CIVIL NUCLEAR LIABILITY IN INDIA

THE CONTEXT: India aims to increase its nuclear capacity from the current ~8.8 GW to 100 GW by 2047; however, marquee projects such as the 9,900 MW (six-unit) European Pressurized Reactor site at Jaitapur, Maharashtra, remain stalled due to suppliers seeking certainty on liability.

THE BACKGROUND:

• • International norm: Operator-exclusive, capped and time-barred liability (Vienna 1963, Paris 1960; CSC 1997).
  • Indian path: Civil Liability for Nuclear Damage Act (CLNDA) 2010 introduced additional “right of recourse” against suppliers under Section 17(b) and kept civil/criminal action alive under Section 46—a post-Bhopal political compromise to reassure the public.

THEORETICAL FRAMEWORK (WHAT–WHY–HOW)

TECHNICAL TERMS EXPLAINED:

• • Special Drawing Right (SDR): An International Monetary Fund reserve asset valued against a basket of major currencies; CLNDA pegs sovereign backstop to 300 SDR million (≈ ₹2,100-2,300 cr).
  • Right of Recourse: Legal right of the operator to sue the supplier after compensating victims.

THE CURRENT SCENARIO:

• • Reactor fleet: 24 operational units, 8.78 GW, FY 2024-25 plant load factor ≈ 87 %.
  • Pipeline: 21 reactors, 15.7 GW sanctioned; private firms invited to co-develop civil works and fund ₹26 bn each.
  • Policy churn: Draft amendment (April 2025) proposes capping supplier exposure to contract value and limiting recourse window—aimed at EDF, Westinghouse, GEH.

THE SIGNIFICANCE:

• • Energy security: Dispatchable, low-carbon baseload complements renewables for the Net-Zero 2070 pathway.
  • Strategic autonomy: Diverse foreign partnerships (Russia, France, U.S.) dilute technology dependence.
  • Economic multiplier: DAE estimates that *₹1 invested yields ₹3.4 GDP via localisation, high-skill jobs, and advanced metallurgy clusters.

THE DRIVERS:

• • Climate commitments under the Paris Agreement and Panchamrit pledges.
  • High per-capita demand growth: CEA projects 6.5 % CAGR electricity demand to 2040.
  • Modularisation push: ₹20,000 cr Small Modular Reactor (SMR) R&D mission (Budget 2025-26).

THE ISSUES:

• • Section 17(b) – Automatic supplier liability for “patent or latent defects” even without contractual clause—only country worldwide to legislate such breadth.
  • Section 46 – Open channel to tort suits; supplier could face unlimited claims in ordinary courts.
  • Undefined “nuclear damage”—Government yet to notify Rules, raising scope creep into environmental degradation or loss of livelihood.
  • INIP capacity mismatch—₹1,500 cr pool < potential multibillion-rupee claims; no global reinsurer participation due to statutory ambiguity.
  • Financing risk premium—Higher cost of capital inflates nuclear LCOE by 0.8-1.1 ¢/kWh vis-à-vis coal-SC.
  • Centre-State politics—Land Acquisition & coastal regulation delays (Jaitapur protests, 2011-24).
  • Regulatory overlap—Atomic Energy Regulatory Board (AERB) lacks statutory independence compared with U.S. NRC, raising investor perception of conflict of interest.
  • Legacy trust deficit—Bhopal & Fukushima amplify public apprehension.

GLOBAL PERSPECTIVE & BEST PRACTICES

 GOVERNMENT STAND & RECENT MOVES

• • 2013 MEA FAQs: “17(b) is permissive, not mandatory”—but statutory wording still unconditional.
  • Indian Nuclear Insurance Pool operational since 2015; NPCIL premium subsidised for first five years.
  • Draft 2025 Amendment: Caps supplier liability to contract value, sets 5-year limitation, harmonises with Article 10-CSC.

THE WAY FORWARD:

• • Clarify Statute: Amend Sections 17(b) and 46 to expressly limit recourse to contractually agreed-upon cases and intentional misconduct, aligning with the CSC; removes a legal overhang that deters investors.
  • Scale the Insurance Pool: Raise INIP capacity to ₹6,000 cr and allow foreign reinsurers under the IRDA sandbox; spreads risk and narrows premiums. Introduce a sovereign guarantee layer above pool to mirror Price-Anderson style indemnity.
  • Strengthen Regulator: Enact the Nuclear Safety Regulatory Authority Bill, granting AERB full autonomy and parliamentary oversight. Mandate periodic peer reviews under IAEA Integrated Regulatory Review Service. Publish safety assessment reports for public scrutiny to build trust.
  • Codify ‘Nuclear Damage’: Notify comprehensive Rules defining personal injury, environmental, economic, and trans-boundary harms with objective thresholds. Align assessment methodology with the IAEA Model Protocol to ensure predictable valuation. Enable quick claims settlement through a specialised Nuclear Claims Tribunal on the lines of the NGT.
  • Plan for Waste & Decommissioning: Finalise Deep Geological Repository site using Geological Survey of India data; earmark Decommissioning Fund via 2 paise/kWh levy. Promote closed fuel cycle and the Accelerated Breeder Reactor programme to burn actinides. Publish lifecycle cost accounting in the public domain to dispel the “hidden cost” critique.
  • International Diplomacy: Use Quad and I2U2 platforms to negotiate mutual recognition of liability coverage and supply-chain security. Ratify CSC Protocol Annex allowing supplementary compensation access; signals rules-based commitment. Host an IAEA ministerial in 2026 on “Sustainable Nuclear Finance” to showcase regulatory reforms.

THE CONCLUSION:

Transparent risk pooling and autonomous regulation foster societal trust, a prerequisite for large-scale, sensitive infrastructure in a democracy. A balanced liability architecture will strengthen the rule of law, catalyze Foreign Direct Investment (FDI), and support cooperative federalism by addressing state-level concerns over safety and land use.

UPSC PAST YEAR QUESTION:

Q. With growing energy needs, should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. 2022

MAINS PRACTICE QUESTION:

Q. India’s Civil Liability for Nuclear Damage Act has been criticised for creating legal uncertainty that deters foreign technology providers while aiming to safeguard public interest. Evaluate.

SOURCE:

https://www.thehindu.com/news/national/explained-what-are-the-ambiguities-in-indias-nuclear-liability-law/article66782725.ece