Nuclear Energy Reforms To Accelerate Private Sector Entry

The government is also expected to put a cap on the liability of equipment suppliers and private operators, with a clear time limit. The liabilities are fixed, based on the value of the contracts. Capping the liabilities is expected to bring Indian laws in sync with global norms.

Officials are keen that laws be changed to allow this in the coming session of Parliament. "We have almost finalised the changes and you will see forward movement soon," said officials who were involved in the drafting.

Both the Atomic Energy Act (AEA) of 1962 and the Civil Liability for Nuclear Damage Act (CLNDA) of 2010 are about to be amended to effect this, and make it easier for foreign nuclear energy giants to set up plants here. Ending the near exclusive presence of PSUs in the sector is expected to turbocharge India’s journey towards 100 GW of nuclear power by 2047.

Nuclear Fusion Of Private Players

Atomic energy, along with some major areas of the defence sector, is one of the last few bastions in India, where government-owned behemoths like the Nuclear Power Corporation of India Limited (NPCIL) remain the biggest player.

The monopoly of state operators in nuclear power till now has been a result of the Atomic Energy Act (AEA) of 1962 and the Civil Liability for Nuclear Damage Act (CLNDA) of 2010.

While NPCIL operated reactors for atomic energy, private and foreign players opted out, mainly due to the unlimited liability clause in the existing acts in the event of a nuclear disaster. The only exception was the Russians, who were willing to accept the liability act while supplying nuclear plants.

This had put off players like the USA's Westinghouse and France's Areva. By new amendments to both the AEA and CLNDA, the private and foreign firms will now be allowed to build, operate, and own stakes in nuclear power plants.

A Reform Due For A While

Nuclear energy is an integral part of India’s green transition. India’s ambitious target is to reach 100 GW of nuclear capacity by 2047, but that would require an almost twelvefold jump from the current capacity of 8.7 GW.

"These reforms, therefore, were long due. With the country striving to become net-zero by 2070, atomic energy is seen as a viable yet clean alternative. Other non-fossil options like solar and wind sectors face various supply constraints, including critical minerals," top officials said.

After the Fukushima disaster, nuclear energy went out of fashion, but recently made a comeback as a buffer option towards a non-fossil and green energy-based transition.

However, growing realisations that the public sector alone cannot deliver the 100 GW target by 2047 are paving the way for current reforms. There is a need to bridge the gap between reality and ambition. Access to finance, technical know-how, and global collaborations are needed and can be effectively delivered by the private players.

The required policy push has been evident for quite some time. The finance minister allocated Rs 20,000 crore in the 2025-26 budget for a Nuclear Energy Mission. Five indigenously developed small modular reactors (SMRs) will be online by 2033. With the current reform in the pipeline, private investment and subsequent innovations are also likely to bolster India’s atomic energy journey.

The initial assessment is that public-private partnerships will take care of about half of the 100 GW target. Necessary incentives, viability gap funding, and sovereign guarantees are expected to follow the rules change.

Taking A Cue From Space Sector Reforms

The government is keen to replicate the success of space sector reforms in the atomic energy sector. A string of reforms has done wonders for the space sector in India. A single-window, autonomous government agency, named the Indian National Space Promotion and Authorisation Centre (IN-SPACe), was created under India’s Department of Space in June 2020.

IN-SPACe catalysed private sector participation in India’s space activities, marking a shift from a government-dominated model to a collaborative, innovation-driven ecosystem

'The planned regulatory reform in atomic energy is likely to unleash a new era of entrepreneurial energy, indigenous technology, and global competitiveness. And we feel these changes will really catalyse growth," officials said.

The big foreign nuclear energy players, particularly those from the USA, France, and Russia, will be watching Indian reform developments. The 2010 liability law, which was supposed to assign accountability in case of disasters like the 1984 Bhopal gas leak, kept them out of the game.

However, the new amendments may finally unlock the full potential of India’s landmark civil nuclear deals. The country may attract loads of foreign investment and subsequently establish itself as a global leader in clean and secure energy.