Challenges and Opportunities in Indo-US Nuclear Collaboration

The Indo-US nuclear collaboration has entered a new phase with recent discussions aimed at overcoming legal barriers. The dialogue focuses on enhancing cooperation in nuclear technology and manufacturing. However, challenges remain that could hinder progress.

Legal Barriers to Collaboration

Two primary legal barriers affect Indo-US nuclear cooperation. The first is the US regulation known as ‘10CFR810’. This regulation restricts US nuclear vendors from engaging in manufacturing or design work within India. It allows exports of nuclear equipment but limits deeper collaboration. India seeks to participate in the manufacturing process, which is essential for its nuclear power projects. The second barrier is India’s Civil Liability for Nuclear Damage Act, 2010. This legislation aims to compensate victims of nuclear accidents and assigns liability to equipment suppliers. Foreign companies, including GE-Hitachi and Westinghouse, express concerns over this liability framework. They fear potential financial repercussions that could arise from investing in India’s nuclear sector.

Strategic Interests and the China Angle

The US is keen to boost its strategic alliance with India amid rising competition with China. National Security Advisor Jake Sullivan’s recent visit aimed to strengthen the innovation alliance under the initiative on Critical and Emerging Technology (iCET). A successful agreement could facilitate joint manufacturing of nuclear components. China is actively advancing its capabilities in small modular reactors (SMRs), positioning itself as a leader in this emerging market. India, too, aims to establish itself as a credible destination for SMR manufacturing. The competition with China marks the urgency for India and the US to collaborate on nuclear technology.

Technological Constraints in India

India’s nuclear programme has strengths in manufacturing smaller reactor types, such as the 220MWe Pressurised Heavy Water Reactors (PHWRs). However, its technology is becoming outdated compared to the globally dominant Light Water Reactors (LWRs). The US, Russia, and France lead in LWR technology. India’s challenge lies in upgrading its reactor technology to remain competitive. A collaborative approach is essential. Both India and the US face unique challenges. India struggles with technological limitations, while the US grapples with high labour costs and a protectionist climate. Joint efforts could enhance both nations’ capabilities in the nuclear sector.

Future Prospects for Joint Manufacturing

The potential for joint manufacturing of nuclear components is . With a breakthrough in iCET, India could attract investments and expertise from American firms. This would not only boost India’s nuclear power capacity but also strengthen bilateral ties. Moreover, the collaboration could serve as a counterbalance to China’s ambitions in the nuclear space. By aligning their interests, India and the US can create a robust framework for nuclear cooperation that benefits both countries.

Questions for UPSC:

1. Critically analyse the impact of the Civil Liability for Nuclear Damage Act, 2010 on foreign investments in India’s nuclear sector.
2. What are the strategic implications of the Indo-US nuclear collaboration in the context of China’s growing influence in the Global South?
3. Explain the significance of small modular reactors in the global energy landscape and their potential role in India’s energy policy.
4. What are the challenges faced by India in upgrading its nuclear technology? How can international collaboration mitigate these challenges?

Answer Hints:

1. Critically analyse the impact of the Civil Liability for Nuclear Damage Act, 2010 on foreign investments in India’s nuclear sector.

1. The Act assigns liability to equipment suppliers, raising concerns among foreign investors about financial risks.
2. Foreign companies like GE-Hitachi and Westinghouse cite this liability as a barrier to entering the Indian market.
3. The legislation aims to ensure victim compensation but may deter investment due to perceived legal uncertainties.
4. Potential investors fear that liability could lead to excessive costs and litigation, impacting project viability.
5. A review or amendment of the Act could enhance investor confidence and facilitate foreign participation in India’s nuclear sector.

2. What are the strategic implications of the Indo-US nuclear collaboration in the context of China’s growing influence in the Global South?

1. The collaboration aims to counterbalance China’s expanding influence in nuclear technology and energy in the Global South.
2. Joint manufacturing of nuclear components can strengthen India’s position as a credible player in the nuclear market.
3. The partnership enhances strategic ties between India and the US, reinforcing their geopolitical alignment against China.
4. Collaborative efforts in nuclear technology can serve as a diplomatic tool for both nations in the region.
5. Successful Indo-US collaboration could set a precedent for other countries in the Global South, promoting a multipolar world order.

3. Explain the significance of small modular reactors in the global energy landscape and their potential role in India’s energy policy.

1. SMRs offer flexible, scalable energy solutions, addressing energy demands in a cost-effective manner.
2. They are seen as safer alternatives to traditional large reactors, reducing risks associated with nuclear energy.
3. India aims to leverage SMRs to enhance its energy security and meet growing electricity needs sustainably.
4. Collaboration with the US in SMR technology can boost India’s manufacturing capabilities and expertise.
5. Incorporating SMRs into India’s energy policy aligns with global trends towards cleaner and more efficient energy sources.

4. What are the challenges faced by India in upgrading its nuclear technology? How can international collaboration mitigate these challenges?

1. India’s reliance on outdated Pressurised Heavy Water Reactor (PHWR) technology limits its competitiveness.
2. Access to advanced Light Water Reactor (LWR) technology is hindered by regulatory and liability concerns.
3. High costs of R&D and technological upgrades pose financial challenges for India’s nuclear program.
4. International collaboration can provide access to cutting-edge technology and expertise, facilitating upgrades.
5. Joint ventures with foreign firms can share financial burdens and enhance India’s nuclear capabilities, encouraging innovation.