PM Modi’s 2-nation tour: Easing rules on small modular reactors, AI hardware exports on India’s list

Government sources said New Delhi will also cite the progress made to facilitate setting up of SMRs in the country. It has announced its plans to move domestic legislative amendments to allow private players in the nuclear energy sector, and is also likely to flag the proposed changes to be moved to the Civil Liability for Nuclear Damage Act, 2010.

The sources said the proposal for a public-private SMR partnership deal could be included in the US-India Initiative on Critical and Emerging Technologies (iCET), and likely modelled on the recent GE jet engine deal.

“The entry of private players has been a resounding success in space. The idea of a nuclear vertical (within the Department of Atomic Energy) essentially involves carving-out a dedicated space within India’s nuclear establishment to open the doors wider for private players. There is no question that the private sector players are in a better position to negotiate and execute ventures with foreign companies that are keen to participate in India’s atomic energy sector,” a senior government official said.

Some private players are already learnt to have shown interest in deploying these small reactors at their captive site. Since the talks are sensitive, sources said disclosing names may not be appropriate at this stage.

810 Authorisation

This provision (Part 810 of Title 10, Code of Federal Regulations of the US Atomic Energy Act of 1954), while allowing American nuclear power companies to export to countries such as India under some strict safeguards, restricts them from manufacturing any nuclear equipment or performing any nuclear design work outside of the US. As it stands, this authorisation is essentially a non-starter for New Delhi’s SMR ambitions, since it wants to participate in manufacturing these reactors being built in India and co-produce the nuclear components for its domestic needs. An exception on 810 is something that is vital from India’s perspective.

AI Diffusion Framework

The second issue that could be flagged from New Delhi’s end is the concern against the previous Joe Biden administration’s release of an expansive regulatory framework on the export of AI hardware towards its last days in office, which is seen as potentially impacting India’s AI ambitions. In an “interim final rule”, titled ‘Framework for Artificial Intelligence Diffusion,’ the outgoing Biden administration had proposed to create three tiers of countries with specific restrictions on the export of AI chips and GPUs for each. India was placed in the middle tier of this classification alongside countries that will face some restrictions on the number of GPUs it can import from the US. Even more concerning from New Delhi’s perspective is that besides the tiered classification, the draft also provided for a special review called the General Validated End User and that list included just two countries: India and China. Indian companies that potentially get this authorisation can use the exported items for civilian and military purposes, but not for nuclear use, while Chinese companies with this authorisation can only use the technology for civilian use. India is understood to be keen to raise this with the Trump administration and seek changes in these provisions that place it in a somewhat disadvantageous position in these country classifications.

Partnership for SMRs

On the SMR deal, India’ Department of Atomic Energy is already learnt to be in exploratory talks for collaborations with Camden, New Jersey-based Holtec International – a privately-held company that is now billed as one of the world’s largest exporters of capital nuclear components. The 810 authorisation is vital for any of this to go forward. The Biden administration is learnt to have initiated work on an authorisation to Holtec towards the end of its tenure, but there was limited progress due to lack of time. There are indications that this is likely to be taken forward by the new administration in Washington, potentially opening the doors for belatedly leveraging the commercial potential of the Indo-US civil nuclear deal, nearly two decades after the two countries concluded the deal.

SMR Potential

SMRs — reactors with a capacity of 30MWe to 300 MWe per unit — are increasingly seen as important for nuclear energy to remain a commercially competitive option in the future. India is pushing for a leadership slot in this small reactor space, both as a way of fulfilling its commitment to clean energy transition, and bundling SMRs as a technology-led foreign policy pitch.

Currently, two SMR projects have reached the operational stage globally. One is an SMR named Akademik Lomonosov floating power unit in Russia that has two-modules of 35 MWe (megawatt electric) and started commercial operation in May 2020. The other is a demonstration SMR project called HTR-PM in China that was grid-connected in December 2021 and is reported to have started commercial operations in December 2023. There are multiple Western companies that are in various stages of getting certifications for their SMRs, including Holtec International’s SMR-300, as well as the Rolls-Royce SMR, NuScale’s VOYGR SMR, Westinghouse Electric’s AP300 SMR and GE-Hitachi’s BWRX-300.

Legislative Changes

The proposed changes to the Atomic Energy Act are aimed at opening the door wider for the private sector for an entry into nuclear power plant operations and enabling them to enter the SMR sector as operators, which is currently allowed under the Act to state-owned Nuclear Power Corporation of India Ltd. (NPCIL) and some joint ventures that NPCIL has with state-owned companies such as NTPC Ltd and NALCO. The original Civil Liability for Nuclear Damage Act, 2010 had sought to create a mechanism for compensating victims from potential damages caused by a nuclear accident, and allocating liability and specifying procedures for compensation. These provisions, however, have been cited as an impediment by foreign players such as GE-Hitachi, Westinghouse and French nuclear company Areva (Framatome) to investing in India, primarily on the grounds that the legislation channelised operators’ liability to equipment suppliers. Foreign vendors have flagged this as a disincentive when it comes to investing in India’s nuclear sector amid apprehensions of incurring future liability.