THE Finance Minister Nirmala Sitharaman has, in her budget speech, announced the government’s intention to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act, 2010 (CLNDA).  The amendment to the Atomic Energy Act is meant to facilitate the entry of the private sector in  nuclear energy production, which, in itself, is a bad idea.  However, the amendment to the CLNDA is more dangerous as it dilutes the compensation to be given to people affected by a nuclear accident, whether it be in the public sector or private sector.

The CLNDA was adopted by Parliament in 2010.  A civil nuclear liability law was necessary for the trade and supply of foreign nuclear reactors to be installed in India.  The UPA government had committed to buy 10,000 MW of nuclear reactors from the United States as part of the civil nuclear deal.   However, when the Bill was taken up for discussion in Parliament, there was a strong demand that adequate provisions be made in the Act, so that any victim of nuclear accident would get adequate and quick compensation. For this, a clause was added – 17(b) – which provided for liability not only on the operators of the reactor but also the suppliers of the reactor and equipment.  The government tried to dilute the Act by changing the clause 17(b) but it failed to do so, mainly due to the resistance put up by the Left MPs.

An important issue that exercised public pressure on the government at that time was the Supreme Court verdict rejecting a petition by the government asking for enhanced compensation from Union Carbide to the thousands of victims of the Bhopal gas tragedy. The Court held that there was no basis as per law for such a demand. The Fukushima nuclear accident that occurred in Japan in March 2011, just months after the CLNDA was adopted, further highlighted the need for a stringent civil nuclear liability law. It became clear that without specific provisions such as 17(b), foreign suppliers of nuclear equipment could not be made liabile for any accident or damage caused. 

Since the passing of the CLNDA, multinational companies which manufactured nuclear reactors, particularly of the United States, refused to sell nuclear reactors or make investments in the nuclear sector claiming that liability of suppliers is against international norms and contractual obligations.  This stand of the foreign companies has been the major obstacle to foreign nuclear reactors being installed and operated in India.

Various efforts were made in subsequent years to try to overcome or circumvent the issue of suppliers’ liability.  During President Obama’s visit to India in 2015, the Modi government stuck to the position that the CLNDA need not be amended and suggested creation of an India Nuclear Insurance Pool as part of an overall risk management scheme for liability.  However, this also did not evoke a positive response from foreign nuclear suppliers.

The United States government has been continuously putting pressure on the Indian government to amend the CLND Act and finally the Modi government has succumbed to the pressure.  Allowing the private sector to build and operate nuclear reactors will increase the risk of nuclear accidents.  So far, nuclear power has been in the government sector and there has been a good safety record of the nuclear reactors which are run and operated by the Nuclear Power Corporation of India.  When nuclear plants come into being in the private sector and the amendment of the CLNDA leads to supply of expensive foreign nuclear reactors to India, the risk involved in the eventuality of an accident will have to be borne by the operators.  Finally, the liability will be the responsibility of the Indian State and foreign suppliers will escape from any liability whatsoever. 

It may be recalled that the BJP had supported the inclusion of suppliers’ liability in the CLND Bill when it was discussed in Parliament.  Today, its government is reneging on this commitment.  By doing so, it is sending out a message that “Indian lives do not matter”.

(February 5, 2025)