It’s been nearly 20 years since India and the USA introduced the launch of a civil nuclear cooperation initiative. That laid the framework for the epochal India-U.S. nuclear deal, a watershed second within the bilateral relations between the 2 nations. The deal ended India’s decades-long nuclear isolation, permitting it to renew civil nuclear cooperation whereas implicitly being acknowledged as a accountable nuclear-weapons state exterior the Nuclear Nonproliferation Treaty (NPT) – a giant shift in U.S. coverage that drew sharp criticism for undermining long-standing nonproliferation norms.
This settlement is now again within the highlight after many misplaced years of unrealized potential. A United States agency, Holtec Worldwide, has been greenlit by the U.S. Division of Power to collectively construct and design nuclear reactors in India. This can be a vital breakthrough, since below the deal, U.S. companies may solely export nuclear reactors to India and never interact in any design or manufacturing course of.
This necessary regulatory clearance for Holtec Worldwide comes in opposition to the backdrop of latest high-level conferences between Indian Prime Minister Narendra Modi and U.S. President Donald Trump, throughout the former’s go to to the USA in early 2025. In a tacit acknowledgement of the shortage of progress up to now, either side expressed their renewed dedication to the total implementation of the settlement. As well as, either side welcomed New Delhi’s choice to take up amendments to its Atomic Power Act of 1962 and the Civil Legal responsibility for Nuclear Harm Act (CLNDA) of 2010 as a part of India’s broader efforts to advance its new Nuclear Energy Mission, introduced as a part of the nation’s 2025-2026 Union Funds.
Twenty years on, whereas it’s clear that the India-U.S. nuclear deal has not weakened the worldwide nonproliferation regime as claimed by critics, the total potential and promise of it’s but to be realized. Most importantly, the deal didn’t result in the set-up of U.S.-designed reactors in India. Among the many many hurdles, a key difficulty has been India’s nuclear legal responsibility legislation. Amending the long-controversial CLNDA, the nuclear legal responsibility legislation of India, is a welcome transfer that might be the important thing to totally reviving the deal by aligning it with worldwide norms and restoring the arrogance of U.S. suppliers coming into the Indian nuclear power market.
The Nuclear Legal responsibility Backdrop
If international suppliers, notably personal cooperatives, have been to enter the Indian nuclear power sector, India wanted a transparent framework for coping with legal responsibility points within the occasion of a nuclear accident. Till then, it was understood that every one legal responsibility points have been the accountability of the central authorities, because it owned and operated all nuclear amenities. In signing the nuclear take care of the USA, India agreed to first signal and ratify the Convention on Supplementary Compensation (CSC), which required the institution of a transparent home legal responsibility framework. As well as, since India will not be a celebration to the NPT or any of the worldwide nuclear legal responsibility conventions, the federal government felt it essential to draft laws to incentivize each home and international suppliers to take part within the nation’s nuclear energy growth.
The Indian authorities passed the CLNDA in September 2010. Nonetheless, this act went past the worldwide requirements comparable to these set by the CSC, which requires all legal responsibility burdens to be positioned solely on the facility plant operator (not the provider) to offer compensation to victims in case of a nuclear accident. The CLNDA additionally holds suppliers liable. What this implies is that operators have the best to hunt authorized recourse in opposition to its suppliers in case of a nuclear accident on grounds of defective or faulty expertise or elements.
It was not the unique intention of the Manmohan Singh authorities on the time to enact such a novel legislation. The Singh authorities had initially sought laws consistent with the mentioned worldwide requirements. On Could 7, 2010, the invoice was introduced within the Lok Sabha, the decrease home of the Indian Parliament. Coincidentally, on the similar time, the Supreme Courtroom delivered a call on the lethal 1984 Bhopal fuel tragedy. This choice introduced again painful reminiscences for the general public, and the truth that there was no regulatory framework in place to carry the U.S. firm Union Carbide accountable was uncomfortably obtrusive.
The timing of the choice allowed the opposition, the Bharatiya Janata Occasion (BJP), to press for extra accountability for suppliers. Arun Jaitley, chief of the BJP opposition, stated in Parliament:
So long as these vegetation are to be operated… both by the federal government or by the general public sector, why should the federal government of India and the general public sector take the legal responsibility if the error is dedicated by some third celebration? The tools could also be faulty; the tools might have a latent or patent defect…that’s the reason, it compelled me to say that we flip our legislation the other way up.
The draft invoice was hotly debated within the Parliament on a number of issues comparable to legal responsibility thresholds of the operator, most legal responsibility, and exemption of suppliers from legal responsibility expenses. In the long run, Part 17 of the Act supplied the operator the “proper to recourse” from suppliers. The Bhopal fuel tragedy was the primary motive for the inclusion of Part 17(b). It says:
17. Operator’s proper of recourse. – The operator of the nuclear set up, after paying the compensation for nuclear injury in accordance with part 6, shall have a proper of recourse the place –
…
(b) the nuclear incident has resulted as a consequence of an act of provider or his worker, which incorporates provide of kit or materials with patent or latent defects or sub-standard companies;
For the reason that Singh authorities lacked an absolute majority within the Parliament, the invoice was topic to many revisions on account of the BJP. The ensuing legislation now accepted the provider’s legal responsibility: “Thus, Part 17(b) of the invoice launched the idea of provider legal responsibility, a ‘watershed second in worldwide nuclear legal responsibility jurisprudence,’ given the present norm of assigning nuclear legal responsibility ‘completely to operators.’”
After establishing its home legal responsibility framework, India signed the CSC in October 2010 and ratified it in February 2016.
Aftermath
The ensuing legislation drew widespread criticism from international suppliers in addition to supporters of India’s nuclear energy growth. It raised doubts about how India would safe the superior reactors and elements that have been initially anticipated to be the early outcomes of the India-U.S. nuclear deal.
U.S. suppliers like GE Hitachi and Westinghouse have been hesitant to interact in nuclear commerce in India for concern of legal responsibility claims and didn’t wish to undertake any threat. They argued that such a legislation set a unsuitable precedent by permitting the operator to sue the provider “for absolute, limitless, and non-delegable legal responsibility that would stop them from taking insurance coverage cowl and bankrupt them in case of a nuclear accident.” It was not simply personal U.S. suppliers who opposed the act, but additionally suppliers from France and Russia as properly.
To ameliorate these considerations, the Indian authorities created the Indian Nuclear Insurance Pool (INIP) “with a capability of 1500 crore [15 billion] rupees to offer insurance coverage to cowl the legal responsibility as prescribed below the CLNDA 2010.” In 2015, the federal government tried to offer a workaround to the act by claiming that the provider’s legal responsibility wouldn’t be a compulsory a part of the contracts signed with international suppliers. Whereas the Russian state-owned Rosatom has accepted these assurances on account of protections from their authorities, U.S. suppliers don’t get pleasure from the identical immunity and have nonetheless been hesitant.
Transferring Ahead
The latest approval for Holtec Worldwide to construct its flagship small modular reactors in India is a long-awaited breakthrough – an early however vital signal that the unique promise of the deal is lastly starting to be realized. The online readout saying the authorization additionally showcases this optimism:
We perceive that the GOI is actively engaged on laws to allow personal sector funding within the nuclear sector and to align the suppliers’ monetary publicity with world norms… With the mandatory laws handed by Lok Sabha, we consider that the nuclear renaissance, now sweeping the world, will arrive in that huge land remodeling its clear power technology panorama.
The Modi authorities presently enjoys a majority in each homes of the Parliament. Persevering with the momentum created by the federal government’s Union Funds speech, the modification course of has already begun – the Division of Atomic Power has arrange committees to debate and suggest amendments to the Atomic Power Act and the CLNDA. Nonetheless, the opposition has a comparatively stronger presence in comparison with earlier phrases and opposes the modification. The opposition accuses the BJP authorities of taking a “U-turn” from its earlier stance. Regardless of the unlucky probability of a repeat of debates on the identical points mentioned nearly 15 years in the past, it appears unlikely that the modification won’t be adopted.
There’s extra to sit up for quickly. In December 2024, there have been some intermittent discussions between the Indian authorities and Westinghouse to finalize the development of six AP1000 reactors for the Kovvada nuclear energy plant within the Indian state of Andhra Pradesh. This curiosity in collaboration traces its origins again to the nuclear deal itself however has been gradual in materializing, notably on account of considerations on India’s legal responsibility legal guidelines. Hopefully, the proposed modification can present the mandatory impetus to fast-track this dialogue.
Equally, in February 2025, India and France signed a declaration of intent to associate on superior and small modular reactors. On India’s facet, “it will likely be necessary to speak transparently with the personal sector on the progress of proposed modifications and the regulatory course of in order that they will higher plan for implementation and potential obstacles.” This can set the stage for extra suppliers to win contracts in India’s nuclear sector and allay earlier fears about legal responsibility.
Originally conceived within the late Nineteen Forties and Fifties to financially shield and encourage provider participation within the nascent nuclear sector, operator legal responsibility is now firmly established as a world norm. As India seeks to multiply its nuclear energy output from 8,180 MWe to 100 GWe by 2047, the total implementation of the India-U.S. nuclear deal has by no means been extra well timed or essential. Fifteen years in the past, it was the BJP that opposed the CLNDA in its nascent phases, and 10 years in the past it mentioned there was no proposal to amend the legislation. Now, one can solely hope that the change in stance displays the federal government’s full dedication to increasing India’s nuclear power program for a cleaner and a extra sustainable future.
