India’s push for nuclear energy can support climate goals but ground execution will determine its impact

How much the move helps will depend on how well the Act is implemented, from framing and enforcing effective rules through capable and empowered institutions to the balance achieved between the sector’s growth and concerns of safety and environmental protection.

The Act heralds three transformative shifts. First, it opens the door for private sector participation in nuclear power generation, equipment manufacturing and fuel-cycle services. Second, it attempts to rationalize India’s nuclear liability regime that deterred foreign suppliers and investors. Third, it makes space for advanced nuclear technologies, such as modular reactors (SMRs) and next-generation reactors.

So far, nuclear power has been the preserve of public sector entities like Nuclear Power Corporation of India Ltd (NPCIL). Rooted in national security considerations, this policy constrained India’s access to capital and innovation. Now private players would be able to forge partnerships, form joint ventures and play manufacturing roles, while the state retains control over sensitive aspects of the fuel cycle.

This calibrated liberalization acknowledges that public finance alone cannot support the scale of nuclear capacity required for a low-carbon economy. From a private investor’s perspective, this legislative change is welcome but not sufficient.

Nuclear projects are capital-intensive with long gestation periods. Their viability depends on predictable tariffs, long-term power purchase agreements and the assurance of contract enforcement. Subordinate legislation on pricing mechanisms, offtake guarantees and dispute resolution would help attract private investment. An important concern would be how robust the tariff determination mechanism is.

A politically sensitive aim was to undo the disproportionate and open-ended deterrence introduced by the Civil Liability for Nuclear Damage Act of 2010, which allowed plant operators to sue suppliers over mishaps. The new law seeks to rationalize supplier exposure with the objective of aligning India’s liability regime more closely with global practices while preserving safeguards and the rights of victims.

This is a delicate balancing act, as perceptions of diluted accountability could provoke public resistance. The government needs to communicate clearly how the revised framework would hold operators accountable and how it is designed to protect citizens and ensure prompt compensation through insurance pools and other mechanisms.

The Act recognizes technologies like SMRs, which promise lower upfront costs, enhanced safety features and flexible deployment. Prospects of SMR deployment near load centres (like industrial clusters) open up exciting possibilities for integrating nuclear power with our industrial decarbonization agenda. Indigenous technology efforts must be kept up too.

SMR optimism must be tempered by the fact that these reactors are still new. Regulatory capacity, supply chains and human resource skills will need strengthening for SMR deployment.

Our nuclear regulatory framework was designed for large reactors operated by a single public entity. A future involving multiple reactor designs and private operators will require us to not just empower the Atomic Energy Regulatory Board (AERB), but ensure its autonomy. It must have the resources it needs to oversee a far more complex and diversified nuclear ecosystem.

Without strengthening the AERB, the whole mission to multiply our nuclear generation capacity could come apart.

From a climate policy perspective, nuclear energy offers low-carbon power that can complement intermittent renewables and strengthen grid stability. The Act takes India’s net-zero goal into view, but nuclear energy would benefit from clearer integration with broader power sector reforms. For nuclear reactors to be treated as climate infrastructure, they must fit clearly into climate finance frameworks, so that projects can compete for patient capital and green funding.

Finally, we cannot overlook the social dimension of nuclear energy. Many projects in India have faced resistance on account of perceived opacity.

International experience suggests that early community engagement, safety disclosures and benefit sharing are essential for popular acceptance. These principles should inform regulation. Perhaps an office of public advocacy could disseminate information, address apprehensions and take up credible concerns with policymakers and regulators. This would go a long way in enlisting public support for nuclear projects.

The Act’s success in making nuclear power integral to India’s clean-energy transition will depend on investment and innovation. But execution—regulatory certainty, contractual clarity and institutional capacity—will be key. It can prove transformative if what’s on paper unfolds well on the ground.

The authors are partners, JSA Advocates & Solicitors.