Centre set to amend the Atomic Energy and Nuclear Liability laws

Moves are apace to amend the Atomic Energy Act 1962 and the Civil Liability for Nuclear Damage Act (CLNDA) to give the private sector a bigger role in nuclear energy commerce.

 

However, many wonder how deep and wide the reforms could be in a sector that has been the zealously guarded monopoly of the government since 1958.

 

The Union Budget 2025-26 had hinted at it. But External Affairs Minister S Jaishankar was forthright when he said last week that extensive changes in the Civil Liability for Nuclear Damage Act and the Atomic Energy Act 1962 were on the cards.

 

 

“There is a need to re-look at the liability law because the current law has not instilled confidence in the international nuclear industry for nuclear projects to take place in the country. That’s a fact of life,” he said at the Global Technology Summit (GTS) hosted by Carnegie Endowment for International Peace (CEIP) India on 11 April. It needs to be changed, he said, because “What’s the good of having a great initiative if it doesn’t deliver the goods on the ground?”

 

“What started off in 2005 as the opening of the US-India pathway for civil nuclear energy…if it did not produce the results we expected, we should have the honesty to ask ourselves: ‘what needs to be done differently’. This government has the courage to ask that question” he said.

 

He added, “The second issue which is autonomous of that is: when you look generally at the global nuclear industry, there is a role for the private sector. The state has certain designated responsibilities: it is regulator, it is a licensor; it deals with safety, security, safeguards…But we should ask ourselves if we should not be opening it up to the private sector and anecdotally it seems to have already evoked a strong expression of interest from the private sector…They are two independent issues. But on both, the government has taken a view and is prepared to move forward.”

 

Consultations have begun. Committees have been constituted with members from the Department of Atomic Energy, the Atomic Energy Regulatory Board, NITI Aayog, Ministry of External Affairs and the Ministry of Law and Justice to discuss amendments to the Atomic Energy Act and the CLNDA to allow private companies to participate in building and commissioning future nuclear reactors, Union Minister of state in the PMO, Jitendra Singh, said in the Lok Sabha on April 2. However, he has no timeline for legislation to be brought to Parliament.

 

Former Foreign Secretary and Prime Minister’s Special Envoy on the Indo-US Civil Nuclear Agreement, Shyam Saran says that while it is early days yet to reach any conclusion on the changes in the Atomic Energy Act, “one key demand of the private sector is that the regulatory board should be completely divorced from the Department of Atomic Energy”. He added: “At the moment the Atomic Energy regulatory Board (AERB) is very closely linked to the Department of Atomic Energy (DaE). The idea was that the AERB should be independent of the DaE and it should include outside experts.” He said it is “equally apparent” that the DaE does not want to relinquish regulatory control.

 

That this issue will pose creative tension in the days to come was evident from statements by Anil Kakodkar, former chairman Atomic Energy Commission. Kakodkar told science journalist Pallava Bagla in an interview soon after the Budget announcements that while nuclear energy is inevitable to achieve ‘viksit Bharat’ “kneejerk amendments to India’s nuclear laws should be avoided.” He also pointed out that 100 Gw of nuclear energy by 2047 will require large quantities of uranium for which India will either have to rely on thorium or reprocess spent uranium. There is the added challenge of handling waste and the responsibility of decommissioning plants once they reach the end of their lifecycle.

 

However, it is the governance aspect of civil nuclear energy that is causing participants as well as experts in the sector some concern. Business Standard spoke to a range of industry actors on condition of anonymity. While some said they were interested in setting up Small Modular Reactors (SMRs) because they saw nuclear energy in India, with its burgeoning demand for powering AI and data centres, as a new business opportunity, others felt anyone investing in the sector should be conscious of governance hurdles, including transfer of technology issues, the need for capital and pricing issues.

 

Vinayak Dalmia is the managing director (MD) and co-founder of Bharat Semi, one India’s promising new semiconductor fabrication units. On X, he said: “If a nation doesn’t invest in its private sector to build critical tech, it can’t expect others to hand crown jewels on a platter. They will happily sell platforms/systems. But the core will be carefully guarded. India has begun course correction. Incentivise the private sector as partners in national security.”

 

Some industry participants said the involvement of the private sector pre-supposes pricing. NITI Ayog vice-chairman Suman Bery has suggested that like all other sources of power, all aspects of nuclear energy, including pricing. should be left to the Ministry of Power.

 

On changes in the CLNDA, too, many felt that the current law which exposes suppliers to unlimited liability in case of accidents is a deterrent for investors. They suggest that the right of the operator to receive compensation from the supplier in case of an accident should be capped at the value of the contract. There are some indications that amendments to the CLNDA may be placed in Parliament as early as the monsoon session: the BJP’s firm partner in this will be the Telugu Desam Party (TDP) which is hoping atomic power plants - for which the government-owned Nuclear Power Corporation of India Limited (NPCIL) acquired around 2100 acres of land in the coastal Kovvada village of Srikakulam district in Andhra Pradesh as far back as 2012 – will become a reality. Discussions with Westinghouse Electric Company which was to construct the plants ran aground on liability issues.