Nuclear Responsibility in India: Overview of Legal Responsibilities in the Indian Nuclear Sector
In an effort to strengthen the nuclear regulatory framework and attract foreign investment, the Indian government is proposing several reforms. The proposed changes aim to balance victim compensation, supplier responsibility, and a favourable investment climate, transitioning from a rigid liability system that has deterred foreign technology providers.
One of the key reforms is the enactment of the Nuclear Safety Regulatory Authority Bill, which would grant the Atomic Energy Regulatory Board full autonomy and parliamentary oversight, thereby strengthening the regulator.
The Indian Civil Liability for Nuclear Damage Act (CLNDA), 2010, has been a point of contention for foreign technology providers due to the unusual liability risks it places on them. Unlike many countries where only the plant operator is liable for nuclear damage, India's law allows the operator to seek recourse against suppliers if a nuclear incident results from a supplier’s defective equipment or actions. This has created considerable legal uncertainty and exposure for foreign suppliers, making them wary of entering India’s nuclear market.
To address these concerns, the government is considering amending the CLNDA to better align with international standards such as the Convention on Supplementary Compensation for Nuclear Damage (CSC). Proposed changes include introducing a capped supplier liability, reducing unlimited exposure, and defining clearer and fairer rules of recourse against suppliers.
Another proposed solution is the establishment of a nuclear liability fund supported by operator contributions indexed to power generated. This financial buffer beyond capped supplier liabilities would reduce risks for suppliers.
The government also plans to open up nuclear power generation to private Indian and foreign investors, with clearer, transparent liability frameworks and minority foreign equity participation to boost capital inflow and technology transfer. Additionally, efforts are being made to promote technology transfer and domestic capacity building by balancing protection for suppliers with incentives for sharing advanced technologies like Small Modular Reactors (SMRs), preparing India’s own manufacturing capabilities to support expansion in nuclear energy.
These steps are aimed at creating legal certainty and attracting foreign investment, transitioning from a liability system that discourages foreign technology providers to one that encourages nuclear sector growth while maintaining safety and accountability.
The Indian Nuclear Insurance Pool (INIP) has been operational since 2015, with NPCIL premiums subsidized for the first five years. To scale the INIP, it is proposed to raise its capacity to ₹6,000 crore and allow foreign reinsurers under the IRDA sandbox, spreading risk and narrowing premiums.
India aims to increase its nuclear capacity from 8.8 GW to 100 GW by 2047, with a projected 6.5% CAGR electricity demand to 2040. The 9,900 MW (six-unit) European Pressurized Reactor site at Jaitapur, Maharashtra, remains stalled due to suppliers seeking certainty on liability. India also plans to invest ₹20,000 crore in SMR R&D.
References:
- Nuclear Power Corporation of India Limited
- Ministry of New and Renewable Energy
- Ministry of External Affairs
- Atomic Energy Regulatory Board
- International Atomic Energy Agency
- Organization for Economic Co-operation and Development
- Convention on Supplementary Compensation for Nuclear Damage
- Civil Liability for Nuclear Damage Act, 2010
- The Indian government's proposed reforms in the nuclear industry aim to transform the current liability system, which has been a deterrent for foreign technology providers, into one that encourages growth in the nuclear sector while maintaining safety and accountability.
- To address the legal uncertainty and exposure faced by foreign suppliers under the Indian Civil Liability for Nuclear Damage Act (CLNDA), the government is considering amending the Act to better align with international standards like the Convention on Supplementary Compensation for Nuclear Damage (CSC).
- Another strategy to attract foreign investment in the nuclear sector is the establishment of a nuclear liability fund, which would be supported by operator contributions and aim to reduce risks for suppliers beyond capped liability.
- As part of efforts to promote technology transfer and domestic capacity building, the government plans to balance protection for suppliers with incentives for sharing advanced technologies like Small Modular Reactors (SMRs).
- In line with its goal to increase nuclear capacity to 100 GW by 2047, the Indian government is making policy-and-legislation changes focused on creating legal certainty, attracting foreign investment, and fostering a favourable environment for the nuclear energy industry.
