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This article explores how the Civil Liability for Nuclear Damage Act (CLNDA), 2010, has become a barrier to India’s clean energy transition. UPSC usually asks questions from this theme in a broad issue-based manner, such as linking nuclear energy with climate goals, energy security, and public safety-as seen in the 2018 GS3 question on whether India should expand its nuclear energy programme. Most aspirants falter by focusing only on technical or legal details and miss the wider implications, like how this law affects foreign investment, the private sector’s entry into nuclear energy, and India’s ability to meet its 100 GW target by 2047. This article helps overcome that problem by building conceptual clarity through clearly titled sub-sections. For instance, “Challenges in Amending Nuclear Laws” shows the political and ethical dilemmas involved, while “Why Is India Considering Amending Its Nuclear Laws?” connects legal reform to energy goals..
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India is looking to ease its liability laws to limit supplier liability and attract foreign investment for reviving nuclear energy projects and meeting clean energy goals.
UPSC frames broad, issue-based questions linking nuclear energy to climate goals, energy security, and public safety – like the 2018 GS3 question on expanding India’s nuclear programme. Most aspirants focus only on technical or legal specifics, missing deeper themes like foreign investment, private sector entry, and clean energy targets.
This article addresses that gap by offering conceptual clarity through well-structured sub-sections. It connects legal reform to strategic goals – for instance, “Challenges in Amending Nuclear Laws” discusses political and ethical hurdles, while “Why Is India Considering Amending Its Nuclear Laws?” ties the changes to India’s 100 GW nuclear energy target by 2047.
PYQ ANCHORING
GS 3: With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. [2018]
MICROTHEMES: Renewable Energy
India is considering easing Civil Liability for Nuclear Damage Act, 2010 (CLNDA 2010) to reduce accident-related penalties on suppliers, addressing foreign firms’ concerns over unlimited liability. The step aims to revive stalled nuclear projects and advance India’s clean energy targets.
About the Civil Liability for Nuclear Damage Act, 2010 (CLNDA)
The CLNDA is India’s law that deals with compensation and responsibility in case of a nuclear accident. It ensures that people affected by such accidents are compensated quickly and fairly.
- It is based on global rules like the Convention on Supplementary Compensation (CSC, 1997), made after the Chernobyl disaster. India joined this agreement in 2016.
- The law follows international principles from earlier nuclear safety agreements (Vienna, Paris, and Brussels Conventions).
Key Features:
- Strict Liability: The company running the nuclear plant is always responsible for any damage, even if it wasn’t their fault.
- Compensation Cap: The operator has to pay up to ₹1,500 crore.
- Government Support: If damages go beyond that, the Indian government steps in and pays up to around ₹2,100–₹2,300 crore.
Claims and Disputes:
- A special Nuclear Damage Claims Commission is set up to handle compensation claims and solve disputes.
Unique Point – Supplier Liability:
- Unlike other countries, India’s law holds suppliers (those who provide parts, materials, or services) also responsible.
- If a nuclear accident happens due to faulty equipment or poor-quality services, the plant operator can make the supplier pay—this is allowed under Section 17(b).
Key Concerns regarding CLNDA,2010
| Concern | Description | Examples |
| Supplier Liability and Legal Ambiguities | The inclusion of Section 17(b) allows operators to seek recourse against suppliers for defective equipment or wilful misconduct. This, along with Section 46, raises the possibility of multiple civil claims. | Raises apprehensions among suppliers (domestic and foreign) due to fear of unlimited or prolonged liability. |
| Insurance and Definition Gaps | Unclear insurance mechanisms and a broad, ambiguous definition of “nuclear damage” complicate liability coverage. | Results in limited availability of insurance and reluctance of suppliers to engage in the sector. |
| Deterrent to Foreign Investment | India’s liability framework diverges from international norms like the CSC, where liability rests solely with the operator. | Acts as a barrier to nuclear deals and collaborations, notably with countries such as the United States. |
| Impact on Nuclear Sector Growth | Investor uncertainty stemming from liability provisions has slowed project implementation and financing. | Projects like Jaitapur Nuclear Power Plant (9.6 GW) have seen delays, affecting energy security. |
| Challenges to Clean Energy Targets | Delayed nuclear expansion undermines India’s commitment to its 500 GW non-fossil fuel target by 2030. | With nuclear power contributing only ~3% to the total energy mix, decarbonization is significantly hampered. |
Need for Nuclear Liability Reforms
- Attract foreign nuclear suppliers
India’s Civil Liability for Nuclear Damage Act (CLNDA), 2010 holds suppliers liable for unlimited accident damages, discouraging companies like GE and Westinghouse. Amending the law to cap supplier liability would encourage their participation.
Example: Reuters reports a draft amendment to cap liability at contract value. Business Standard notes supplier reluctance due to existing rules. - Achieve ambitious nuclear targets
India aims to scale up nuclear power from ~8 GW to 100 GW by 2047 to meet energy demand and climate goals. This requires large investments and global partnerships, which current laws hinder.
Example: Budget 2024 set a 100 GW nuclear goal. India currently operates 24 reactors (~8,180 MW); aims for ~40 GW by 2035. - Encourage private sector investment
The Atomic Energy Act (1962) and CLNDA (2010) restrict private ownership of nuclear facilities. Amendments could allow firms like Reliance, Adani, or NTPC to build and operate reactors.
Example: Parliament (April 2025) formed committees to study changes. NTPC invited bids to indigenize 15 GW nuclear capacity. - Align liability rules with global norms
Internationally, liability for accidents usually rests with plant operators, not equipment suppliers. India plans to adopt this model by capping supplier liability and making operators primarily responsible.
Example: Deloitte India says a liability cap will ease supplier fears. Draft law proposes limiting supplier liability to contract value. - Balance reforms with safety concerns
The 2010 CLNDA was shaped by the Bhopal gas tragedy, emphasizing supplier accountability. Any changes must balance investment needs with public trust in safety and compensation mechanisms.
Example: Business Standard notes the law’s roots in Bhopal. Critics continue to invoke the tragedy when opposing liability dilution. - Address political and legislative hurdles
Amending nuclear laws requires parliamentary approval and faces political resistance. Opposition parties criticize the proposed reforms and cite past government positions against amendments.
Example: Budget 2024 announced planned reforms. Congress recalled the 2015 MEA statement opposing changes. Minister Jitendra Singh confirmed committees are reviewing with no set timeline. - Strengthen regulatory oversight
Greater private and foreign participation demands stricter safety regulations. India plans to enhance monitoring of nuclear fuel use, reactor design, and waste disposal through updated frameworks.
Example: Business Standard reports on a proposed new authority for nuclear fuel and waste. All reactor designs will require AERB approval.
| Types of Liability Term: What It Means Operator LiabilityThis means the company that runs the nuclear plant (like NPCIL in India) is fully responsible if something goes wrong—like a radiation leak or accident. Supplier LiabilityThis means the company that supplied the parts or technology (like Westinghouse or GE) can also be held legally responsible if their component caused the problem. Key Difference: Operator liability is the default model worldwide – only the operator (plant owner) pays compensation. Supplier liability, which India added in 2010 (CLNDA), says the operator can also sue the supplier if a defect in their equipment caused the accident. Why is this controversial? Foreign companies don’t want supplier liability. They fear being sued for billions if something goes wrong years later.India added it because of public concerns after the 1984 Bhopal gas disaster, where the supplier (Union Carbide) avoided full accountability. |
Evolution of Nuclear Liability Laws in India
| Time Period | Event / Development | Details and Impact |
| 1962 | Atomic Energy Act, 1962 enacted | Established the foundation for India’s nuclear energy program, regulating nuclear materials and facilities. Focus was on development and safety, but did not clearly define liability for nuclear accidents. The government held full control over nuclear activities. |
| 1998 | India conducts nuclear tests (Pokhran-II) | Boosted India’s nuclear program but increased global focus on nuclear safety and liability. Highlighted the need for clear liability rules as nuclear energy expanded. |
| 2008 | India-US Civil Nuclear Agreement | Opened doors for foreign nuclear technology and fuel imports, but liability concerns remained a sticking point. Foreign suppliers hesitated due to India’s unclear liability rules. |
| 2010 | Civil Liability for Nuclear Damage Act (CLNDA), 2010 enacted | India’s first dedicated nuclear liability law. Made the plant operator strictly liable for accidents, but controversially included clauses allowing operator to sue suppliers for defective equipment causing damage (supplier liability). This worried foreign companies. |
| 2013 | Supreme Court Judgment on Nuclear Liability | The SC upheld key provisions of the CLNDA, including supplier liability clauses, reinforcing the operator’s right to seek recourse against suppliers. The court stressed the importance of victim compensation but also confirmed government’s position on supplier liability. |
| 2014 | Political Opposition and Debate | The opposition and some industry voices demanded changes to reduce supplier liability to attract foreign investment. The government faced pressure balancing public safety concerns and industry interests. |
| 2015-2020 | Government reviews amendment proposals | To attract foreign companies like Westinghouse (US) and EDF (France), the government considered amending laws to align with international standards like the Convention on Supplementary Compensation (CSC). Discussions focused on limiting supplier liability to build confidence for technology transfer and investment. |
| 2022 | Rising push for private sector involvement | India set ambitious targets to increase nuclear power capacity to 100 GW by 2047. Legal reforms discussed to allow private companies to build and operate nuclear plants, requiring clarity and fair liability provisions to de-risk investments. |
| 2023 onwards | Ongoing legal and policy reforms | Draft amendments and policy frameworks aim to balance strict operator liability (to protect public safety) with limited supplier liability (to attract foreign and private investors). The Supreme Court continues to emphasize victim rights while acknowledging the need for a sustainable investment climate. |
Challenges in amending Nuclear Liability Laws
Amending nuclear laws in India – especially the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act (CLNDA), 2010 – faces several complex challenges across political, legal, public, and strategic domains. These include:
1. Political Sensitivity and Opposition Resistance
- Amendments to nuclear laws are politically contentious, especially those seen as diluting liability provisions.
- Opposition parties (like Congress and Left) often invoke the legacy of the 1984 Bhopal gas tragedy, accusing the government of compromising victim rights and accountability.
- Any shift perceived as favoring foreign suppliers may trigger public and parliamentary backlash.
2. Public Sentiment and Safety Concerns
- The CLNDA 2010 was enacted amid strong public demand for corporate accountability.
- Reducing supplier liability could be seen as prioritizing business interests over citizen safety and victims’ compensation.
- Civil society and activists continue to raise concerns about weakening safeguards.
3. Legal and Constitutional Complexity
- Changes to the liability regime may involve constitutional interpretation, especially related to Right to Life (Article 21) and environmental safety.
- Any amendment reducing accountability could face judicial review or Public Interest Litigations (PILs).
4. International Commitments vs. Domestic Law
- India must balance its commitments to international nuclear conventions (e.g. CSC – Convention on Supplementary Compensation) with its domestic liability framework.
- While global norms place liability primarily on the operator, India’s current law uniquely allows operator recourse against suppliers (Section 17(b) of CLNDA).
5. Multi-Ministry Coordination and Bureaucratic Delay
- Amendments require consensus among multiple agencies: Department of Atomic Energy (DAE), Ministry of External Affairs, AERB, NITI Aayog, Law Ministry, etc.
- Internal differences and risk-averse bureaucracy slow down the reform process.
- As of 2025, no fixed timeline exists for proposed amendments.
6. Strategic Autonomy and Technology Dependence
- While reforms may attract foreign suppliers and investments, critics argue this could increase dependence on U.S./Western tech firms.
- Strategic concerns include protecting India’s autonomy in nuclear fuel cycles, reactor design, and waste management.
7. Absence of a Strong Regulatory Framework
- Bringing in private and foreign players demands robust safety, monitoring, and liability enforcement mechanisms, which need to be developed alongside legal changes.
- Without strong regulation, trust in safety may erode—especially in the event of an incident.
Way Forward
1. Legislative Reforms
- Amend Section 17(b): Limit supplier liability to intentional wrongdoing or gross negligence, in line with global norms.
- Amend Atomic Energy Act: Allow private firms to participate, especially in Small Modular Reactors (SMRs).
2. Financial Safeguards
- Insurance Consortium: Create an international pool to cover supplier liability risks.
- Risk-Sharing Fund: Establish a domestic fund to reduce taxpayer burden and support accident compensation.
3. Diplomatic & Bilateral Solutions
- Sign IGAs: Partner with countries like the U.S., France, and Japan to clarify liability terms and set up dispute resolution.
- Revive Projects: Use diplomatic assurances to restart stalled projects like Jaitapur and Kovvada.
4. Strengthen Regulation & Safety
- Empower AERB: Ensure independent, strong oversight of safety and operations.
- Third-Party Audits: Mandate external safety checks for all reactors.
- Disaster Protocols: Fast-track nuclear emergency response systems to build public trust.
5. Investment Incentives
- Tax Breaks & Subsidies: Encourage private investment in nuclear energy.
- Low-Interest Loans/Grants: Offset high costs of insurance and safety compliance.
#BACK2BASICS: ATOMIC ENERGY REGULATION FRAMEWORK
A. ACTS AND RULES
| Name of Act/Rule | Purpose | Key Provisions/Notes |
| Atomic Energy Act, 1962 | Principal legislation for atomic energy regulation in India | Empowers Central Government for control and development of atomic energy.Regulates mining, production, and use of nuclear materials- Establishes plants and institutions.Authorizes licensing and prohibits unauthorized use |
| Civil Liability for Nuclear Damage Act, 2010 | Establishes liability for nuclear accidents | Operator’s liability capped at ₹1,500 crore.Right of recourse against suppliers (Section 17(b))Enables Nuclear Liability Fund.Aligns with CSC treaty |
| Environmental Protection Act, 1986 (relevant provisions) | Governs environmental safety of nuclear operations | – Mandates EIAs for nuclear facilities- Sets radiation and environmental safety standards |
| Radiation Protection Rules, 2004 (under Atomic Energy Act) | Regulates radiation exposure | – Licensing for medical/industrial radiation use- Safety measures and radiation monitoring requirements |
| Atomic Energy (Radiation Protection) Rules, 2004 | Ensures safe use and transport of radioactive materials | – Mandatory Radiological Safety Officers (RSOs)- Monitoring, reporting, and record-keeping obligations |
| Atomic Energy (Safe Disposal of Radioactive Waste) Rules, 1987 | Governs disposal of radioactive waste | – Approval from AERB required for disposal methods- Focus on health and environmental protection |
B. REGULATORY BODIES
| Name | Established | Functions |
| Department of Atomic Energy (DAE) | 1954 (under PMO) | – Develops policies for nuclear energy- Oversees research and development- Coordinates nuclear power programs |
| Atomic Energy Regulatory Board (AERB) | 1983 | – Independent regulator for radiation and nuclear safety- Issues licenses, guidelines, and safety inspections- Ensures compliance with radiation protection norms |
C. INTERNATIONAL COMMITMENTS
| Treaty/Agreement | India’s Position | Key Features |
| Nuclear Non-Proliferation Treaty (NPT) | Not a signatory | India maintains sovereign control over nuclear arsenal and civilian use |
| Convention on Nuclear Safety (CNS) | Signatory | Promotes safety of nuclear power plants through peer review and reporting |
| Convention on Supplementary Compensation for Nuclear Damage (CSC) | Signatory | Provides global legal framework for nuclear liability and compensation |
| IAEA Safeguards Agreement (as part of Indo-U.S. deal) | Signatory (2009) | Applies IAEA safeguards to civilian nuclear facilities for transparency and non-diversion |
Why Is India Considering Amending Its Nuclear Laws?
| Objective | Explanation | Examples |
|---|---|---|
| To Attract Private and Foreign Participation | The Civil Liability for Nuclear Damage Act (CLNDA), 2010 imposes strict liability on operators and allows right of recourse against suppliers. This discourages global companies from participating. | Firms like Westinghouse (USA) and EDF (France) have stayed away due to fear of unlimited liability. |
| To Meet Clean Energy Targets | India aims to expand nuclear power capacity from 8 GW to 100 GW by 2047 as part of its energy transition plan. Private and foreign capital is essential for achieving this goal. | The current public sector capacity alone is insufficient to meet this target. |
Concerns Over Foreign Investment and Liability
| Issue | Concern | Example |
|---|---|---|
| Fear of Legal Responsibility | Foreign firms are concerned they’ll be held liable for accidents even if their equipment fails. | Westinghouse and Areva avoided Indian markets for this reason. |
| Exclusive Operator Liability | Under Indian law, NPCIL (public operator) bears full liability even when fault lies with the supplier. | Suppliers are not directly accountable. |
| Legacy of Industrial Accidents | Memories of the Bhopal Gas Tragedy make both public and political leadership cautious about reducing liability for foreign companies. | In 2012, the NDA opposed dilution of liability citing past industrial disasters. |
How Will Legal Amendments Help Achieve the 100 GW Goal?
| Change | Expected Impact | Examples |
|---|---|---|
| Foreign Participation | Aligning liability provisions with global norms will open the door for foreign investment and technology. | Westinghouse and EDF have expressed interest, contingent on liability changes. |
| Domestic Private Sector Involvement | Amending the Atomic Energy Act, 1962 could allow Indian private companies to construct and run nuclear plants. | Firms like L&T and BHEL could contribute infrastructure and components. |
| Investment in SMRs | Legal certainty may attract investment in Small Modular Reactors (SMRs)—a scalable and future-ready technology. | SMRs are suitable for remote areas and industrial use, and can complement renewables. |
What Are Small Modular Reactors (SMRs)?
| Feature | Details |
|---|---|
| Definition | Compact nuclear reactors with capacity up to 300 MW, factory-built for easier transport and quicker installation. |
| Advantages | Use passive safety features, suitable for remote regions, industrial power, and grid integration with renewables. |
| Global Trend | Being explored by countries like the USA, UK, Russia, and now India for decentralized nuclear expansion. |
Challenges in Technology Transfer of SMRs
| Challenge | Explanation | Examples |
|---|---|---|
| Profit-Driven Sharing | Private foreign firms are unlikely to share SMR tech unless it guarantees high returns. | US firms may restrict tech transfer without IP safeguards. |
| Export Controls | National governments may block tech transfer citing national security. | The US government regulates exports strictly—learning from past issues with China. |
| Partial Transfers Only | Even friendly countries often withhold core technology. | Russia’s Rosatom allowed India to build subcomponents of VVER reactors but retained control over hot sections. |
SMASH MAINS MOCK DROP
India’s nuclear liability regime, while rooted in justice and accountability, has become a major roadblock to the country’s clean energy transition. Critically examine the need for reforming the Civil Liability for Nuclear Damage Act, 2010, in the context of India’s energy security and climate commitments.
