India-U.S. Civil Nuclear Agreement

 

1. The Indian government aims to develop 100 GW of nuclear energy by 2047 through amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act.
2. The United States recently removed three Indian nuclear entities from its Entity List, which restricts trade with foreign entities deemed a national security risk.
   1. The removed entities include:
      1. Bhabha Atomic Research Centre (BARC)
      2. Indira Gandhi Atomic Research Centre (IGCAR)
      3. Indian Rare Earths (IRE)
3. Significance of Removal: Paves the way for implementing the long-pending U.S.-India Agreement Concerning Peaceful Uses of Nuclear Energy (123 Agreement).
    

Overview of the India-U.S. Civil Nuclear Agreement
 

Background
 

1. 1974: India conducted its first nuclear test, leading to U.S. sanctions.
2. 2005: India and the U.S. agreed on civil nuclear cooperation.
3. 2008: The U.S.-India Civil Nuclear Agreement, also called the 123 Agreement, was finalized under Section 123 of the U.S. Atomic Energy Act.
    

Key Provisions
 

1. IAEA Safeguards: India permanently placed its civilian nuclear reactors under International Atomic Energy Agency (IAEA) safeguards and signed an Additional Protocol allowing enhanced IAEA inspections.
2. Nuclear Testing & Security: India adopted a voluntary moratorium on nuclear testing and strengthened the security of its nuclear arsenal.
3. U.S. Collaboration: The agreement allowed U.S. companies to build nuclear reactors in India and supply nuclear fuel for its civilian energy program.
4. NSG Waiver: India, despite not being a signatory to the Non-Proliferation Treaty (NPT), received a waiver from the Nuclear Suppliers Group (NSG), enabling nuclear trade.

 

Significance of the Agreement
 

1. Ended India's Nuclear Isolation: Lifted a three-decade U.S. ban on nuclear trade with India.
2. Recognition of India's Nuclear Status: India gained de facto recognition as a nuclear power, allowing it to maintain its nuclear weapons program while accessing international nuclear fuel and technology.
   1. Enabled agreements with France, Russia, the UK, Japan, and Canada for peaceful nuclear projects like Jaitapur and Kudankulam.
3. Strengthened India-U.S. Strategic Partnership: The deal marked a shift from strained relations to a comprehensive strategic alliance.
4. Enhanced Domestic Energy Security: Allowed India to improve reactor efficiency from 50-55% (2006-07) to 80%, supported by uranium import agreements with France, Kazakhstan, Australia, Canada, and Russia.
5. Entry into Global Export Control Regimes: Post-2008, India joined:
   1. Missile Technology Control Regime (MTCR) (2016)
   2. Wassenaar Arrangement (2017)
   3. Australia Group (2018)

 

Challenges in Implementing the Agreement
 

1. Civil Liability Law Issues: India's Civil Liability for Nuclear Damage (CLND) Act, 2010, conflicts with global norms.
   1. Section 17B of CLND Act: Allows Nuclear Power Corporation of India Limited (NPCIL) to claim compensation from suppliers in case of accidents, deterring foreign investment.
   2. Supreme Court Verdict (2010): Reinforced supplier liability, influenced by the Bhopal Gas Tragedy, discouraging private sector participation.
2. Commercial Viability Issues: The bankruptcy of Westinghouse (2017) delayed the planned six AP1000 nuclear reactors in Kovvada, Andhra Pradesh.
3. High Capital Costs: Nuclear energy remains more expensive compared to solar and wind energy, reducing its attractiveness.
    

Key Features of India’s CLND Act, 2010 Operator Liability: Strict liability is exclusively assigned to the nuclear plant operator (NPCIL). Supplier’s Right of Recourse: Section 17 allows NPCIL to seek compensation from suppliers for defective equipment. Alignment with CSC: The CLND Act complies with the Convention on Supplementary Compensation, enabling India to participate in international nuclear trade. Insurance Mechanism: The Indian Nuclear Insurance Pool (₹1,500 crore) provides risk coverage to operators and suppliers. Non-Retrospective Application: Future amendments to liability limits will not affect existing contracts, ensuring stability for suppliers.

 

Way Forward to Operationalize the Agreement
 

1. Amend the CLND Act: Align Indian liability laws with the Convention on Supplementary Compensation (CSC) by shifting liability solely to the operator.
2. Intergovernmental Liability Agreement: India and the U.S. should establish a formal agreement clarifying the limited liability of private U.S. companies.
3. Fully Implement the Insurance Pool: The ₹1,500 crore Indian Nuclear Insurance Pool should be expanded to provide financial protection to both operators and suppliers.

 

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