By VP Singh | Pradeep S Mehta
The US Department of Energy’s (DoE) approval for an American company to design and build nuclear reactors in India is a welcome move. It will help India achieve its goal of trebling its nuclear energy capacity by 2031-32, strengthening energy security and advancing clean energy commitments to address climate change.
It also reflects India’s diplomatic prowess in a shifting geopolitical landscape and suggests recent administrative changes in the US have not diminished bilateral cooperation. On the contrary, Prime Minister Narendra Modi and President Donald Trump pronounced a joint declaration on February 13, which reinforced prior commitments made on all fronts, including nuclear energy. Given the highly sensitive nature of nuclear technology, the finer details will require utmost vigilance.
The recent approval of Holtec International, a US-based supplier of energy industry equipment and systems, to transfer its small modular reactor (SMR) technology to Indian firms comes against the backdrop of the 2008 India-US Civil Nuclear Agreement. The agreement initially struggled to materialise due to multiple challenges, with the Civil Liability for Nuclear Damage Act (CLNDA) being a major hurdle, as it places liability for nuclear incidents on technology suppliers too. Further, despite receiving a Nuclear Suppliers Group (NSG) waiver under the India-US agreement, India’s non-membership in the group remained a limiting factor.
Now that amendments and measures introduced in the CLNDA over the years have paved the way for nuclear development in India, it is crucial to sustain the momentum by addressing the critical gaps in safety assurance, technology preparedness, and financing strategies.
SMR technology enables reactors to be manufactured in a controlled factory setting rather than being built entirely on-site, helping to address concerns related to cost and timelines. India has recently completed the concept design for its indigenously developed “Bharat Small Modular Reactor”, a 200-megawatt unit based on pressurised water reactor (PWR) technology. This reflects a growing commitment to building domestic capabilities.
In contrast, large-scale nuclear projects like Hinkley Point C and Flamanville 3 have faced significant delays, often taking twice the estimated time to commission and exceeding their budgets two-three times. These challenges reflect the limitations of traditional nuclear power plant construction, reinforcing the potential of SMRs as a more efficient alternative.
Nevertheless, SMRs do not inherently guarantee safety. While CLNDA revisions have somewhat addressed concerns over the initial years of construction and operation, the end-of-life phase demands even greater caution. Decommissioning a nuclear plant is time-consuming and costly, with critical safety challenges like fuel removal and managing radioactive waste.
European countries are facing significant difficulties in this regard. The challenges are so extensive that many ageing nuclear plants are now considering lifetime extensions, a technically demanding and expensive alternative that presents its own set of safety concerns. India must seek technical support not only for the design and construction of nuclear power plants but also for their decommissioning phase, ensuring this aspect is an integral part of agreements with foreign or private developers.
Technology remains a critical consideration. India has traditionally relied on pressurised heavy water reactors and has gradually introduced PWRs — the most widely used globally — with the Kudankulam Nuclear Power Plant in Tamil Nadu. The anticipated deployment of Holtec’s PWR-based SMRs reinforces this trend.
While the adoption of PWR technology enhances India’s nuclear capacity, an over-reliance on imported reactor designs could shift focus from indigenous R&D in advanced nuclear technologies. The recent concept design of the Bharat SMR by scientists at the Bhabha Atomic Research Centre and the Nuclear Power Corporation of India (NPCIL) highlights the country’s potential in technological self-reliance.
India’s long-term strategic interests lie in fast breeder reactors and thorium-based reactors, which align with its three-stage nuclear programme and leverage the country’s thorium reserves — the largest in the world. Ensuring a balanced approach that incorporates PWRs while advancing domestic reactor innovations will be crucial for India’s long-term energy security and technological self-reliance.
Generating electricity from nuclear energy is capital-intensive, with project costs varying significantly. While state-owned agencies such as the NPCIL and NTPC are expected to lead India’s nuclear expansion, allowing private developers to participate would be sensible, and they should be helped in raising investments.
Since nuclear energy will be a key pillar of India’s clean energy transition, integrating it into the climate finance framework could be a strategic move. Given its high costs, innovative financing mechanisms — particularly blended finance — can help unlock its full potential.
As countries worldwide grapple with challenges in maintaining a carbon-neutral trajectory — including geopolitical divides, financing gaps, technological uncertainties, and fragile supply chains — nuclear energy is emerging as an underutilised yet transformative clean energy source. Its potential to advance net-zero ambitions for India and other nations makes it a compelling addition to the global climate agenda, with the possibility of gaining traction in future COP negotiations.
Akash Sharma, associate fellow, CUTS International, contributed to this article.
The writers are respectively former governor, Punjab, and secretary general, CUTS International
This article can also be viewed at:
https://www.financialexpress.com/