Why in the News?

The Union government is likely to move two crucial amendments in the laws governing the country’s atomic energy sector in the upcoming monsoon session of Parliament.

What’s in Today’s Article?

• Nuclear Sector (Introduction, Legislative Reforms, US Clearance, Implications for India’s Energy Security, Challenges, Way Ahead, etc.)

Introduction

• India is on the cusp of a transformative reform in its nuclear energy sector.
• The government is planning two key legislative amendments aimed at opening up atomic energy generation to private and foreign players.
• This move follows a significant regulatory clearance from the United States and is intended to unlock the commercial potential of the Indo-US civil nuclear agreement signed nearly two decades ago.

Legislative Reforms in Nuclear Sector

• The government is expected to table two critical amendments during the upcoming monsoon session of Parliament:
• Amendment to Nuclear Liability Law
  • The first proposed amendment pertains to the Civil Liability for Nuclear Damage Act, 2010.
  • Currently, the law channels the liability for nuclear accidents to equipment vendors, which has deterred major global players such as GE-Hitachi, Westinghouse, and Framatome from investing in India.
  • The amendment seeks to:
    • Cap the liability of vendors to the original value of the contract.
    • Introduce a time-bound liability window, beyond which vendors will not be held responsible.
  • This is expected to reassure foreign investors by mitigating their long-term legal and financial risks.
• Amendment to the Atomic Energy Act, 1962
  • The second amendment would allow private Indian companies, and possibly foreign firms, to operate nuclear power plants as generators, an activity currently reserved for state-owned entities like NPCIL and NTPC.
  • This will:
    • Enable public-private partnerships in nuclear energy.
    • Open doors for minority equity participation by foreign firms in upcoming nuclear projects.
    • Increase competition, technology infusion, and investment in India’s nuclear sector.

US Clearance Boosts India’s Position

• In March 2025, the US Department of Energy (DoE) gave regulatory clearance to Holtec International, allowing the company to transfer small modular reactor (SMR) technology to its Indian partners including Tata Consulting Engineers and Larsen & Toubro.
• The approval under Part 810 of the US Atomic Energy Act was a game-changer because:
  • It had previously prohibited US firms from engaging in nuclear design and manufacturing work in India.
  • The clearance now enables co-production and technology transfer for SMRs in India, aligning with India’s goals to localize manufacturing and reduce energy import dependency.
• This marks a significant shift, aligning Washington’s regulatory stance with New Delhi’s strategic and commercial interests.

Broader Geostrategic and Trade Context

• These reforms are part of a broader trade and investment outreach with the US, potentially contributing to an Indo-US trade pact currently under negotiation.
• The inclusion of nuclear cooperation enhances the bilateral relationship by:
  • Expanding clean energy cooperation.
  • Strengthening strategic trust between the two nations.
  • Positioning India as a future export hub for nuclear technology, particularly SMRs.

Implications for India’s Energy Security and Climate Goals

• The opening of the nuclear sector to private and foreign players could be a pivotal moment for India’s energy transition, especially as it aims to achieve net-zero emissions by 2070.
• Key implications include:
  • Accelerated nuclear capacity addition, which currently lags behind other clean energy sectors.
  • Diversification of clean energy sources, reducing reliance on coal and imported fossil fuels.
  • Promotion of innovation through global technology partnerships and domestic manufacturing.
• With India’s electricity demand projected to double by 2040, nuclear energy can play a vital role in ensuring baseload power availability with minimal carbon footprint.

Challenges and the Road Ahead

• Despite the potential, challenges remain:
  • Political opposition and public safety concerns about nuclear energy.
  • The arduous legislative path, particularly for amending the liability law.
  • Ensuring regulatory compliance and safety mechanisms while involving private players.
• However, if these reforms are passed, they could position India as a major hub for next-generation nuclear technologies like SMRs and advanced reactors, boosting energy independence and technological self-reliance.

Conclusion

The Indian government’s move to amend nuclear laws and allow private and foreign participation represents a landmark shift in policy. Backed by recent US regulatory clearances, this strategic reform has the potential to not only revitalize India’s nuclear energy program but also integrate it more deeply into global clean energy supply chains.

The success of this initiative will depend on the timely passage of legislation, regulatory preparedness, and stakeholder consensus.