New Delhi: India is set to take a major step towards attracting foreign investment in the nuclear energy sector by easing its nuclear liability laws. According to sources, the Indian government is working on a draft proposal to amend the Civil Liability for Nuclear Damage Act, 2010, to set a limit on the fines and liabilities for suppliers involved in nuclear accidents.
This move is primarily aimed at attracting U.S. companies, such as General Electric and Westinghouse Electric, which have been hesitant to invest in India’s nuclear energy sector due to unlimited liability risks.
India’s Nuclear Energy Ambitions and U.S. Trade Relations
The Modi government’s push to amend the nuclear liability laws is part of its broader strategy to ramp up the country’s nuclear energy capacity. The goal is to increase India’s nuclear power generation to 100 gigawatts by 2047, a twelve-fold increase from current levels. Additionally, these changes are expected to facilitate stronger trade negotiations with the United States, aiming to boost bilateral trade from $191 billion last year to $500 billion by 2030.
The government’s efforts are designed to align with its clean energy initiatives, which are critical for India’s long-term sustainability. By easing the liability concerns, India hopes to entice major U.S. firms to collaborate in building nuclear reactors and expand the country’s nuclear infrastructure.
Key Changes to the Nuclear Liability Law
Sources indicate that the revised draft law will remove a key section of the 2010 law that currently holds suppliers accountable for unlimited liabilities in the event of a nuclear accident. This has been one of the primary deterrents for foreign suppliers, particularly American companies, who fear exposure to potentially enormous compensation claims.
According to Debashish Mishra, Chief Development Officer at Deloitte South Asia, “India needs nuclear energy, which is both clean and essential for its energy future. The liability cap will ease the major concern of suppliers and encourage more investment.”
How Will U.S.-India Trade Relations Benefit?
The relaxation of the nuclear liability laws is expected to resolve concerns from American companies like General Electric and Westinghouse Electric, who have been reluctant to engage in nuclear projects in India due to the risk of unlimited liability in case of an accident. With the proposed changes, these companies will be more inclined to invest in India’s growing nuclear energy market.
Experts believe that the passage of the revised nuclear liability law will play a significant role in future trade agreements between India and the U.S., particularly those focused on nuclear energy and technology sharing.
What’s in Store for India’s Nuclear Future?
Sources confirm that the Indian government is optimistic about gaining approval for the proposed amendments during the Monsoon Session of Parliament in July. Under the new changes, an operator’s right to claim compensation from the supplier in case of an accident will be limited to the value of the contract. Currently, the law does not define how much compensation an operator can demand, or the time period for which the supplier will be held accountable.
This modification is expected to give a major boost to India’s nuclear power aspirations while strengthening its relationship with the United States, particularly in energy trade and technology partnerships.
