Rethinking India’s Nuclear Liability Laws: A Critical Step Toward Energy Security and Technological Sovereignty

On the sidelines of India's ambitious energy security roadmap aiming to increase nuclear energy capacity from 8 GW to 100 GW by 2047, discussions are underway to amend the Civil Liability for Nuclear Damage Act (CLNDA), 2010. These proposed changes are aimed at enabling greater private and foreign investment in India’s nuclear sector. In the backdrop of World Environment Day 2025 and India’s decarbonisation commitments under the Paris Agreement, nuclear power remains a key pillar for clean base-load electricity. Yet, legacy liability laws continue to hinder the full realisation of this vision.

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Table of Contents:

1. Introduction: India’s Nuclear Energy Dilemma

2. Understanding the CLNDA and Current Challenges

3. Historical and Political Context of Nuclear Law in India

4. Why Reform is Urgent: Economic, Technological & Climate Imperatives

5. Global Comparisons: How Other Countries Attract Private Investment

6. Key Arguments For and Against Amending the CLNDA

7. Strategic Vision: Small Modular Reactors (SMRs) and Tech Transfer

8. Way Forward: A Balanced, India-Centric Legal Framework

9. Conclusion: Balancing Sovereignty, Safety, and Self-Reliance

1. Introduction: India’s Nuclear Energy Dilemma:

India’s quest for clean and reliable energy requires an exponential increase in nuclear capacity. Despite having 22 operational nuclear reactors and additional units under construction, India's nuclear output remains below 3% of the total electricity mix. Ambitions to scale this up are thwarted by regulatory and financial bottlenecks foremost among them being the strict liability regime under the CLNDA 2010.

Amending these laws is not about compromising on safety, but about creating a pragmatic and enabling environment for nuclear growth in line with energy security, Make in India, and climate commitments.

2. Understanding the CLNDA and Current Challenges:

The Civil Liability for Nuclear Damage Act (2010) was enacted in the aftermath of the Bhopal Gas Tragedy to ensure stringent liability for nuclear operators and suppliers. It holds suppliers liable even after transfer of components, diverging from global norms such as:

• Vienna Convention on Civil Liability for Nuclear Damage

• Paris Convention on Third Party Liability in the Field of Nuclear Energy

Key challenges posed by CLNDA include:

• Foreign vendors (e.g., GE, Toshiba-Westinghouse) refusing to enter Indian markets

• Supply chain disruptions due to fear of litigation

• Deterrence of public-private partnerships

Even Russia’s Rosatom refused to proceed with further cooperation without an indemnity mechanism, despite building Kudankulam units.

3. Historical and Political Context of Nuclear Law in India:

India’s nuclear journey has been shaped by a careful balance between national sovereignty, non-alignment, and self-reliance. The Indo-US Nuclear Deal (2008) marked a turning point, promising greater international integration. However, political concerns post-Bhopal led to the creation of a uniquely stringent liability regime.

While well-intentioned, CLNDA created an environment of legal uncertainty. The Atomic Energy Act, 1962, centralises nuclear development under government control. The lack of synergy between these two acts has resulted in administrative confusion and missed opportunities.

4. Why Reform is Urgent: Economic, Technological & Climate Imperatives:

India aims to triple its nuclear energy by 2032 and reach 100 GW by 2047. This requires not just domestic capacity but access to international capital and technology.

Urgent drivers of reform include:

• High CAPEX: Indigenous reactors cost ₹15,000–₹20,000 crore each. Foreign investment can reduce this burden.

• Carbon Neutrality: Nuclear provides base-load low-carbon power unlike solar/wind.

• SMR Opportunity: Small Modular Reactors (SMRs) can be game-changers but need vendor confidence.

• Energy Security: Reduced dependence on imported coal and LNG.

India’s last budget earmarked funds for small modular reactor development, but legal reforms must follow to realise their deployment.

5. Global Comparisons: How Other Countries Attract Private Investment:

India’s supplier liability clause is an anomaly and thus a deterrent in the global nuclear ecosystem.

6. Key Arguments For and Against Amending the CLNDA:

Pro-Amendment View:

• Unlocks foreign direct investment in nuclear

• Enables tech transfer (e.g., SMRs, Gen-IV reactors)

• Builds confidence in private vendors

• Aligns with global legal standards

Concerns and Cautions:

• Risk of diluted accountability in case of nuclear accidents

• Need for strong regulatory autonomy (AERB reform)

• Victim compensation must remain robust and uncapped

A middle path could involve a sovereign insurance pool funded by the government, similar to Price-Anderson.

7. Strategic Vision: Small Modular Reactors (SMRs) and Tech Transfer:

SMRs offer smaller, safer, factory-built alternatives to large reactors. Countries like Canada, USA, and China are rapidly investing in SMRs.

India must align liability laws to:

• Allow private vendors to participate in SMR development

• Leverage public-sector strengths (NPCIL) for deployment

• Encourage Make-in-India for global export of SMR components

Without reform, India may miss the global nuclear renaissance driven by SMRs.

8. Way Forward: A Balanced, India-Centric Legal Framework

1. Amend CLNDA to protect supplier interest without compromising victim rights.

2. Establish a Sovereign Insurance Fund similar to the U.S. model.

3. Synchronise CLNDA with AEA 1962 to avoid legal contradictions.

4. Strengthen AERB into an autonomous, independent nuclear regulator.

5. Engage with international frameworks (Vienna/Paris Conventions) to harmonise liability norms.

6. Promote multilateral tech partnerships to build indigenous capacity.

9. Conclusion: Balancing Sovereignty, Safety, and Self-Reliance

India’s nuclear energy future hinges on finding the right balance between attracting global participation and safeguarding public interest. A reformed liability framework will not only unlock investments and technologies but also catalyse the Atmanirbhar Bharat vision.

In a world racing towards clean energy and strategic technological dominance, India must act decisively to reform its nuclear liability regime preserving its sovereignty while enhancing sustainability, self-reliance, and scientific leadership.