Reforming Civil Liability for Nuclear Damage Act, 2010 | 17 Jun 2025

Source: TH

Why in News? 

India is considering easing Civil Liability for Nuclear Damage Act, 2010 (CLNDA 2010) to reduce accident-related penalties on suppliers, addressing foreign firms’ concerns over unlimited liability. The step aims to revive stalled nuclear projects and advance India’s clean energy targets.

What is Civil Liability for Nuclear Damage Act, 2010? 

• About: The Civil Liability for Nuclear Damage Act (CLNDA), 2010 is India’s nuclear liability law ensuring compensation for victims and defining responsibility for nuclear accidents. 
  • It aligns with the Convention on Supplementary Compensation (CSC, 1997), adopted post-Chernobyl to set global minimum compensation standards; India ratified CSC in 2016. 
    • It follows the nuclear liability principles of the Vienna Convention 1963, Paris Convention 1960, and Brussels Supplementary Convention 1963. 
  • The Act imposes strict, no-fault liability on operators, caps operator liability at Rs 1,500 crore.  
    • If damage claims exceed Rs 1,500 crore, the CLNDA expects the government to intervene.  
    • The government's liability is capped at the rupee equivalent of 300 million Special Drawing Rights (SDRs), roughly Rs 2,100 to Rs 2,300 crore. 
  • The Act also establishes a Nuclear Damage Claims Commission to ensure fair compensation and resolve conflicts. 
• Supplier Liability: India’s CLNDA is unique as it introduces supplier liability under Section 17(b), enabling operators to seek recourse against suppliers—unlike global frameworks like the CSC, which place liability solely on the operator. 
  • Unlike CSC, which allows recourse only for contractual breaches or intentional acts, CLNDA broadens supplier accountability to cases where a nuclear incident results from a supplier’s or their employee’s act, including the supply of defective equipment, materials, or sub-standard services.

What are the Key Concerns Regarding the Civil Liability for Nuclear Damage Act, 2010? 

• Supplier Liability Concerns: Foreign and domestic suppliers fear unlimited liability due to unclear insurance rules, ambiguous “nuclear damage” definition, and the risk of civil suits under Section 46 of CLNDA.  
  • While the government claims alignment with CSC, experts note that Section 17(b) still exposes suppliers to lawsuits for defective equipment or intentional acts, deepening liability concerns. 
• Deterring Foreign Investment in India’s Nuclear Sector: India’s nuclear liability laws were initially seen as an obstacle to the implementation of nuclear deals with countries like the United States.  
  • Critics argue that the liability clauses and restrictions may hinder foreign investments and collaborations in the nuclear energy sector, especially when compared to international frameworks like the Convention on Supplementary Compensation for Nuclear Damage (CSC), which has broader provisions. 
• Challenges to India’s Clean Energy Goals: The CLNDA 2010 liability clause has hurt investor confidence, created uncertainty, and slowed nuclear energy growth in India, crucial for the 500 GW non-fossil fuel target by 2030.  
  • With nuclear power contributing just 3% of total power, delays in projects like Jaitapur (9.6 GW) are hindering decarbonization efforts.

What Measures can be Adopted to Revamp Civil Liability for Nuclear Damage (CLND) Act, 2010? 

• Legislative Reforms: Amend Section 17(b) to limit supplier liability to cases of intentional wrongdoing or gross negligence, aligning it more closely with international norms. This would help alleviate concerns over unlimited liability and encourage foreign suppliers to participate in the nuclear sector. 
  • Also, amend the Atomic Energy Act to enable private sector participation, especially in Small Modular Reactors (SMRs). 
• Financial Safeguards:, and create an international insurance consortium to address supplier liability concerns. 
  • Additionally, explore alternative funding models like nuclear risk-sharing funds to reduce the burden on taxpayers. 
• Diplomatic & Bilateral Solutions: India could sign intergovernmental agreements (IGAs) with key partners (US, France, Japan) to clarify liability terms and set up a dispute resolution mechanism for cross-border claims, while using diplomatic assurances to revive stalled projects like Jaitapur and Kovvada. 
• Strengthening Regulatory & Safety Framework: Strengthen the role of independent regulatory bodies like the Atomic Energy Regulatory Board (AERB) to ensure rigorous oversight of nuclear safety, operations, and adherence to standards and mandate third-party safety audits for all nuclear plants to ensure stringent safety standards. 
  • Fast-track nuclear disaster response protocols to strengthen public confidence in nuclear energy. 
• Offer Financial Incentives to Encourage Investment: Provide tax incentives and subsidies for nuclear energy investments with risk mitigation measures to boost private participation and accelerate nuclear power growth in India. 
  • Consider introducing low-interest loans or grants for nuclear power projects to ensure that the costs of insurance and risk management don’t deter investments. 

Conclusion

It is high time that India must reform the Civil Liability for Nuclear Damage (CLND) Act, 2010 to align with global nuclear liability norms, easing supplier concerns while ensuring victim compensation. By expanding insurance pools, and strengthening bilateral agreements, India can revive stalled projects, attract foreign investment, and advance its clean energy goals without compromising safety or accountability.