India’s Nuclear Liability Law Debate

Why in the News?

1. India is planning to build six nuclear reactors in Jaitapur, Maharashtra.
2. It would become the world’s biggest nuclear power site.
3. This nuclear project has been delayed for more than ten years.
4. The reason is India’s nuclear liability law. The issues with this law must be solved before they can sign a contract.

What are the Key Points on Nuclear Liability Law in India?

1. Background:
   1. Nuclear energy can be used for many peaceful and useful purposes.
   2. However, sometimes major nuclear accidents can happen at nuclear sites.
   3. Many parties are involved in nuclear projects such as:
      1. Suppliers
      2. Operators
      3. Contractors
      4. Government agencies
      5. Global organizations
   4. When an accident happens, it becomes difficult to decide who is responsible and how much liability each party holds.
   5. In 1986, a major accident called the Chernobyl disaster occurred in the USSR (present-day Ukraine).
   6. After this disaster, the global community felt the need for a proper system to handle nuclear liability.
   7. So, the Convention on Supplementary Compensation (CSC) was introduced in 1997.
   8. India passed its own nuclear liability law called the Civil Liability for Nuclear Damage Act (CLNDA) in 2010.
   1. India signed the CSC in 2010.
   10. India ratified the CSC later in 2016.

Who is the operator? The operator is the company responsible for running the nuclear power plant. In India, the Nuclear Power Corporation of India Limited (NPCIL) is the operator for all civilian nuclear reactors. Who is the supplier? The supplier is the company or agency that provides nuclear equipment, parts, technology, or fuel. For the Jaitapur project, the supplier is Électricité de France (EDF), the French energy company. EDF will supply nuclear technology and equipment.   Who is the Contractor? The contractor is the company or group that carries out the construction and engineering work for the nuclear project. In many cases, the contractor is also the supplier or works closely with the supplier. For Jaitapur, EDF (supplier) will also act as a main contractor, while local Indian companies may also be involved as subcontractors under NPCIL’s coordination. So, in Summary: Operator: NPCIL (India) Supplier: EDF (France) Contractor: EDF (main contractor) + Indian sub-contractors under NPCIL's guidance.

 

Year	Event
1986	Chernobyl nuclear disaster; led to strengthening of international nuclear liability norms.
1997	Convention on Supplementary Compensation (CSC) adopted globally.
2009	India and Areva (now EDF) signed an initial MoU for Jaitapur nuclear power project.
2010	India signed the CSC.
2010	India passed the Civil Liability for Nuclear Damage Act (CLNDA).
2016	India ratified the CSC.
2016	Revised MoU signed between NPCIL and EDF for Jaitapur project.
2018	“Industrial Way Forward” agreement signed in presence of PM Modi and President Macron.
2020	EDF submitted a techno-commercial offer for Jaitapur project.
2025	Project remains on hold due to unresolved issues with nuclear liability law.

 

2. International Framework:
   1. Convention on Supplementary Compensation (CSC), 1997:
      1. Introduced after the 1986 Chernobyl disaster to enhance global nuclear liability rules.
      2. Sets a minimum national compensation amount and allows for additional public funds from CSC member countries.
      3. India signed the Convention on Supplementary Compensation (CSC) in 2010 and ratified it in 2016.
3. Domestic Law:
   1. Civil Liability for Nuclear Damage Act (CLNDA), 2010:
      1. Enacted to align with international standards and ensure quick compensation for victims of nuclear incidents.
      2. Establishes strict and no-fault liability on the operator, meaning the operator is liable regardless of fault.
      3. The operator’s liability is capped at ₹1,500 crore, which must be covered through insurance or other financial security.
      4. If the compensation exceeds ₹1,500 crore, the central government is liable for up to 300 million Special Drawing Rights (SDRs), approximately ₹2,100–₹2,300 crore.
      5. Specifies time limits and caps on the amount for claiming compensation.
4. Current Status of Nuclear Infrastructure in India:
   1. India has 22 nuclear reactors currently in operation.
   2. All existing reactors are operated by the state-run Nuclear Power Corporation of India Limited (NPCIL).
   3. Over a dozen more nuclear power projects are planned.
5. International Norm: Operator-Only Liability:
   1. Global civil nuclear liability laws, including the CSC (Convention on Supplementary Compensation), are based on the principle of exclusive liability of the operator.
   2. The aim was to avoid:
      1. Excessive liability claims on suppliers that could hinder the nuclear industry.
      2. Legal complications from involving multiple entities.
      3. The burden of separate insurance for suppliers and contractors.
6. CSC Conditions for Supplier Liability:
   1. As per Section 10 of the CSC, the operator can claim recourse from the supplier only in two cases:
      1. If it is explicitly agreed upon in the contract.
      2. If the incident results from an intentional act or omission to cause damage.
7. India’s Deviation: Introducing Supplier Liability:
   1. India’s CLNDA (2010) added a third condition, going beyond the CSC framework.
   2. Section 17(b) of the CLNDA allows the operator the right of recourse.
8. Rationale Behind India’s Approach:
   1. Inspired by past industrial disasters, notably the Bhopal gas tragedy (1984).
   2. The law aims to ensure accountability of suppliers for defective equipment or negligence.
9. India’s Law is Unique Globally:
   1. India is the only country where suppliers can be held liable for nuclear damage under domestic law (CLNDA).
   2. This is contrary to the international norm, where only the operator bears liability.
10. Supplier Concerns:
    1. Fear of unlimited liability under CLNDA discourages both foreign and domestic suppliers.
    2. Ambiguity in insurance requirements for suppliers adds to business uncertainty and risk.
11. Controversial Provisions
    1. Section 17(b): Allows the operator to claim recourse from suppliers for:
       1. Defective equipment or services.
       2. Acts of supplier or employees leading to nuclear incidents.
    2. Section 46:
       1. States that other legal proceedings (civil/criminal) outside CLNDA are not barred.
       2. Lacks a clear definition of "nuclear damage", creating room for civil tort claims against suppliers.
    3. This means that while the operator's liability is capped, supplier liability remains potentially unlimited.
12. Legal and Business Risks:
    1. Section 46 undermines the core idea of the CLNDA: channeling liability solely to the operator for quick victim compensation.
    2. Opens the door for litigation under other civil laws, making suppliers vulnerable to multiple and unlimited claims.
13. Government’s Official Position
    1. The government asserts that India’s CLNDA is consistent with the Convention on Supplementary Compensation (CSC).
    2. It maintains that Section 17(b) of the CLNDA only permits the operator (e.g., NPCIL) to seek recourse from the supplier — it does not mandate this action.
    3. Therefore, inclusion of supplier liability in contracts is optional, not compulsory.
14. Legal Expert Interpretation:
    1. Legal experts argue that Section 17(a), (b), and (c) are separate and standalone clauses.
    2. Even if Section 17(a) (contractual right of recourse) is not invoked, suppliers can still be liable under 17(b) (for defective goods/services) or 17(c) (intent to cause damage).
    3. Hence, the right of recourse exists independently of the contract, increasing the risk for suppliers.
15. Public Policy Concern:
    1. Experts say it would be unsound public policy for NPCIL to waive its right of recourse, since the law explicitly provides for such a right.
    2. Such a waiver might go against the spirit and intent of the legislation.
16. Interpretation in Legal Proceedings:
    1. The government references Parliamentary debates to argue that supplier liability through class-action suits was rejected.
    2. However, legal experts clarify that court judgments are based on the statute’s text, not on Parliamentary debates or intent.
17. Impact on Nuclear Projects
    1. The supplier liability issue has stalled key projects like the Jaitapur nuclear power project, intended to be the world’s largest nuclear power generation site.
    2. Government has committed to resolving the liability law concerns before the French President’s rescheduled visit in September, 2025 (originally March, 2025).

What are the Significances of India’s Nuclear Liability Law?

1. Victim-Centric Approach: Ensures prompt compensation to victims of nuclear incidents, reflecting lessons from past industrial disasters like Bhopal.
2. Deterrence and Accountability: Makes suppliers accountable for equipment quality, promoting higher safety standards in the nuclear supply chain.
3. Unique Domestic Safeguard: India is the only country with supplier liability built into its nuclear law, offering an extra layer of safety regulation.
4. Public Confidence: Builds trust among the population by showing commitment to safety, transparency, and justice in case of accidents.
5. Strategic Leverage:  Demonstrates India's independent legal and ethical stance in international nuclear partnerships and agreements.

What are the Challenges and Way Forward?

Challenges	Way Forward
1. Supplier Aversion: Foreign and private suppliers are unwilling to participate due to fear of unlimited liability.	1. Clarify the interpretation of Section 17(b) as permissive, not mandatory, through official guidelines.
2. Legal Ambiguity: Section 46 allows for the possibility of civil/criminal cases outside CLNDA, increasing legal uncertainty.	2. Amend or clarify Section 46 to ensure exclusive jurisdiction of CLNDA in nuclear liability cases.
3. Insurance Complications: Lack of clear insurance mechanisms for suppliers creates financial risk.	3. Operationalize a nuclear insurance pool with government backing for suppliers.
4. International Hesitation: Laws not aligned with global norms hinder agreements with countries like France and the USA.	4. Harmonize domestic law with the Convention on Supplementary Compensation (CSC) while protecting Indian interests.
5. Delay in Projects: Legal concerns have delayed critical infrastructure like the Jaitapur plant.	5. Set up a joint legal-technical working group with stakeholders to fast-track consensus and project clearances.
6. Judicial Interpretation Risks: Courts may interpret the law based on statutory text, not parliamentary intent.	6. Introduce explanatory amendments or clarifications via Rules under the CLNDA to reduce interpretation risks.
7. Public Policy Dilemma: NPCIL waiving recourse might conflict with legislative intent and public interest.	7. Frame clear policy on when recourse can be waived and how it aligns with public safety and legal compliance.

 

What is the Nuclear Insurance Pool? The Nuclear Insurance Pool is a special insurance arrangement created to help cover the financial risks involved in operating nuclear power plants in India. Why Was It Created? India's Civil Liability for Nuclear Damage Act (CLNDA), 2010 says that: The operator (NPCIL) must pay up to ₹1,500 crore if there’s a nuclear accident. To manage this risk, the operator needs insurance or financial security. Since normal insurance companies are not willing to take on such high and risky liabilities alone, a Nuclear Insurance Pool was created. Who Manages It? The Indian Nuclear Insurance Pool (INIP) was set up in 2015. It is managed by the General Insurance Corporation of India along with 11 other Indian insurance companies. The total insurance capacity of the pool is around ₹1,500 crore which matches the liability cap under the CLNDA. What Does It Cover? Operator's Liability – Covers the ₹1,500 crore liability of NPCIL as per the CLNDA. Supplier’s Risk:  A separate cover is offered to suppliers who are worried about Section 17(b) (in case faulty equipment causes damage). Why Is It Important? It gives financial protection to both operators and suppliers. It encourages private and foreign companies to participate in India’s nuclear energy sector. It is a key step in making sure India follows its own law while also building confidence among global partners like France.

 

Conclusion

India’s nuclear liability law reflects a strong commitment to public safety, justice for victims, and accountability in the nuclear energy sector. While its unique provisions, such as supplier liability, offer enhanced safeguards, they have also created legal and commercial challenges that hinder international collaboration and delay critical projects like Jaitapur. Balancing domestic concerns with global best practices is essential. A clear, transparent, and harmonized framework, one that protects both public interest and encourages private participation is the way forward for India’s clean energy future and global nuclear partnerships.

Ensure IAS Mains Question: Q. India’s Civil Liability for Nuclear Damage Act (CLNDA), 2010 seeks to ensure accountability and victim compensation but has also created hurdles for nuclear energy expansion. Critically examine the key provisions, challenges, and the way forward in aligning domestic law with international norms. (250 words)

 

Ensure IAS Prelim Question: Q. With reference to India’s Civil Liability for Nuclear Damage Act (CLNDA), 2010, consider the following statements: It establishes a no-fault liability on the operator of nuclear plants. The Act allows the operator to claim recourse against suppliers in all circumstances. India is a signatory to the Convention on Supplementary Compensation (CSC). Section 46 of the Act prevents any legal action outside the scope of CLNDA. Which of the statements given above is/are correct? 1 and 3 only 2 and 4 only 1, 2 and 3 only 1, 3 and 4 only Answer: a Explanation: Statement 1 is correct: The CLNDA establishes a strict and no-fault liability on the operator. Statement 2 is incorrect: The operator can claim recourse only in limited cases, not all circumstances. Statement 3 is correct: India is a signatory and ratified the CSC in 2016. Statement 4 is incorrect: Section 46 does not bar other legal actions, which is a point of controversy.

 

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