RE-ENGINEERING INDIA’S NUCLEAR GOVERNANCE

THE CONTEXT: India has announced a sweeping reform package to amend the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) and the Atomic Energy Act, 1962, with the twin objectives of (a) de-risking suppliers through a globally harmonised liability regime and (b) opening plant ownership and operation to private and foreign equity. The Union Budget 2025-26 explicitly committed to steering these Bills through Parliament as a pillar of the “Nuclear Energy Mission for Viksit Bharat”, which targets 100 gigawatts (GW) of nuclear capacity by 2047—up from 8.18 GW today.

THE BACKGROUND:

• • Why the 2010 law stalled investment: Section 17(b) of the CLNDA allows the public-sector operator (usually Nuclear Power Corporation of India Ltd.) an automatic “right of recourse” against any supplier whose component has a “patent or latent defect”. Major vendors such as Westinghouse Electric (United States) and Framatome (France) flagged this open-ended liability as commercially uninsurable, so no large foreign-technology reactor has broken ground since 2010.
  • Global benchmark: Most nuclear nations follow the Convention on Supplementary Compensation (1997) or earlier Vienna/Paris Conventions, channelling liability solely to the operator and capping exposure through an insurance-cum-indemnity pool (for example, the United States’ Price-Anderson Act, which now covers roughly US $15 billion per accident).

THEORETICAL FRAMEWORK:

WHAT, WHY & HOW OF THE REFORM:

• • What is changing?

1. CLNDA amendments: Remove or significantly narrow Sec 17(b); define “supplier” narrowly to exclude sub-vendors; impose a dual cap (monetary + temporal) on recourse.

2. Atomic Energy Act amendments: Create a licence category for joint-venture Special-Purpose Vehicles in which a government-owned company holds majority equity but private or foreign firms can hold up to 49 percent.

• • Why now?

• • • The Department of Energy (United States) granted Holtec International an unprecedented Part 810 authorisation, green-lighting transfer of SMR-300 technology to its Indian partners.
    • India’s Net-Zero 2070 pathway needs reliable, low-carbon baseload to complement variable renewables; modelling by NITI Aayog shows at least 60–80 GW of nuclear by 2050 to meet grid-stability requirements.

• • How will it work?

• • • A ₹1,500 crore nuclear-insurance pool backed by General Insurance Corporation covers operator liability, while additional Government indemnity kicks in above the cap—mirroring the Price-Anderson “layer cake”.

TECHNICAL DETAILS & SPECIFICATIONS:

GLOBAL PERSPECTIVE & BEST PRACTICES:

THE ISSUES:

• • Regulatory Over-stretch: The Atomic Energy Regulatory Board (AERB) must supervise a diversified private supply chain without diluting safety culture.
  • Financing Risk: Nuclear projects entail long gestation; absence of sovereign guarantees may raise cost of capital by 150–200 basis points.
  • Waste Management Vacuum: India’s closed-fuel-cycle strategy is technologically sound but lacks a licensed deep geological repository.
  • Human Capital Deficit: NPCIL’s ageing workforce; need for 17,000 additional certified reactor-operators and I&C engineers by 2035.
  • Land & Water Conflicts: New coastal sites (e.g., Jaitapur, Kovvada) face environmental litigation; inland SMR siting demands assured cooling water.
  • Public Perception & Risk Communication: Post-Fukushima risk aversion remains high in host communities—could delay land acquisition and clearances.
  • International Obligations: Harmonising with the Convention on Supplementary Compensation requires robust domestic compensation rules to pass the CSC’s Annex.

THE WAY FORWARD:

• • Clarify Liability Statute: Enact the proposed cap-and-limit model and notify model supply contracts within six months. This provides predictable risk allocation. Investor confidence will rise, lowering cost of capital.
  • Strengthen Insurance Pool: Expand the nuclear insurance pool to ₹3,000 crore with graded premium sharing between PSU operator and suppliers. Leverage re-insurance from GIC Re and international pools. Ensures quick victim compensation.
  • Phased Private Entry: Pilot two PSU-led joint-venture projects (one large PWR, one SMR) allowing ≤49 % private equity. Review safety and financing outcomes after first fuel-cycle before liberalising further. De-risks systemic exposure.
  • Regulatory Capacity-Building: Create an independent Nuclear Safety Commission by statute; recruit 500 domain experts over five years. Mandate digital twin simulations for licensing. Enhances transparent oversight.
  • Domestic Manufacturing Hubs: Declare Nuclear Manufacturing Clusters under the Production-Linked Incentive scheme near existing heavy-engineering bases (e.g., Hazira, Tarapur). Offer customs-duty waivers for zero-defect export-grade components. Spurs ‘Atmanirbhar’ supply chain.
  • Waste-to-Resource Strategy: Fast-track the Prototype Fast Breeder Reactor (PFBR) and complete a pilot metallic fuel reprocessing plant by 2030. Demonstrate closed-cycle economics. Minimises high-level waste stockpiling.

THE CONCLUSION:

Harmonising the CLNDA with the CSC and allowing up to 49 % private (and foreign) equity in nuclear SPVs can catalyse roughly ₹3 lakh crore of fresh investment, scaling capacity from the present 8.2 GW to 100 GW by 2047 and averting an estimated 340 million tonnes of CO₂ each year.

UPSC PAST YEAR QUESTION:

With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. 2018

MAINS PRACTICE QUESTION: 

Legal rigidity rather than technological complexity has been the primary bottleneck in India’s civil nuclear expansion. Evaluate

SOURCE:

https://indianexpress.com/article/explained/work-underway-for-changes-in-two-key-laws-can-open-up-civil-nuclear-sector-10096652/