The Modi government is actively considering a historic shift in India’s nuclear power policy by allowing private sector participation, a move that would require significant amendments to existing laws and regulatory frameworks. Currently, India’s nuclear power sector is exclusively operated by public sector entities, primarily the Nuclear Power Corporation of India Limited (NPCIL), which manages plants contributing 8.7 GW to the national energy mix.

Legislative And Regulatory Changes

To facilitate private entry, the government is mulling amendments to the Atomic Energy Act, which currently restricts nuclear power generation to government agencies. Additionally, changes to the Civil Liability for Nuclear Damage Act are under discussion, specifically to limit the liability imposed on equipment suppliers and operators in the event of a nuclear incident. This liability regime has long been cited as a major deterrent for both domestic and foreign private investment, as its provisions were seen as overly stringent and inconsistent with international norms such as the Convention for Supplementary Compensation for Nuclear Damage.

The government is also considering regulatory reforms inspired by the Indian National Space Promotion and Authorization Center (INSPACe), which successfully opened the space sector to private players in 2020. A similar model could be adopted for nuclear regulation to both promote and oversee private participation.

Strategic Targets And Initiatives

India has set an ambitious target of achieving 100 GW of nuclear power capacity by 2047, a significant leap from the current 8,180 MW. To meet this goal, the government expects about half of the new capacity to come through Public-Private Partnerships (PPP). The recently announced Nuclear Energy Mission, with an outlay of ₹20,000 crore, aims to support research, development, and deployment of Small Modular Reactors (SMRs), including operationalizing five indigenously developed SMRs by 2033. NPCIL has already invited proposals from Indian industries to set up 220 MW Bharat Small Reactors (BSR) for captive use, signalling a concrete step toward private sector involvement.

Investment And Financial Models

A parliamentary panel has recommended the creation of robust financial models to attract both domestic and foreign investment. Suggested incentives include Viability Gap Funding (VGF), sovereign guarantees, and other government-backed support mechanisms to mitigate risks and encourage private participation.

Rationale And Implications

The push for private sector involvement is driven by several factors:

Faster Capacity Expansion: Private investment is expected to bridge funding gaps and accelerate project timelines.
Technological Advancement: Collaboration with private and foreign firms can bring in cutting-edge technology and operational expertise.
Cost Efficiency: Competitive bidding and private sector discipline could help reduce costs and project delays.
Energy Security: Scaling up nuclear power will help India reduce reliance on fossil fuels and meet its clean energy targets.

Challenges And Concerns

Despite the potential benefits, several challenges remain:

Regulatory Hurdles: Legal amendments are essential to enable private participation.
High Capital Requirements: Nuclear projects demand large, long-term investments.
Liability And Safety: Ensuring robust safety protocols and a balanced liability regime is crucial for public acceptance and investor confidence.

Conclusion

If implemented, these reforms would mark a paradigm shift in India’s nuclear energy landscape, potentially unlocking significant private and foreign investment and helping the country achieve its ambitious energy and climate goals. The success of this initiative will depend on the timely enactment of legislative amendments, creation of a supportive regulatory environment, and effective risk-sharing mechanisms between the public and private sectors.

Agencies