In an effort to reach its carbon emission reduction targets, India may allow foreign companies to purchase up to 49% of its nuclear power plants

Historically, nuclear power facilities in India have been exclusively owned and managed by the state-run Nuclear Power Corporation of India Ltd (NPCIL) and its wholly-owned subsidiary, Bharatiya Nabhikiya Vidyut Nigam (BHAVINI).

To facilitate the involvement of the private sector, the government has proposed modifications to essential legislation, including the Atomic Energy Act of 1962, which serves as a framework for the development and regulation of nuclear energy, and the Civil Liability for Nuclear Damage Act of 2010, which establishes compensation mechanisms for nuclear incidents.

Nuclear energy refers to the energy released during nuclear reactions, which can occur through fission (the splitting of atomic nuclei) or fusion (the merging of atomic nuclei). In the process of nuclear fission, heavy atomic nuclei, such as those of uranium or plutonium, are divided into lighter nuclei, resulting in the release of a significant amount of energy.

This energy is harnessed in nuclear power plants to produce electricity. As for the current status of nuclear power capacity in India, the nation has an installed nuclear power capacity of 8,180 MW, accounting for 2% of the total installed electricity capacity, distributed across 24 nuclear power reactors. In terms of capacity expansion, there are 10 new reactors (totaling 8 GW) under construction in various states, including Gujarat, Rajasthan, Tamil Nadu, Haryana, Karnataka, and Madhya Pradesh, along with the approval for a 6×1208 MW nuclear plant in Andhra Pradesh in partnership with the United States.

The Necessity for Involvement from Foreign and Private Sectors: India is significantly reliant on coal, which constitutes over 70% of its electricity generation. Nuclear energy, recognized as a stable and low-carbon alternative, is crucial for emission reduction while maintaining a reliable baseload supply.

The high capital requirements for nuclear projects necessitate substantial initial investments. Facilitating foreign direct investment (FDI) could accelerate resource mobilization and technology transfer. Following the 2008 Indo-US Civil Nuclear Agreement, India gained entry to global nuclear markets; however, anticipated commercial partnerships did not develop due to concerns regarding liability.

Proposed Reforms Under Review: The government is contemplating changes to existing legislation to permit foreign entities to invest up to 49% in nuclear sector projects. Amendments to the Atomic Energy Act of 1962 would enable private companies to obtain licenses for the construction, ownership, and operation of nuclear power facilities.

The Easing Civil Liability for Nuclear Damage Act of 2010, established after the 1984 Bhopal Gas Tragedy, imposes strict liability on suppliers, which has hindered foreign investment. The proposed changes would limit the operator's right to seek compensation from suppliers to the contract value and a defined timeframe.

Additionally, the draft legislation suggests a reduced liability cap of $58 million for small reactor operators, while the cap for large reactor operators is expected to remain at $175 million. Regulatory and Safety Oversight: The Atomic Energy Regulatory Board (AERB) and the Department of Atomic Energy (DAE) will maintain oversight of all operations.

Any relaxation of investment regulations will be accompanied by stringent adherence to India's safety standards, in accordance with the guidelines set forth by the International Atomic Energy Agency (IAEA).