Nuke suppliers' liability: Government panel calls for clear limits

In a bid to achieve India’s target of 100 gigawatt (Gw) of nuclear energy capacity by 2047, an expert committee set up by the power ministry has recommended capping a supplier’s liability at the contract value or the operator’s liability, whichever is lower.

 

The panel also highlighted the need for a precise definition of “supplier” in nuclear energy projects, to clarify that vendors providing trivial items would not fall under this definition.

 

These recommendations are part of the panel’s report, made public by the Central Electricity Authority (CEA) under the power ministry. Titled ‘Road map for Achieving the Goal of 100 Gw of Nuclear Capacity by 2047’, the report seeks to encourage greater private-sector participation in India’s nuclear sector.

 

The panel observed that both domestic and foreign suppliers of nuclear equipment have been hesitant to engage in India due to concerns about liability for damages. Internationally, liability typically rests solely with the operator of a nuclear installation.

 

It also underscored the absence of a cap on supplier liability under the Civil Liability for Nuclear Damages (CLND) Act, 2010. Suppliers have raised concerns about unlimited liability, observing that compensation for them is not predetermined, unlike the fixed liability set for operators.

 

The report recommended that operators should face no civil liability under any law other than that under the CLND Act, effectively shielding them from criminal liability for nuclear damages.

 

Since nuclear energy is considered a clean fuel source, the CEA has recommended reducing the goods and services tax on nuclear islands from 18 per cent to 12 per cent (this recommendation came in June, before the GST rate rationalisation). This would lower project hard costs by around 3 per cent and reduce tariffs by roughly 20 paise per kilowatt-hour.

 

To boost private participation, the committee suggested allowing any company registered under the Companies Act, 2013, to apply for a licence to produce and use atomic energy. Currently, only central public-sector undertakings and their joint ventures are permitted to construct and operate nuclear plants and handle nuclear substances.

 

“The private sector has abundant capital and inherent efficiency in the timely construction and adoption of innovation. If allowed, private players may either acquire appropriate technology or collaborate with the public sector, specifically the Nuclear Power Corporation of India, which has proven capabilities in technology development and operation, particularly in indigenous pressurised heavy water reactors,” the report said.

 

The central government has announced several initiatives to expand nuclear energy capacity, currently at 8.8 Gw. In Budget 2025-26, it unveiled the Nuclear Energy Mission, with an outlay of ₹20,000 crore for research and development of small modular reactors. 

Key recommendations

• A clear definition of a supplier in a nuclear energy project
• Operators should be subjected to no civil liability under any other law in addition to that payable for “Nuclear damage” under CLND Act
• Any company defined in the Companies Act, 2013, should be eligible for a licence for production and use of atomic energy