Nuclear Gamble

Parliament’s passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill marks one of the most consequential shifts in India’s atomic-energy policy since the sector was placed firmly under state control more than six decades ago. By opening nuclear power generation to private companies and dismantling an awkward liability regime, the Narendra Modi-led government says it is finally unshackling a strategic industry weighed down by caution and capital scarcity.

If one considers the case for reform, then India’s nuclear programme has long punched below its theoretical weight. Despite early ambitions, nuclear power accounts for barely 3 percent of the country’s electricity mix. Public-sector dominance, chronic cost overruns and the chilling effect of the Civil Liability for Nuclear Damage Act of 2010 which exposed suppliers to open-ended claims have kept foreign technology providers and domestic investors at bay.

The SHANTI Bill seeks to supply that by allowing any licensed company or joint venture, public or private, to construct, own, operate and even decommission nuclear plants, subject to safety authorisation. It promises a ‘pragmatic’ liability framework by capping operator liability and removing the contentious supplier-liability clause that made India an outlier among nuclear states. In principle, such changes could help integrate India into the global nuclear economy and lower financing costs. Small modular reactors, for instance, may be better suited to private participation than mega public-sector projects.

However, detractors warn that the Bill is a perilous gamble. The sharpest criticism, voiced most eloquently by Congress MP Shashi Tharoor, is that the Bill places extraordinary discretion in the hands of the executive while thinning the guardrails around a technology where failure is unforgiving. By allowing any other person expressly permitted by the central government to operate nuclear facilities, the law relies heavily on regulatory wisdom yet to be demonstrated. India’s nuclear regulator has historically lacked the autonomy and institutional heft enjoyed by its counterparts in mature nuclear economies.

More troubling is the consolidation the Bill permits across the nuclear fuel cycle. A single entity may mine uranium, fabricate fuel, operate reactors and manage waste under a composite licence. This vertical integration may appeal to investors, but it concentrates risk in ways that safety engineers usually strive to avoid. When profit incentives run uninterrupted, the temptation to trim margins on safety will no longer be theoretical. The liability cap sharpens these anxieties. At roughly $460m, it remains unchanged since 2010 and impervious to inflation, technological lessons or disasters such as Fukushima. Victims would be left chasing compensation long after operators have exhausted their statutory obligations. Nor does the Bill fully resolve the contradiction at the heart of India’s nuclear pitch. Uranium reserves are limited and thorium remains a distant promise. The full life cycle of nuclear power - from mining to waste storage - is neither clean nor cheap. India does need nuclear power, and it does need reform. But speed should not be a substitute for scrutiny.