Context: In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced the government's plan to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage (CLND) Act, 2010. 

• This move is seen as an effort to appease U.S. nuclear suppliers, who have long opposed India's liability framework for nuclear accidents.
• While the U.S. has lobbied for these changes to facilitate nuclear reactor sales to India, reducing supplier liability could undermine nuclear safety and pose serious economic and social risks.

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Key Concerns with the Proposed Amendment

The proposed amendments come with the following concerns:

Dilution of Nuclear Liability Protections

• India’s CLND Act, 2010, provides a "right of recourse", allowing the operator (NPCIL) to recover compensation from suppliers if an accident occurs due to defective reactor design or substandard components.
• The amendment could remove this provision, indemnifying U.S. suppliers from liability in the event of a disaster.
• The U.S. has historically opposed supplier liability in international nuclear contracts.

Read the article on the Atomic Energy Regulatory Board!

Historical Lessons: Role of Design Defects in Nuclear Accidents

• Fukushima (2011): Reactor failure partly caused by flaws in General Electric’s Mark 1 containment design, identified as early as 1972.
• Three Mile Island (1979): U.S. Babcock & Wilcox ignored known safety issues that contributed to the accident.
• If suppliers face no liability, there is less incentive for them to ensure safety in nuclear reactor designs.

Unfair Burden on Indian Taxpayers

• ₹1,500 crore liability cap in India’s current law is inadequate, considering the massive costs of nuclear disasters:
  • Fukushima (2011): Clean-up costs estimated between ₹20 lakh crore - ₹46 lakh crore.
  • The amendment would shield suppliers and leave Indian taxpayers responsible for damages in case of an accident.

Read the article on the International Atomic Energy Agency (IAEA)!

Costly and Unviable Nuclear Deals

• The leading U.S. reactor model on offer, Westinghouse AP1000, has a poor track record:
  • Two U.S. reactors in South Carolina were abandoned after spending $9 billion.
  • Two others in Georgia cost $36.8 billion, over 250% higher than initial estimates.
• Electricity from these reactors would be several times costlier than solar, wind, or even coal power.
• Small modular reactors (SMRs), like those from NuScale Power, are even less economical due to lack of economies of scale.

Read the article on the 3 Stage Nuclear Programme of India!

Why is the U.S. Pushing for these Changes?

The US is pushing for these amendments in the 

• Economic Interests: The U.S. nuclear industry has struggled to sell reactors internationally, and India represents a potential multi-billion dollar market.
• Lobbying by U.S. Suppliers: The U.S. government and industry leaders have been pressuring India for years to remove supplier liability.
• Political Pressure: Outgoing U.S. Ambassador Eric Garcetti acknowledged directly lobbying Indian politicians, showing intense U.S. interest in this policy change.

Implications for India

The above changes can have the following implications for India:

• Increased Risk for Indian Citizens – If an accident occurs, Indian citizens bear the economic and health consequences while foreign suppliers walk away unscathed.
• Loss of Bargaining Power – Weakening liability laws could set a precedent for future international nuclear deals, forcing India into disadvantageous agreements.
• Compromising Energy Security – Instead of investing in cost-effective renewable energy, India risks committing billions to unproven, expensive U.S. nuclear technology.

Read the article on Net Zero Renews India's Nuclear Power Push!

Way Forward

The following measures can be adopted in ensuring safety & national interest:

• Retain Supplier Liability – Keeping the right of recourse ensures suppliers prioritize safety and quality.
• Increase Liability Limits – ₹1,500 crore cap must be revised to reflect true costs of nuclear accidents.
• Explore Alternative Energy Sources – Focus on renewables like solar, wind, and hydro, which are cheaper, faster to deploy, and safer.
• Ensure Parliamentary Scrutiny – Any amendment must undergo transparent debate to safeguard national interests.

UPSC Practice Question

The proposed amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage (CLND) Act, 2010, seek to limit supplier liability in nuclear accidents. Critically examine the implications of this move for India's energy security, economic interests, and nuclear safety. (Ink in 250 words)