India to Set Up Nuclear Liability Fund to Boost Private and Foreign Investment
India is preparing to establish a nuclear liability fund aimed at covering accident compensation beyond the current cap of ₹15 billion ($169 million) for plant operators. This move is designed to address concerns about risk-sharing among global suppliers and private companies, according to two government sources.
The planned fund is part of a broader strategy to attract investment into India’s nuclear sector. It aligns the country’s compensation system with international standards, making the industry more appealing to foreign and private investors.
Proposed Bill to Overhaul Nuclear Liability Framework
The new fund will be introduced through a proposed atomic energy bill. Unlike the existing system, which handles compensation on an ad hoc basis, the statutory fund will offer a structured method for handling claims that exceed the operator’s capped liability.
One of the sources stated that the fund will “bolster the government’s ability to compensate victims in the event of an accident.” The final details of the bill are still being drafted and are expected to be presented during the winter session of Parliament in December.
Government departments, including the Atomic Energy Department, the Prime Minister’s Office, and the Finance Ministry, have yet to comment on the proposal.
Opening the Door for Private Players and Global Suppliers
India aims to increase its nuclear power capacity 12-fold by 2047. To support this goal, the government is easing restrictions that have long limited private involvement. This includes relaxing a rule that held suppliers indefinitely liable for nuclear accidents.
Major Indian conglomerates such as Tata Power, Adani Power, and Reliance Industries are already preparing investment plans in anticipation of the policy changes.
The proposed legislation will allow private firms to enter the fields of atomic power generation and uranium mining. It will also enable foreign companies to hold minority stakes in nuclear plants.
New Fund to Replace Current Insurance Pool
Currently, India depends on a nuclear insurance pool set up in 2015. Although this pool was meant to support the 2010 Civil Liability for Nuclear Damage Act, it did not gain the confidence of foreign firms, particularly those from France and the US.
The upcoming bill seeks to replace both the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010. By establishing a legal fund for compensation, the government hopes to provide clarity and assurance for both investors and victims of nuclear accidents.
with inputs from Reuters