India-US 123 Agreement: Unlocking Full Potential Through Legislative Amendments

Sub : Sci

Sec: Nuclear sector

Why in News

India has committed to legislative amendments and sought a crucial exemption from the United States, which could facilitate the deployment of US-designed nuclear reactors and Small Modular Reactors (SMRs) in India. This move aims to fully realize the India-US 123 Civil Nuclear Agreement signed in 2007.

India-US Civil Nuclear Cooperation:

India and the US reaffirmed their commitment to deepening energy security cooperation, positioning Washington as a key supplier of oil and gas to India.
The agreement is seen as a step towards bridging the trade deficit between the two nations.
More importantly, both sides have pledged to fully implement the India-US 123 Civil Nuclear Agreement by fostering collaboration on nuclear reactor deployment in India.

Proposed Legislative Amendments in India:

Atomic Energy Act, 1962:The proposed amendments aim to allow private sector participation in nuclear power plant operations.
- Currently, only state-owned Nuclear Power Corporation of India Ltd (NPCIL) and its joint ventures with NTPC Ltd and NALCO are authorized to operate nuclear power plants.
- The amendments would enable private firms to enter the SMR sector, enhancing domestic nuclear infrastructure.
Civil Liability for Nuclear Damage Act, 2010 (CLNDA):Originally designed to compensate victims in case of a nuclear accident, CLNDA assigns liability to equipment suppliers, discouraging foreign investment.
- Companies like GE-Hitachi, Westinghouse, and France’s Areva (now Framatome) have been reluctant to participate due to liability concerns.
- Bilateral arrangements under CLNDA are being explored to address these concerns and facilitate US-India nuclear industry collaboration.
Refer: India’s Nuclear Energy Mission

About India-US 123 Agreement:

Indian Prime Minister Manmohan Singh and U.S. President George W. Bush announced plans for civil nuclear cooperation.
India agreed to separate its civil and military nuclear facilities and place all civilian nuclear facilities under International Atomic Energy Agency (IAEA) safeguards.
The United States aimed to adjust its domestic laws and work with international partners to facilitate full civil nuclear cooperation with India.
The U.S. Congress amended the Atomic Energy Act of 1954, allowing nuclear cooperation with India despite its non-signatory status to the Nuclear Non-Proliferation Treaty (NPT).
India negotiated an India-specific safeguards agreement with the IAEA, approved on August 1, 2008, and signed on February 2, 2009.
On September 6, 2008, the NSG granted India a waiver, permitting it to engage in civilian nuclear trade globally.
External Affairs Minister and U.S. Secretary of State signed the 123 Agreement in Washington, D.C., operationalizing the civil nuclear cooperation framework.
Key Provisions:
- The agreement encompasses nuclear reactors and aspects of the associated nuclear fuel cycle, including enrichment and reprocessing.
- Provisions include developing a strategic reserve of nuclear fuel to ensure a reliable supply over the lifetime of India’s reactors.
- India is granted prior consent to reprocess nuclear material, contingent upon establishing a dedicated national facility under IAEA safeguards.

The US ‘810’ Roadblock:

The ‘810’ regulation under Part 810 of Title 10, US Code of Federal Regulations, restricts American nuclear firms from manufacturing nuclear equipment or conducting nuclear design work outside the US.
While the 123 Agreement aimed to enable full nuclear cooperation, this restriction limits India’s ability to participate in nuclear technology manufacturing.
Why India Seeks an Exemption?
- India’s ambition to manufacture SMRs domestically is hindered by the ‘810’ restriction.
- To develop and scale nuclear power generation, India requires an exception to allow domestic production of nuclear components.

Small Modular Reactors (SMRs):

SMRs, with a capacity ranging from 30 MWe to 300 MWe per unit, are viewed as a viable option for clean energy transition.
India aims to be a global leader in SMR technology.
The Department of Atomic Energy (DAE) is in exploratory talks with Holtec International, a New Jersey-based company, for potential collaboration on SMR projects.

Global SMR Developments:

Only two SMR projects have reached operational status globally:
- Akademik Lomonosov (Russia) – Two modules of 35 MWe each, operational since May 2020.
- HTR-PM (China) – Grid-connected in December 2021, commercially operational by December 2023.
Western firms advancing SMR certification include:
- Holtec International – SMR-300
- Rolls-Royce – SMR
- NuScale – VOYGR SMR
- Westinghouse Electric – AP300 SMR
- GE-Hitachi – BWRX-300