Why in news?

The US is finalizing measures to ease regulations hindering civil nuclear cooperation with India, as part of advancing the Indo-US nuclear deal.

US National Security Advisor Jake Sullivan announced plans to remove Indian government entities, including Bhabha Atomic Research Centre (BARC), Indira Gandhi Atomic Research Centre (IGCAR), and Indian Rare Earths Limited (IREL), from the US entity list.

This move aims to facilitate collaboration between India's nuclear institutions and US companies.

What’s in today’s article?

• What is US Entity List?
• Indo-US Civil Nuclear Deal
• Key Legal Barriers to Indo-US Civil Nuclear Deal
• Indo-US Civil Nuclear Collaboration: Opportunities
• US eases curbs to push nuclear deal – Key highlights

What is US Entity List?

• About
  • The US Entity List includes foreign individuals, businesses, and organizations subject to export restrictions and licensing requirements for specific goods and technologies.
• Purpose of the List
  • Compiled by the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce, it aims to prevent unauthorized trade that could support:
    • Terrorism
    • Weapons of Mass Destruction (WMD) programs
    • Activities against US foreign policy or national security interests.

Indo-US Civil Nuclear Deal

• About
  • The Indo-US Civil Nuclear Deal, signed in 2008, marked a watershed moment in India-US relations.
  • It allowed India to engage in nuclear trade despite not being a signatory to the Non-Proliferation Treaty (NPT).
  • The agreement granted India access to nuclear fuel, reactors, and technology for civilian purposes while committing to the separation of its civilian and military nuclear programs under IAEA safeguards.
• Progress
  • The deal received initial enthusiasm, leading to amendments in US laws like the Hyde Act to accommodate India's unique status.
  • India signed agreements with several countries for nuclear fuel and reactor technologies.
  • However, the operationalization of the agreement has been slow, with limited progress in the construction of nuclear reactors or the flow of significant US investments.
• Why Progress Has Been Slow
  • Key Legal Barriers (discussed separately below)
  • High Costs: Setting up nuclear reactors involves significant costs, making nuclear energy less competitive.
  • Regulatory and Bureaucratic Hurdles: Long-standing regulatory issues, including delays in clearances and approvals, have hindered progress.
  • Public Opposition: Concerns over nuclear safety, particularly after incidents like the Fukushima disaster (2011), have slowed reactor projects due to protests and resistance.
  • Geopolitical Factors: Divergences over non-proliferation commitments and strategic priorities, as well as legacy issues in bilateral relations, have created friction.
  • Technological Constraints in India’s Nuclear Programme
    • India’s civil nuclear programme primarily relies on Pressurised Heavy Water Reactors (PHWRs) using heavy water and natural uranium.
    • PHWRs are becoming outdated compared to the more widely adopted Light Water Reactors (LWRs), where the US, Russia, and France lead in technology.

Key Legal Barriers to Indo-US Civil Nuclear Deal

• US Regulatory Impediments (10CFR810):
  • Part 810 of Title 10, Code of Federal Regulations, under the US Atomic Energy Act of 1954, restricts US nuclear vendors from manufacturing equipment or performing nuclear design work in India.
  • This limitation hinders India’s aspiration to participate in the manufacturing value chain and co-produce nuclear components for joint projects.
• India’s Civil Liability for Nuclear Damage Act, 2010:
  • The Act holds suppliers liable for damages in case of a nuclear accident, deterring foreign vendors like GE-Hitachi, Westinghouse, and Orano from investing in India’s nuclear sector.
  • Concerns about future liability remain a significant hurdle for international players.

Indo-US Civil Nuclear Collaboration: Opportunities

• The Role of iCET in Strengthening Collaboration
  • The US-India Initiative on Critical and Emerging Technology (iCET) aims to address these barriers by fostering innovation and enabling joint manufacturing of nuclear components.
  • A breakthrough under iCET could facilitate deployment of American atomic reactors in India and enhance mutual cooperation.
• India’s Push for Small Modular Reactors (SMRs)
  • India is positioning itself as a manufacturing hub for nuclear reactors, particularly SMRs with capacities between 30 MWe and 300 MWe.
  • SMRs are cost-effective and scalable, making them attractive for global markets, especially in the Global South.
  • China, however, is actively working to dominate the SMR industry, posing stiff competition to India and the US.
• Collaboration in Light Water Reactors (LWRs)
  • India could gain access to advanced LWR technology, addressing its technological constraints.
  • The US could leverage India’s cost-efficient manufacturing ecosystem to offset its high labour costs and protectionist policies.
  • Collaboration could strengthen both nations’ ability to compete with China in the global nuclear reactor market.

US eases curbs to push nuclear deal – Key Highlights

• Challenges in Bilateral Relations
  • Sullivan acknowledged challenges in trade, human rights, and rule of law but emphasized long-term strategic alignment between the two nations.
• Reducing Dependency on China
  • Sullivan criticized China’s “predatory industrial strategies” in sectors like chip manufacturing and clean energy.
  • US companies, including Apple, are diversifying supply chains and expanding into India, with over 25% of iPhones expected to be made in India soon.
  • Sullivan stressed the importance of India-US collaboration to safeguard critical supply chains and technologies.
• Ensuring Dual-Use Technologies’ Security
  • Sullivan highlighted the need to prevent advanced technologies from falling into the wrong hands, referencing Russia and its S-400 air defence system.
  • He underscored India-US cooperation for peace and stability in the Indo-Pacific region.