Govt tables bill in Lok Sabha seeking to open up nuclear energy, scrap supplier liability clause
The bill permits any company or joint venture to construct, own, operate, or decommission a nuclear power plant or reactor in the country
The Centre on Monday introduced a bill in Parliament that proposes the grant of licences to private companies to operate nuclear power plants, the removal of an existing contentious liability clause for suppliers of fuel and technology, as well as the rationalisation of the levels of payouts by operators in case of accidents.
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India bill, 2025, or SHANTI Bill, aims to boost investments in the nuclear power sector to help India achieve its ambitious target of 100 GW of nuclear power capacity by 2047. The bill, which was introduced by Union minister for state for atomic energy Jitendra Singh, will be sent to a standing committee.
The bill permits any company or joint venture to construct, own, operate, or decommission a nuclear power plant or reactor within the country after receiving a licence that requires a safety authorisation on radiation exposure. The bill says “any department of the Government of India or any institution or authority or corporation established or owned or controlled by such government, any government company, any other company, a joint venture among any of the aforesaid; or any other person expressly permitted by the central government, by notification, to set up such facilities or undertake such activities,” will be eligible to apply for a licence .
However, enrichment of nuclear fuel and management of spent fuel as well as the production of heavy water will remain the preserve of the central government or entities owned by it.
So far only public sector companies could operate nuclear power plants, though joint ventures were allowed. Indian conglomerates, including the Adani Group, Larsen & Toubro (L&T), and Tata Power Ltd, have previously publicly shown interest in entering the nuclear power generation space.
Along with exempting research, development and innovation activities from needing a licence, the bill would “provide for a pragmatic civil liability regime for nuclear damage”, says the statement of objects of the bill. The bill also calls for an amendment to the Patents Act 1970 for the grant of patents relating to atomic energy.
The bill proposes to repeal the Atomic Energy Act 1962 and the Civil Liability for Nuclear Damage Act (CLND Act) 2010. It removes a clause in the CLND Act, that gave the operator of a nuclear power plant the right of recourse in case of damage that has “resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services.”
Global suppliers of components and fuel had been concerned about the law allegedly allowing action against suppliers in case of any damage.
The government has now proposed to completely do away with this section in a bid to allay their concerns. This section has been a major deterrent for several US companies, which moved to participate in India’s nuclear sector after the 2008 civilian nuclear with the US, from constructing nuclear power plants in India.
“This should help in investments and achieving a trade deal with the US,” Kirit Parikh, former member (energy) at the erstwhile Planning Commission told Mint. “The liability clause has always been bothering everyone. Those countries wanted some relaxation or cuts. Now this move should bring the norms as per global standards.”
Energy has been a key subject of the India-US talks on the bilateral trade deal. Along with increased supplies of oil and gas from the US, India has also been offering investment opportunities in nuclear power to the American side, largely in the still-nascent small modular reactor (SMR) space, where India lacks the required technology.
“For nuclear power to play its rightful role in India’s clean-energy mix, the policy framework must match global norms, which is what is being proposed by the Atomic Act. Greater private sector participation will only come with clarity on nuclear liability, which in turn will materially improve investor confidence and accelerate capacity addition” said Debasish Mishra, chief growth officer for Deloitte in South Asia.
The government has also proposed to set up an Atomic Energy Redressal Advisory Council , which would hear complaints of any licensee or operator, along with fixing tariffs.
The new bill also limits liabilities of operators based on the reactor’s output. The 2010 bill had limited the liability of an operator to ₹1,500 crore. The second schedule of the bill says that operators with reactors having thermal power capacity above 3,600 MW will have liability up to ₹3,000 crore. Similarly, reactors above 1,500 MW and up to 3,600 MW will have a liability limit of ₹1,500 crore.
Reactors above 750 MW and up to 1,500 MW will have ₹750 liability limits and those above 150 MW and up to 750 MW have a limit of ₹300 crore. 150 MW reactors, fuel cycle facilities other than spent fuel reprocessing plants and transportation of nuclear materials have a ₹100 crore liability limit.
Like in the 2010 act, the legislation specifies that the operator of a nuclear power plant will not be liable in case of “a grave natural disaster of an exceptional character, an act of armed conflict, hostility, civil war, insurrection or terrorism”.
“For nuclear power to play its rightful role in India’s clean-energy mix, the policy framework must match global norms, which is what is being proposed by the Atomic Act. Greater private sector participation will only come with clarity on nuclear liability, which in turn will materially improve investor confidence and accelerate capacity addition” said Debasish Mishra, chief growth officer for Deloitte in South Asia.
According to the bill, the central government shall fix the tariff for power from nuclear power plants based on such norms and mechanisms as may be specified by it by notification.
The government has proposed to set up an Atomic Energy Redressal Advisory Council, led by the chairperson of the Atomic Energy Commission, which would hear complaints of any licensee or operator, along with fixing tariffs.
With inputs from Rituraj Baruah and Nehal Chaliawala from Mint.