India Sets Stage for Nuclear Power Boom: Liability Laws to Get a Makeover

India plans to revise its nuclear liability laws to limit the penalties equipment suppliers face when dealing with accidents. The goal is to entice foreign investment, particularly from US companies that previously stayed out of India's nuclear market due to unlimited liability concerns. The proposed legislative changes, drafted by Department of Atomic Energy, would eliminate one of the mandatory provisions of the Civil Liability for Nuclear Damage Act of 2010, which currently requires that: "[I]n the event of nuclear incident, the suppliers shall be liable to pay an unlimited number of damages." 

 

The reform of the liability regime is a key aspect of Prime Minister Narendra Modi's vision to scale India's nuclear energy development from two reactors to 100 gigawatts of nuclear capacity by 2047. The proposed changes also align India's liability regime with the international model that recognizes that the operator is ultimately responsible for safety, not the supplier. The amendments are intended to reduce some barriers to investment for major firms, such as General Electric and Westinghouse Electric, who opted not to enter the Indian nuclear market due to fear over legal risk.

 

Under the draft law, the operator's right to indemnity from suppliers after an incident would be capped at the value of the contract and limited to a specified timeframe, essentially modifying the existing law guarantees no limit in either damages or timeline to liability. These changes are expected to revitalize foreign investment that had stalled, and establish an important step forward in negotiating the US-India trade relationship.

 

The government intends to present the amendments to Parliament for approval in July during the summer (monsoon) session.

 

Source: Insurance Journal