Buget 2025: Govt proposes to open up nuclear sector ahead of PM's US visit

India on Saturday proposed to amend its nuclear liability law to boost foreign and private investments in the much-guarded sector, ahead of Prime Minister Narendra Modi's US visit.

The announcement was part of Indian Finance Minister Nirmala Sitharaman's budget on Saturday.

Strict liabilities under India's Civil Liability for Nuclear Damage Act, 2010, have hampered implementation of the India-US nuclear deal that envisaged participation of US power plant makers such as General Electric and Westinghouse. 

The White House last week said that the plan for Modi's US visit was discussed when he called US President Donald Trump.

"For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up," Sitharaman said in her budget speech, without giving more details.

The Atomic Energy Act of 1962 bars private investments in India's nuclear power plants.

"This is definitely a positive in terms of meeting our climate change goals," said Vikram V, Vice President, Co-Group Head - Corporate Ratings, ICRA Ltd.

"However, clarity would be required on the timelines for amending the Atomic Energy Act including the civil liability aspect as well as the overall tariff and policy framework for awarding these projects to the private sector," he said.

Development of at least 100 gigawatts of nuclear energy by 2047 is essential for India's energy transition efforts, minister Sitharaman said.

Adding 100 GW of nuclear capacity over the next 20 years is "doable and not very ambitious," said Arun Kumar, an energy expert and a professor at the Indian Institute of Technology, Roorkee.

Unlike conventional nuclear plants, small reactors can be installed in factories or plants from which they can draw power, he said.

India, which currently has about 8 gigawatt of nuclear capacity, aims to increase it to 20 GW by 2032.

Sitharaman also proposed to set up a Nuclear Energy Mission with an outlay of 200 billion rupees ($2.31 billion) and operate at least five indigenously developed small module nuclear reactors by 2033.

India, which has pledged to achieve a net zero carbon emission target by 2070, last year asked the states that are away from coal resources to consider setting up nuclear-based power plants.

Last February, India had proposed to partner with private players to develop small nuclear reactors to boost production of electricity from sources that don't produce carbon dioxide emissions.