• In July 2024, the Indian government, during the presentation of the Union Budget FY 2024-25, outlined plans for expanding the nuclear energy sector.
• Plans include collaborations with private players for the development of Bharat Small Reactors (BSR) and Bharat Small Modular Reactors (BSMR).
• This initiative aligns with India’s commitment to achieving 500 GW of non-fossil fuel-based energy by 2030, pledged at COP26.
• Enhancing nuclear energy infrastructure is crucial for decarbonization, ensuring energy reliability while reducing dependency on fossil fuels.

Existing Legal Framework

• Atomic Energy Act (AEA), 1962:

• Governs India’s nuclear energy sector, with amendments introduced in 1987.
• Section 3(a) grants exclusive control to the central government over nuclear energy development, production, and disposal.
• Private Sector Constraints:
• The Act limits private participation in key nuclear activities, especially in research and development (R&D), restricting their role to infrastructure development.
• Supreme Court Verdict (Sept 2024):
• In Sandeep T.S. vs Union of India, the court upheld the AEA provisions, reinforcing the need for stringent safeguards due to potential risks of nuclear accidents and misuse.

• Civil Liability for Nuclear Damage Act (CLNDA), 2010

• No-Fault Liability:
• Ensures nuclear operators are held accountable for nuclear incidents and mandates compensation for victims.
• Pending Legal Challenge:
• The Act is being contested over potential conflicts with the absolute liability principle and the polluter pays principle.
• Ongoing litigation raises uncertainty, potentially discouraging private investment.
• Judicial Precedent:
• In G. Sundarrajan vs Union of India (2013), the Supreme Court referred to Chernobyl and Fukushima disasters, emphasizing strict safety inspections for projects like Kundankulam Nuclear Plant.

 Private Sector Role and Public-Private Partnerships (PPP)

• Limited Past Involvement:
• Private entities have primarily participated in engineering, procurement, and construction (EPC) for nuclear infrastructure.
• New Investment Avenues:
• The government seeks to attract $26 billion in private investment, especially in Small Modular Reactors (SMRs).
• Challenges in R&D:
• AEA restrictions on private R&D involvement pose a barrier to nuclear innovation.
• Potential PPP Model:
• A model where the government retains a 51% stake (e.g., NPCIL) while allowing private capital infusion could be a feasible solution. 

Regulatory Reforms and Atomic Energy Regulatory Board (AERB)

• Regulatory Oversight:
• The AERB is responsible for overseeing nuclear safety, but concerns about its lack of autonomy persist.
• Proposed Reforms:
• The Nuclear Safety Regulatory Authority Bill, 2011, aimed at strengthening AERB’s independence, remains unenacted.
• Future Considerations:
• A revamped regulatory framework and legal clarity are essential to foster private sector participation, ensuring safety and reducing regulatory risks.

 Liability and Safety Concerns

• High Liability Standards:
• Given the inherent risks of nuclear energy, liability concerns deter private investment.
• Historical Disasters:
• The tragedies of Chernobyl (1986) and Fukushima Daiichi (2011) highlight the dangers of nuclear accidents near densely populated areas.
• CLNDA and Compensation Issues:
• Critics argue that CLNDA does not align with absolute liability principles, raising concerns over adequate compensation.
• Ensuring Public Trust:
• Regular safety inspections, transparency (under the RTI Act), and public accountability are critical to gaining public confidence and mitigating risks.

 Economic and Environmental Aspects

• High Capital Requirements:
• Nuclear power expansion demands significant investment in skilled labor and advanced technology.
• Planned Growth:
• As per the World Nuclear Association (Sept 2024), India aims to expand nuclear power production by 32 GWe.
• Decarbonization and Sustainability:
• Nuclear energy is a reliable low-carbon energy source, playing a key role in India’s commitment to net-zero emissions by 2070.

 Way Forward

• Balancing Private Investment and Regulation:
• Reforms in the AEA and CLNDA are necessary to create a viable environment for private participation without compromising safety.
• PPP Structuring:
• Developing PPP models where the government retains regulatory control while enabling private funding.
• Enhancing Regulatory Framework:
• Strengthening AERB’s autonomy, increasing transparency, and ensuring robust safety standards will boost investor confidence.
• Achieving Long-Term Energy Goals:
• Nuclear energy is integral to India’s energy security and decarbonization strategy. Effective management of legal, safety, and investment challenges will determine its long-term success.

The Union Budget 2025-26 underscores India’s commitment to a nuclear-powered future, reducing carbon emissions and securing energy reliability.  The Nuclear Energy Mission for Viksit Bharat positions India as a global leader in advanced nuclear technology, with a strategic push toward indigenous innovation, public-private partnerships, and regulatory reforms.  With robust policy support and technological advancements, India’s nuclear sector is poised for unprecedented growth, solidifying its role in a clean energy-driven future.