Civil Nuclear Sector Reforms: Aligning India’s Atomic Energy Laws with Global Standards

India is undertaking major legislative reforms to its civil nuclear framework—primarily amending the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) and the Atomic Energy Act, 1962—to unlock private and foreign investment, harmonize liability norms with international conventions, and accelerate capacity expansion.

India civil nuclear sector reforms illustration

Background and Rationale

The 2010 CLNDA was enacted to ensure prompt, no-fault compensation to victims of a nuclear accident, but its broad “right of recourse” provision and uncapped supplier liability have deterred global technology vendors such as Westinghouse and Framatome from committing to Indian projects. Likewise, the Atomic Energy Act confines nuclear generation to state-owned entities like NPCIL and NTPC, constraining private-sector participation.

Key Amendments to the Civil Liability for Nuclear Damage Act, 2010

1. Section 17(b) Revision
   • Amending Section 17(b) to limit the operator’s recourse rights against equipment suppliers, thus aligning with the 1997 Convention on Supplementary Compensation framework and reducing vendor exposure.
2. Clarifying “Supplier” Definition
   • Tightening Rule 24 of the CLND Rules to distinguish primary suppliers (e.g., reactor manufacturers) from sub-suppliers, thereby shielding smaller component vendors from unintended liability.
3. Capping Supplier Liability
   • Proposals to cap supplier liability at the original contract value and introduce a statute-of-limitations for recourse actions, replacing the current unlimited-liability model with a finite, predictable exposure conducive to commercial insurance.

Amendments to the Atomic Energy Act, 1962

1. Opening Nuclear Generation to Private Players
   • Revisions to allow private and potentially foreign companies to own, operate, and finance nuclear power plants—breaking the state-monopoly on nuclear generation and tapping private capital.
2. Strengthening Regulatory Independence
   • Creating an independent Nuclear Safety Regulatory Authority to replace the Atomic Energy Regulatory Board, insulating safety oversight from the Department of Atomic Energy’s promotional functions and enhancing investor confidence.

Alignment with International Conventions

• Convention on Supplementary Compensation (CSC): India ratified CSC in 2016, and the CLNDA amendments seek full compliance by mirroring its liability-limitation and compensation-pooling mechanisms.
• IAEA Safety Standards: Complementary efforts aim to harmonize India’s regulatory framework with IAEA norms, positioning India among global leaders in nuclear safety and liability.

Driving Forces and Implementation Timeline

• Investor Confidence: The U.S. Department of Energy’s recent 10 CFR 810 clearance for small modular reactor technology transfers underscores the urgency of legal clarity.
• Policy Consensus: Consultations by DAE, AERB, NITI Aayog, MEA, and the Ministry of Law & Justice, with draft amendments expected during the Monsoon Session of Parliament.
• Capacity Expansion Goals: Under the “Nuclear Energy Mission for Viksit Bharat,” India aims for 100 GW of nuclear capacity by 2047, including five indigenously designed SMRs by 2033.

Implications for India’s Nuclear Future

• Accelerated Project Timelines: Capped liability and clearer recourse rules will shorten due-diligence lead times and speed up reactor construction.
• Broader Technology Access: Global vendors will be more willing to transfer advanced reactor and fuel-cycle technologies, including SMRs and high-temperature gas-cooled reactors.
• Enhanced Safety and Transparency: An independent regulatory authority and alignment with international liability conventions will bolster public trust, regulatory transparency, and nuclear liability insurance availability.