Atomic Ambitions: Geopolitical Impact Of India's Nuclear Energy Reforms

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5 days ago

India's move to open up nuclear power sector to private companies represents a notable shift in its energy strategy and a potential opportunity for private players
Embracing adaptability in policymaking is crucial for navigating the complexities of a constantly changing world and ensuring that policies remain relevant, effective, and responsive to the needs of society. India is taking steps to open its nuclear power sector to private companies—a significant shift from its historically state-controlled approach. While the Atomic Energy Act of 1962 had restricted nuclear power generation to government-owned entities, recent policy changes and budget announcements indicate a push toward private sector involvement and global outreach.
Union Minister Jitendra Singh, who oversees the Department of Atomic Energy, recently said that India will be able to address the apprehensions of the private sector globally about investments in the civil nuclear sector, which was opened up to achieve the ambitious target of producing 100 GW of atomic power by 2047. He also stressed that changes in relevant rules and legislation will have to be made to facilitate the entry of the private sector in the field of nuclear energy, which is currently under the tight control of the government.
This policy shift is driven by the need to attract private capital, potentially increasing India's nuclear capacity and reducing reliance on fossil fuels. It is a move that would require amendments to existing laws, and India is considering changes to the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010 to allow private companies to build, own, and operate nuclear power plants.
It may be recalled that in February this year, Finance Minister Nirmala Sitharaman, introducing the Union Budget for 2025, announced the creation of a new Nuclear Energy Mission for 'Viksit Bharat' and indicated amending laws that are limiting nuclear industry growth. Viksit Bharat 2047 represents the government's vision to transform India into a developed entity by its 100th Independence anniversary in 2047.
The Finance Minister said that generating at least 100 GW of nuclear energy by 2047 is 'essential for our energy transition efforts." She added: 'For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be made." She also said that a Nuclear Energy Mission for research & development into Small Modular Reactors (SMRs) will be set up with an investment of Rupees 20,000 crores ($2.3 billion). At least five indigenously developed SMRs will be operational by 2033, she said.
Many countries allow private sector participation in nuclear power generation, though the extent of this involvement varies significantly. The United States is a prime example, with large private sector participation in its civil nuclear industry. Some countries like Finland and the UK have also seen varying degrees of privatization in their nuclear sectors. Others, like China, Japan, and the United Arab Emirates, are also exploring or implementing public-private partnerships for nuclear power projects. Thus, it is a positive development that India is also taking the necessary steps to gradually open up to private investment in nuclear power by announcing plans to invite private companies to invest in nuclear electricity projects.
Currently, the Nuclear Power Corporation of India Ltd (NPCIL) is the sole operator of nuclear power plants in India. The Atomic Energy Act of 1962 prohibits private sector control of nuclear power generation. The government is actively working to ease restrictions and attract private investment to expand India's nuclear capacity, and private investment is seen as crucial to achieving this goal. Amendments to existing laws are needed to allow private players to participate.
The government is believed to be engaging with private firms like Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd. to potentially invest in new nuclear power plants. Under this proposed model, private companies could acquire land and water resources, invest in plant development, and undertake construction activities in areas outside the reactor complex. However, the Nuclear Power Corporation of India Limited (NPCIL) would still retain the rights to build and operate the plants and manage fuel. Private companies are expected to earn revenue from electricity sales, while NPCIL would operate the projects for a fee.
India is also opening its nuclear power sector to foreign investment, allowing up to 49 per cent foreign direct investment, perhaps starting with a 26 per cent cap and increasing it in phases. It is estimated that the opening up of the nuclear sector could create a $100 billion market, attracting global players. Some companies (like Holtec International of the US) are seeking to transfer Small Modular Reactor (SMR) technology to India. India is also looking to diversify its uranium fuel sources and expand its vendor base for specialised nuclear equipment.
India's decision to open up its nuclear power sector to private and foreign investment has been met with a mix of positive reactions and cautious optimism globally. While some see it as a crucial step toward bolstering India's energy security and achieving its ambitious climate goals, others express concerns about potential risks and regulatory hurdles. Concerns remain about the Civil Liability for Nuclear Damage Act of 2010, which is considered by some to have been a barrier to foreign investment in the past due to its potential for high operator liability in case of accidents.
The Indian Civil Liability for Nuclear Damage Act of 2010 is a law establishing a framework for civil liability in the event of a nuclear incident. It aims to provide prompt compensation to victims and facilitate India's participation in international agreements regarding nuclear damage. The operator of a nuclear installation is held liable for damages, regardless of fault, in a nuclear incident.
The government is looking to address concerns around liability and safety regulations to encourage private investment. The Civil Liability for Nuclear Damage Act imposes significant liability on operators, which may need to be addressed to encourage private investment.
The history of nuclear regulation demonstrates a progression toward tighter controls and greater public and environmental protection, driven by lessons learned from past incidents like Chernobyl and Fukushima. The current regulatory framework and ongoing advancements in safety protocols aim to ensure that nuclear power remains a safe and reliable energy source. In the United States, the Nuclear Regulatory Commission (NRC) plays a key role in ensuring safety when private companies operate nuclear facilities.
Thus, ensuring robust safety protocols and regulatory oversight is crucial when private companies operate nuclear facilities. The Indian Nuclear Insurance Pool (NIP) was established in 2015 to address liability concerns, creating a more secure environment for foreign investors. The Pool provides capacity for insurance coverage to operators and suppliers for any nuclear liability toward third parties under the Civil Liability for Nuclear Damage Act.
India's nuclear energy ambitions could have broader geopolitical implications, particularly in its relationship with countries like the US. The US has expressed intentions to remove barriers to civil nuclear cooperation with India, recognizing its potential for growth in the sector. In March 2025, the US Department of Energy approved the proposal from Holtec International to share Small Modular Reactor (SMR) technology with India, removing a key hurdle that had delayed the deal. French and US companies have also expressed interest in partnering with Indian companies on SMR projects. The Russian nuclear company Rosatom has also offered its expertise in building SMRs in India.
India has signed agreements with many countries for collaboration on nuclear energy, including the development of advanced reactors. Russia continues to be a key partner, involved in projects like Kudankulam and exploring areas like floating nuclear power plants and Small Modular Reactors (SMRs).
As regards the US, the 2008 Civil Nuclear Agreement and more recent regulatory clearances, like the one granted to Holtec International for SMR technology transfer to Indian firms, are facilitating deeper engagement.
France is collaborating in the proposed Jaitapur Nuclear Power Project located in Maharashtra and exploring collaboration in SMRs and research reactors. The Jaitapur plant will have six reactors, each with a capacity of 1,650 MW and involves technical cooperation with Electricité de France.
With Canada, India has a uranium supply agreement and potential for collaboration in CANDU reactor technology and related services. CANDU is a type of nuclear reactor known for its use of heavy water (deuterium oxide) as a moderator and coolant, and natural uranium as fuel. CANDU reactors are a significant part of Canada's energy production, with some reactors also operating in other countries including Argentina, China, South Korea, Romania, India, and Pakistan.
With South Korea, India has signed an intergovernmental agreement for civil nuclear cooperation, potentially opening avenues for South Korean companies to participate.
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Summing up, the Indian government's move to open up the nuclear power sector to private companies represents a notable shift in its energy strategy and a potential opportunity for private players to contribute to the nation's nuclear power growth. This policy shift, alongside legislative amendments, aims to boost nuclear power generation and facilitate private sector participation, including international collaborations. The move is expected to attract foreign capital and technology, potentially transforming India's nuclear energy landscape. Addressing public concerns about nuclear safety and waste management is essential. While challenges remain, the government is taking the right steps to address concerns about liability, safety, and regulations to attract private investment and achieve its ambitious nuclear energy goals. Adapting to changing needs is indeed a cornerstone of effective policymaking.
The writer is a retired Indian diplomat and had previously served as Consul General in New York. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18's views.
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New Delhi, India, India
First Published:
July 28, 2025, 13:58 IST
News opinion Opinion | Atomic Ambitions: Geopolitical Impact Of India's Nuclear Energy Reforms
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