The Aakhya Weekly #150 | Awakening the Atom in India
In Focus: Fission Funds - India’s Nuclear Vision
Image Source: Petr Pavlicek / IAEA
With the unveiling of the new Union Budget of 2025-26 back in February, the Indian government signaled an ambitious push toward nuclear energy—a strategic shift aimed at advancing the vision of Viksit Bharat, or a self-reliant India.
At the heart of this mission lies a bold goal: to scale up nuclear power generation capacity to 40 GW by 2035 and a staggering 100 GW by 2047, a substantial leap from the current 8 GW.
However, as promising as this vision is, the road ahead is anything but smooth—chief among the hurdles being funding. Nuclear power projects are notoriously capital-intensive. A single 700 MW Pressurized Heavy Water Reactor (PHWR) can cost anywhere from ₹15,000 to ₹20,000 crore. Even Small Modular Reactors (SMRs)—despite being marketed as leaner and more scalable—demand hefty upfront investments due to newer technology and complex regulatory frameworks.
To put things in perspective, the Department of Atomic Energy’s (DAE) total budget allocation for 2025–26 stands at ₹37,482.93 crore. That sum must stretch across research institutions, operational expenses, reactor maintenance, and new construction. Clearly, relying on public funding alone would be an exercise in fiscal fantasy and leaving execution to the public sector risks delays, cost overruns, and inefficiency. For instance, Kudankulam Nuclear Power Plant, conceptualized in 1988, saw Unit 1 operational only by 2013, with costs escalating from ₹13,171 crore to over ₹22,000 crore.
Acknowledging these limitations, the Union Budget has also proposed amendments to two cornerstone legislations: the Atomic Energy Act of 1962—which governs the development and control of atomic energy in India—and the Civil Liability for Nuclear Damage Act of 2010 (CLNDA), which outlines the liability framework in the event of a nuclear incident. These amendments are poised to open the gates to private sector participation and Foreign Direct Investment (FDI) in India’s tightly controlled civilian nuclear sector.
This sets the stage for a dual strategic shift:
Encouraging FDI: By easing regulatory barriers that have historically discouraged foreign players, India aims to attract global investment and cutting-edge technology. The hope is to diversify funding sources and accelerate technical sophistication, both of which are essential for meeting long-term energy goals.
Promoting SMRs: Small Modular Reactors offer numerous advantages: faster deployment timelines, modular scalability, and potentially lower safety and environmental risks. By prioritizing SMRs, India can decentralize its energy production and bring nuclear power to areas where large-scale reactors would be impractical.
Still, the success of this push hinges on several variables: how quickly the legislative changes are enacted, how global investors respond, and how well India manages issues of safety, liability, and public trust.
Ownership: Who Holds the Core?
Another looming issue in this evolving nuclear landscape is ownership and control. With private players and FDI entering the fray, the question arises: who will ultimately own and operate these reactors—especially in a domain as sensitive as nuclear energy?
Currently, the sector sits on a practically negative list for FDI—foreign participation is heavily restricted, if not outright prohibited. However, proposed amendments to the Atomic Energy Act seek to change this by introducing a 26% FDI cap, with potential for an increase to 49% after further review. This ownership framework is designed to walk a tightrope: it enables India to draw in foreign capital and expertise, essential for scaling up PHWRs and SMRs, while safeguarding national security, regulatory control, and strategic autonomy. Operational elements like reactor safety, maintenance, crisis response, and majority ownership would remain with Indian entities in any joint venture.
Moreover, limited privatization is expected to help tackle the inefficiencies that have long plagued India’s public sector-led nuclear initiatives. With private participation comes heightened accountability, streamlined timelines, and hopefully better risk management.
In short, this isn't about handing over the keys; it's about co-driving the car while still holding the steering wheel.
Liability: The Final Frontier
Perhaps the most crucial—and delicate—part of India’s nuclear reform puzzle lies in addressing liability and responsibility. Amendments to both the CLNDA and the Atomic Energy Act tackle three key dimensions: operator liability, supplier accountability, and government indemnification.
While no formal legislation has been introduced, policy discussions indicate growing recognition that the current framework may require updates to support emerging technologies like Small Modular Reactors (SMRs) and ensure financial viability for investors.
The key areas reportedly under consideration include:
Retaining strict and no-fault operator liability while adjusting financial caps based on reactor size or type.
Developing new insurance mechanisms with domestic providers to improve compensation coverage.
Reviewing liability duration in light of long-term radiation risks.
Supplier liability is another area which is also seeing reforms being discussed. The concerns over open-ended legal exposure which have long deterred foreign suppliers are being taken into consideration. The government is said to be exploring legal and contractual clarifications to balance accountability with investor confidence, potentially through standardized contractual terms.
On government indemnification and liability pooling, India is reportedly evaluating a layered approach inspired by international models such as the U.S. Price-Anderson Act. This could involve a mix of operator insurance, a government-backed fund, and international reinsurance.
In terms of dispute resolution and victim compensation, the creation of a dedicated nuclear claims tribunal is being explored to enable faster adjudication.
Regulatory Realignment and Global Integration
The Atomic Energy Regulation Board (AERB) will be equipped to audit foreign suppliers, certify insurance-worthiness, and enforce differentiated safety protocols. India has also ratified the Convention on Supplementary Compensation (CSC) which ensures that a minimum amount of compensation is available at the national level in the event of a nuclear incident.
If this national amount proves insufficient, the CSC also provides access to an international fund contributed by other member countries, helping to cover the remaining damages. Though India did make certain key reservations to protect Indian jurisdiction and limit CSC fund access to member states.
However, as the proposed changes remain under deliberation, the existing provisions of the Civil Liability for Nuclear Damage Act, 2010, continue to govern India’s nuclear liability framework.
Challenges and the Road Ahead
Despite ongoing progress in efforts to reform India’s nuclear liability framework, several challenges persist. Public safety concerns, slow bureaucratic processes, and difficulties in aligning with global frameworks continue to pose obstacles. At the same time, limitations within India’s insurance sector hinder its ability to fully support liability pools for nuclear incidents.
Yet, for all the caveats, the momentum is real.
India’s nuclear sector has long been a story of promise delayed by policy gridlock. But now, with bold legislative shifts, diversified investment channels, and a clearer liability regime, we may finally be on the cusp of transformation. And if all goes to plan, by 2047, India won’t just be celebrating a century of independence—it might also be lighting it up with a hundred gigawatts of homegrown nuclear power.
Top Stories of the Week
Himachal’s Refund Scheme Turns Plastic into Payback
Himachal Pradesh Cabinet has launched the pilot project "Deposit Refund Scheme 2025" aimed at managing non-biodegradable waste effectively, particularly in tourist hotspots. Under this initiative, consumers pay a refundable deposit on products packaged in glass bottles, plastic containers, aluminum cans, and multilayered packaging. This deposit is returned upon the consumer’s return of the empty packaging at designated collection centers, incentivising responsible waste disposal. The scheme, monitored through QR codes, seeks to address the pressing issue of plastic pollution in the Himalayan ecology and is expected to abet behavioral change among tourists and vendors alike.
To reinforce the initiative, the state has announced a security fee on plastic use at tourist destinations and imposed a ban on PET bottles below 500ml from June 1. This is the latest in Himachal’s long standing plastic regulation efforts, which began with a 1995 law that made it the first in South East Asia to ban coloured recycled bags, followed by bans on carry bags (2009), cutlery (2011), wrappers (2013), and thermocol (2018).
Delhi Unveils Comprehensive Air Pollution Mitigation Plan 2025
Delhi Chief Minister Rekha Gupta launched the Air Pollution Mitigation Plan 2025 on Tuesday to address the capital’s worsening air quality. Titled ‘Shuddh Hawa Sabka Adhikar – Pradushan Par Zordar Prahar’, the plan outlines targeted interventions across 25 focus areas to make Delhi a “pollution-free” city.
Key measures include the year-round deployment of water sprinklers and anti-smog guns, the installation of 18,000 EV charging stations, and a push for electric autos. To curb vehicular pollution, the Commission for Air Quality Management (CAQM) has mandated that only BS-VI, CNG, and electric vehicles will be allowed entry into Delhi. Automatic Number Plate Recognition (ANPR) cameras at city borders will flag End-of-Life vehicles and issue real-time digital alerts.
To ease traffic congestion, the plan proposes the use of GPS and CCTV-based monitoring. The government also aims to foster innovation through a startup challenge and plans to pilot a cloud seeding project in collaboration with IIT Kanpur.
A Few Good Reads
To realise the goal of Viksit Bharat 2047, the Centre must reduce friction with the states, urges Pranay Kotasthane.
Harsh V Pant and Atul Kumar explain how Operation Sindoor revealed significant shortcomings in the capability and combat reliability of Chinese-made systems.
“Energy is not just a commodity. It is a catalyst for sovereignty, security and sustainable development” writes Union Minister for Petroleum & Natural Gas, Hardeep Singh Puri
Indira Rajaraman argues that India’s booming gig economy has boosted incomes but also exposed urban workers to financial and welfare vulnerabilities that demand targeted policy support
Taking inspiration from the Shillong-Silchar four-lane highway, Swathi Kalyani highlights how geospatial technology can offer a critical advantage in advancing the Kaladan project.