Understanding India's Nuclear Law Amendments

Proposed Amendments to India's Nuclear Laws

The Government of India is currently considering significant amendments to two crucial laws: the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) and the Atomic Energy Act, 1962.

Why Amend the Civil Liability for Nuclear Damage Act?

The CLNDA was enacted to ensure compensation for victims of nuclear accidents. However, a provision known as the “right of recourse” has made foreign suppliers hesitant to invest in India's nuclear sector.

Understanding the 'Right of Recourse'

According to Section 17 of the CLNDA, a nuclear plant operator, usually the nuclear power Corporation of India Limited (NPCIL), can seek compensation from suppliers under specific circumstances:

• Faulty equipment
• Nuclear accidents resulting from defective materials or services
• Supplier actions that violate legal norms

Proposed Changes to the CLNDA

• Limit the scope of the “right of recourse.”
• Clarify the conditions under which suppliers are held liable.
• Define the term “supplier” to eliminate ambiguity regarding equipment manufacturers versus sub-suppliers.
• Align Indian law with international standards, particularly the CSC (Convention on Supplementary Compensation for Nuclear Damage), facilitating greater global cooperation.

The Importance of these Changes

Foreign suppliers, including companies like Westinghouse (USA) and Framatome (France), are seeking clearer regulations. Presently, they are deterred from providing components due to concerns over liability. Reforming the law could potentially draw investment and advanced technologies into India's civil nuclear sector.

Amendments to the Atomic Energy Act, 1962

This amendment aims to permit private companies, including foreign entities, to establish and operate nuclear plants. Previously, this was restricted to state-owned enterprises like NPCIL and NTPC.

Objectives of the Second Amendment

• Encourage private sector involvement in nuclear power generation.
• Broaden the sector for increased investment, competition, and innovation.
• Assist India in achieving its clean energy objectives.

Global Context and Developments

In March 2025, the US Department of Energy authorized Holtec International to export small modular reactors (SMRs) to India. India aims to collaborate in the co-production of these reactors rather than merely importing them, necessitating clearer legal frameworks.

Timeline for Amendment Approval

While these amendments were initially slated for discussion during the monsoon session of Parliament, delays may push the review to the winter session due to ongoing legal and political deliberations.

Potential Benefits for India's Civil Nuclear Sector

• Elimination of legal uncertainties.
• Promotion of technology transfer.
• Attraction of investment from reliable partners.
• Assistance in developing a modern, safe, and sustainable energy infrastructure.

Frequently Asked Questions (FAQs)

Q1. What are the key changes proposed in the CLNDA?
Answer: The key changes in the CLNDA include limiting the “right of recourse,” clarifying supplier liabilities, and defining “supplier” roles to enhance investment confidence in India's nuclear sector.

Q2. How does the amendment to the Atomic Energy Act affect private companies?
Answer: The amendment allows private and foreign companies to build and operate nuclear plants, previously restricted to state-owned firms, thereby promoting competition and innovation.

Q3. Why is the 'right of recourse' a concern for foreign suppliers?
Answer: The 'right of recourse' allows operators to claim damages from suppliers, creating liability concerns that deter foreign investment in India's nuclear energy sector.

Q4. What international agreement is India aligning its nuclear laws with?
Answer: India is aligning its nuclear laws with the Convention on Supplementary Compensation for Nuclear Damage (CSC) to facilitate better global cooperation.

Q5. When are the amendments expected to be approved?
Answer: The amendments were initially targeted for the monsoon session of Parliament, but delays may push discussions to the winter session due to ongoing legal and political considerations.

UPSC Practice MCQs

Question 1: What does the 'right of recourse' in the CLNDA entail?
A) Compensation for nuclear accident victims
B) Operator's ability to claim damages from suppliers
C) Limiting foreign investment
D) Defining supplier roles
Correct Answer: B

Question 2: Which company was authorized by the US Department of Energy to export SMRs to India?
A) Framatome
B) Holtec International
C) Westinghouse
D) NPCIL
Correct Answer: B

Question 3: What is a primary goal of the amendments to the Atomic Energy Act?
A) Restrict state-owned enterprise operations
B) Encourage private sector participation
C) Limit technology transfer
D) Increase nuclear liability
Correct Answer: B