
  • Electricite de France (EDF) MoU to build six EPR1650 reactors at Jaitapur in Maharashtra, signed in 2009.
  • American Westinghouse Electric Company’s MoU, to build six AP1000 reactors at Kovvada in Andhra Pradesh, signed in 2012. 
• It is also expected to help India tap into new nuclear power technologies, particularly for small modular reactors (SMR). 
• The amendment in the Atomic Energy Act would liberalise investment in power projects in India.

Also Read: Nuclear Energy Sector in Union Budget 2025-26 

Thus, the amendments will further the nuclear energy sector in India and will set clear legal standards in Indian domestic legislation aligned with international standards.