India reportedly plans to ease nuclear regulations to attract foreign suppliers

The Indian government is reportedly preparing to ease legislation governing the liability of nuclear technology suppliers in the event of an accident. The move is intended primarily to attract US companies, which have avoided the market because there is no cap on their liability. Easing US companies’ access to the local market could also help India in negotiations over US tariffs.

India has ambitious plans for nuclear power. The country currently has only around 8 GW of installed capacity, but this is expected to reach as much as 100 GW by 2047. At present, however, only six new units with a total capacity of 4.8 GW are under construction, according to the World Nuclear Association.

According to three sources quoted by Reuters from government circles, India’s Department of Atomic Energy is preparing a new law. It is intended to amend a key provision of the country’s Civil Liability for Nuclear Damage Act, which exposes nuclear technology suppliers to unlimited liability in the event of an accident. Indian government representatives did not respond to Reuters’ questions about a possible amendment to the legislation.

“India needs nuclear power, which is clean and essential. Capping liability will allay the main concerns of nuclear reactor suppliers,” Debasish Mishra, Deloitte’s director for development activities in South Asia, told Reuters.

According to Reuters, the legislative change would bring India into line with international standards, under which the plant operator is primarily responsible for operational safety. Some analysts say the change is key to trade negotiations between India and the US. These are expected to lead to a trade deal that would increase the volume of trade between the countries to $500 billion a year by 2030, more than double the current level.

Reuters’ sources say the government is confident it can secure sufficient support from lawmakers for the change. Under current proposals, suppliers’ liability for compensating operators would be capped at the value of the technology supply contract. It would also be subject to a time limit set out in the contract. According to the news agency, the current legislation limits neither the amount of compensation nor the period for which suppliers remain liable.