THE Modi government's new Bill, the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 (passed by Lok Sabha on December 17 and under discussion in Rajya Sabha), effectively gives a free pass to the suppliers of nuclear plant and equipment. Even if their faulty equipment causes a nuclear accident, the liability will be solely with the nuclear plant's owner. And even this liability will be capped at 300 million SDRs (Special Drawing Rights), equivalent to $ 420 million at the current value of the dollar. SHANTI also allows private players to enter the nuclear energy sector, which has until now been under the exclusive control of the central government. Both the laws that govern nuclear energy activities in the country, the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 (CLNDA), will be replaced with the proposed SHANTI.

The current Act of Parliament that governs nuclear liability issues is CLNDA, which the pro-US nuclear lobby fiercely opposed the suppliers' liability clauses. In India, CLNDA was being discussed in the Parliament during the 25th anniversary of the Bhopal Gas Tragedy. It had become clear that the impact of the methyl isocyanate (MIC) leak in Bhopal was much greater than the government and the courts had foreseen. It also drove home the importance of suppliers' liability in such hazardous plants. In the Bhopal Gas Leak case, the US company—Union Carbide Corporation (UCC)—had designed and supplied the plant and equipment, and held 50.9% of the shares of Union Carbide India Limited (UCIL). In the wake of the Bhopal Gas Leak, the world's worst industrial disaster, and Union Carbide's trade-off of profits over the lives of Indian people, the issue of suppliers' liability was a live political issue when CLNDA was placed before Parliament.

It was the Left that had held out against diluting suppliers' liability in an industry that was even more hazardous than Carbide's Bhopal plant. The BJP had also sided with the Left at the time, forcing the UPA government, which lacked a majority in the Rajya Sabha, to retain suppliers' liability. Suppliers' liability was anathema to the US nuclear industry, which operates under a low-liability regime at home. The Russians and the French were willing to supply nuclear plants and equipment to India without linking it to change in India's liability laws.

Under the current nuclear liability provisions, Russia has built and commissioned two 1000-MW nuclear units at Koodankulam, with Rosatom as the nuclear reactor supplier. The French proposal in Jaitapur collapsed due to a) the high cost of the French reactors and therefore the high cost of electricity, b) Framatom, the French nuclear company itself foundered, with its inability to meet time deadlines and mounting costs for plants,  Flamanville in France and Olkiluoto in Finland. Westinghouse and GE, the two major nuclear plant suppliers, also foundered in the US almost at the same time. The nuclear division of Westinghouse faced bankruptcy and has now been acquired and restructured by two Canadian companies. GE and Hitachi’s nuclear divisions have merged and under the name of Hitachi GE Veronava, is currently offering new modular reactors. The story of their crisis was the huge cost and time overruns, the bane of the US nuclear suppliers throughout its history.

The one difference between US suppliers and others is that, in pursuing nuclear dominance, the US exempted nuclear plant owners and suppliers from any serious liability. It is not that the nuclear industry is not regulated in the US, but the US nuclear regulation is more focused on licensing and design clearance than on oversight of safety measures at the plant. In the event of any accident or damage, the US suppliers are protected, as their liabilities are limited, with other liabilities borne largely by the US Government under the Price Anderson Act.

In the aftermath of the India-US Nuclear Deal signed in 2005, the "123 Agreement" as it is called (as it is under Section 123 of the United States Atomic Energy Act), the pressure mounted on India to accept US nuclear reactors and to limit or waive suppliers' liability. CLNDA had clear provisions for suppliers’ liability and the Supreme Court Judgement in the Delhi Oleum Leak case in 1986 had also established the principle of absolute liability for all hazardous industries in Indian law. Under both these, the suppliers liability in nuclear plants existed and would therefore have applied to supplier of nuclear plants and equipment.

SHANTI, the proposed law, has two objectives. One is to induct private players, possibly the Adani and Tata groups, into the nuclear sector, which till now has been the exclusive preserve of the government-owned Nuclear Power Corporation of India Limited (NPCIL). Over the last 60 years, DAE/NPCIL has built a total capacity of 8,780 MW across 25 units at seven plants. Therefore, importing nuclear plants from abroad could also help private players kick-start their operations.

The other objective is possibly importing nuclear plants from the US, as a sweetener that India could offer the Trump administration. Without getting into the issue of negotiations with Trump, who does not appear to be capable of reaching an agreement, I will address here a) whether the US companies today can supply nuclear plants at all, and b) whether the costs of such US plants, if they do succeed, will reenact the Enron saga.

Let us take the US nuclear industry and its track record of meeting time and cost schedules. The US nuclear industry—primarily General Electric and Westinghouse—had argued that scaling up nuclear plants would yield economies of scale: as plant size increased, the cost per MW decrease, and therefore the cost of electricity. Unfortunately, this did not happen with the US plants. As the size increased, construction times and costs escalated well beyond expectations. The last two nuclear reactors in the US were supplied by Westinghouse to Georgia Power in Vogtle, seven years behind schedule. They cost around $37 billion, more than double the original estimate of $14 billion.

The huge time and cost overruns of the Vogtle plant landed Westinghouse's nuclear division in bankruptcy, leading to its acquisition by two Canadian companies: Cameco, a nuclear fuel company and Brookfield Renewables, a renewable energy company. The original Westinghouse AP300 Small Modular Reactor is now owned by two Canadian companies with no nuclear plant experience. The second US SMR in the running is GE Vernova Hitachi Nuclear Energy's BWRX-300, again an unproven design. GE's nuclear division and Hitachi merged to form a partnership and pooled their nuclear resources together. Their first plant construction started in May 2025 in Ontario, Canada. Right now, we have no way of judging whether it will be a different GE or if the same story of time and cost overruns will plague this project as well. Interestingly, the US, while castigating India for buying Russia's oil, itself is heavily dependent on uranium fuel for its nuclear reactors and imports approximately $1 billion worth of enriched uranium from Rosatom, Russia.

The third US SMR supplier, Holtec, started by storing nuclear waste, then moved on to decommissioning and dismantling nuclear plants, and then to the storage of radioactive material after dismantling the plants. It has an Indian connection, as its founder, KP Singh, was born in Patna, earned his BE in Dhanbad, and his PhD from the University of Pennsylvania before setting up Holtec. Holtec, unlike the other two, has no experience in designing and manufacturing nuclear plants of any size. However, it now appears to be in pole position in the race to supply a US-made SMR to India, with the US having granted export clearance for a nuclear reactor to India.

None of the US suppliers has yet supplied and commissioned an SMR anywhere in the world. There are only two existing SMRs; one is a floating SMR built in Pevek, Russia's Far East, specifically to support supplying electricity to a remote area. The other is a 210 MW demonstration project at the Shidaowan Bay, in Shandong province, China. A third is being built in Argentina, CAREM SMR, which is again facing serious cost and time overruns for its 25 MW pilot project. While the first has a clear geographical requirement for an SMR, the Chinese and Argentinian projects appeared to be experiments in scaling down nuclear reactors. As of now, the results are not particularly positive. A review by the Institute for Energy Economics and Financial Analysis (IEEFA) report on SMRs last year (covered in these columns: Why is India Going Back to Failed US Nuclear Suppliers, Peoples Democracy, February 23, 2025) shows that the US SMRs also replicate the problems of the US nuclear industry of repeated cost and time overruns.

Yes, there are countries that are capable of building nuclear plants. They are Russia, China, South Korea and India. There is absolutely no techno-economic reason why India should give up its indigenous capacity after it scaled up the original Candu Pressurised Water Reactors from 220 MW to 700 MW based on entirely indigenous designs and suppliers. If we want smaller modular reactors, Nuclear Power Corporation, BARC and the suppliers: BHEL, Larsen Toubro, Bharat Forge, Bharat Heavy Plates Vessels (now a part of BHEL), are more than capable of meeting the needs of either scaling up or down our existing nuclear reactors. We also have the PWR technology for 1000 MW units in the Russian-supplied Koodankulam plant, where two units are running with high availability.

Why then are we running after companies and countries that are currently way behind us in nuclear plant technology and with no proven track record? Like Holtec's SMRs? Yes, the US had advanced technology once upon a time, but that time has long gone. Most of the people who built the US nuclear plants are either dead or long retired. Are we trying to tie up with US companies really for their technology? Or to meet Trump's demands of tribute from countries, friend or foe. In fact, in Trump's trade regime, friends fare much worse than competitors. Any bully will tell you the logic of extortion is to go after softer targets, and that seems to be Trump's "philosophy" too.

Why is it that, with our depth in the nuclear industry, decades of self-reliance, and Indian companies that have shown capability and brought us where we are today, we want to bring in untested technology, that too at high costs and risks to our people? Why do we want to dismantle the liability regime for a sector which everybody accepts is hazardous? Have we not learned a bitter lesson from the Bhopal Gas Tragedy on how to deal with hazardous industries?