India set to ease nuclear liability laws to attract US giants, power $500 billion trade ambitions

India is preparing to revise its nuclear liability legislation to cap accident-related penalties for equipment suppliers — a significant policy shift aimed at attracting US firms like General Electric and Westinghouse that have long hesitated to enter the Indian market due to the risk of unlimited liability.

According to three senior government sources, the proposed amendments — spearheaded by Prime Minister Narendra Modi’s administration — seek to unlock the country’s vast nuclear energy potential, targeting a twelvefold increase in production capacity to 100 gigawatts by 2047.

The move is also strategically aligned with India’s efforts to finalize a sweeping trade agreement with the US, projected to elevate bilateral trade from $191 billion to $500 billion by 2030.

The Department of Atomic Energy has drafted revisions to the Civil Nuclear Liability Damage Act of 2010, aiming to remove a contentious clause that exposes suppliers to indefinite liability in the event of a nuclear accident. This clause, shaped by the trauma of the 1984 Bhopal gas tragedy, has been a longstanding roadblock for foreign suppliers.

"This is a strategic pivot. India needs nuclear power—it’s clean, scalable, and essential to meet future energy demands," said Debasish Mishra, Chief Growth Officer at Deloitte South Asia. "A liability cap would remove the primary barrier facing reactor suppliers."

The proposed changes bring India’s regulations closer to global norms, placing the primary responsibility for safety and compensation on operators rather than suppliers. Under the draft law, compensation rights of plant operators will be limited to the contract value and confined to a defined timeframe — changes that are expected to reassure foreign investors.

Currently, there’s no statutory cap on either the compensation amount or duration of supplier liability, creating legal ambiguity that has kept U.S. companies on the sidelines. Russian and French firms, in contrast, have benefited from government-backed liability protections.

The amendments are expected to be tabled in the monsoon session of Parliament beginning July, with government insiders confident of securing passage.

The 2010 law was born from the legacy of the Bhopal disaster, where more than 5,000 people died following a toxic gas leak at a Union Carbide plant. The U.S. firm paid $470 million in an out-of-court settlement five years later, and the tragedy has since loomed large over industrial liability policies.

In addition to international players, India’s private sector is also being tapped to participate in the nuclear build-out. Major conglomerates including Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd have reportedly held talks with the government to invest approximately $5.14 billion each in nuclear ventures.

For smaller reactors, the draft proposes a reduced liability cap of $58 million, while the current $175 million cap for large reactors is likely to remain unchanged.

As India accelerates toward its clean energy targets and net-zero commitments, the recalibration of its nuclear liability framework could unlock a new era of investment, innovation, and international collaboration.