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The US National Security Advisor Jake Sullivan may have signalled an incremental step by the outgoing Biden Administration to operationalise the Indo-US nuclear deal, including some measures to find a way around the long-standing regulations that have stymied civil nuclear cooperation between India’s nuclear entities and US companies, but the big question is this: will the incoming administration in Washington take a cue and build on this somewhat belated initiative.
Indications are that while the last-ditch outreach by Washington could include removing Indian government-owned atomic bodies from the US entity list, the bigger impediment holding up investments are two legal barriers on both sides. On the American side, it is the ‘10CFR810’ authorisation (Part 810 of Title 10, Code of Federal Regulations of the US Atomic Energy Act of 1954), which gives US nuclear vendors the ability to export equipment to countries such as India under some strict safeguards, but does not permit them to manufacture any nuclear equipment or perform any nuclear design work here. And on the Indian side, it is the Civil Liability for Nuclear Damage Act, 2010.
On trade and economy, the points of convergence between India’s business interests and Trumponomics are beginning to get clearer. What is fuzzy, though, from New Delhi’s perspective is whether India would get some leeway on the sort of waiver it seeks with respect to the ‘810’ authorisation, given that president-elect Donald Trump is essentially transactional in most of his outreach efforts and wants manufacturing jobs to come back to America. The 810 authorisation is a clear impediment from New Delhi’s perspective, given that India wants to participate in the manufacturing value chain and co-produce the nuclear components for atomic power projects being jointly planned to be set up in the country, sources said. But Trump has also stated in the past that while he’s bullish on nuclear power, he is concerned about atomic power projects overshooting their budgets. And that is a problem that nuclear projects in the US and Europe are steadily coming to terms with. Spreading out manufacturing does offer a possible answer to tackling the high cost problme plaguing American nuclear vendors.
While there is uncertainty on how all of this will pan out post January 20, what is clear with the incoming Trump administration is that the one area of mutual interest is likely to be Small Modular Reactors (SMR). This is something that New Delhi is increasingly viewing as an area of strategic interest and Trump appears to be extremely keen to push.
During his pre-election podcast with Joe Rogan, Trump said he thought projects to build more of the large nuclear reactors currently on the grid, while “very clean,” have a tendency to be complex and to go over budget. “They build these massive things. Then the environmentalists get in.” Trump said, and then pointed to SMRs as a potential answer to long-running cost concerns surrounding the energy source. Trump asserted that he believes that smaller reactors, which can be built in a factory, could avoid the complexities associated with large reactors. The IAEA, an international body that advises governments on the transition to clean energy, says nuclear power has to more than double by 2050 if the world has any chance at reaching net zero. The problem with nuclear power currently is that it is big and expensive, takes too long to build and could cause civilization-ending disasters if something were to go wrong. SMRs promise a workaround on practically most of those concerns.
This comes at a time when India is working to get into the manufacturing value chain of small reactors, both as a way of fulfilling its commitment to clean energy transition, and bundling SMRs as a technology-led foreign policy pitch.
SMRs – small 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. This is especially relevant in the wake of surging power demand from technology companies, given the massive incremental electricity requirement coming in from AI machine learning applications and data centres.
While there are lots of different types of SMRs being developed, there are currently four main types, each using a different coolant to manage the extreme heat of a nuclear fission reaction – light water, high temperature gas, liquid metal and molten salt.
The most common type, though, are light water reactors, which are very similar to traditional nuclear power plants being built in Russia, France and the US, which are almost all water cooled. That makes them much easier to design and get approved, as today’s nuclear regulations are mostly based on water cooled reactors. So with these light water reactors, the idea is to take a big traditional nuclear power plant, shrink it down and mass produce it in a factory – like Trump described it in Rogan’s podcast.
India’ Department of Atomic Energy is in exploratory talks with Holtec International, based in Camden, New Jersey – a smaller, privately-held company that is now billed as one of the world’s largest exporters of capital nuclear components – for possible collaborations.
Holtec’s pitch is for fostering a public-private initiative centred on the American company’s flagship small modular reactor, the SMR-300, to potentially help break this stasis in the nuclear engagement between the two countries nearly two decades after the India-US nuclear deal. The idea is to explore the possibility of using existing coal plant sites in India to deploy Holtec’s proposed SMR-based projects and the possibility of joint manufacturing at some point in the future.
As of now, 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. Apart from Holtec’s SMR-300, other emerging Western contenders in the SMR segment include the Rolls-Royce SMR, NuScale’s VOYGR SMR, Westinghouse Electric’s AP300 SMR and GE-Hitachi’s BWRX-300.
Holtec’s SMR-300 is one of seven advanced reactor designs supported by the US Department of Energy’s Advanced Reactor Demonstration Programme. In 2020, the company’s SMR project received a $116-million award to help accelerate design, engineering and licensing activities and is currently in the early design review stages in the United Kingdom and Canada to deploy its small reactor.
On the Indian side, the Civil Liability for Nuclear Damage Act, 2010, which sought to create a mechanism for compensating victims from damage caused by a nuclear accident, and allocating liability and specifying procedures for compensation, has been cited as an impediment by foreign players such as GE-Hitachi, Westinghouse and French nuclear company Areva to investing in India. This is primarily on the grounds that the legislation channelises operators’ liability to equipment suppliers, with foreign vendors citing this as a reason for worries about investing in India’s nuclear sector due to fear of incurring future liability. On the American side, the ‘10CFR810’ authorisation (Part 810 of Title 10, Code of Federal Regulations of the US Atomic Energy Act of 1954) gives American companies such as Holtec the ability to export to India under some strict safeguards, but does not permit them to manufacture any nuclear equipment or perform any nuclear design work in India. This authorisation is essentially a non-starter from New Delhi’s perspective, which wants to participate in manufacturing the SMRs and co-produce the nuclear components for its domestic needs.
So, the US-India nuclear deal could need some additional leeway, for which New Delhi is trying for a workaround, even though it lacks the legislative mandate to make any changes to the 2010 legislation.
India would want Washington to move the needle. While there are clear signs of progress under the outgoing administration, the specific issue of getting around ‘10CFR810’ could face issues in the new dispensation, given Trump’s statecraft is primarily centred on bringing manufacturing back into the US.
India, meanwhile, is hoping to pitch itself as a credible alternative to the incumbents in this niche field, riding on its strong track record of having operated small-sized reactors over an extended period of time and the ability to manufacture nuclear reactors cost-effectively and at scale.
This also comes at a time when Beijing is working on an ambitious plan to seize the opportunity of global leadership in the SMR space, unlike large reactors where China has been a latecomer. Like India, Beijing is seeing SMRs as a tool of its diplomatic outreach in the Global South and that the country could shake up the SMR industry, just as it has done in the electric vehicle sector.
Though India’s civil nuclear programme has expertise in manufacturing smaller reactor types – 220MWe PHWRs (pressurised heavy water reactors) and above – the problem for India is its reactor technology. Based on heavy water and natural uranium, the PHWRs are increasingly out of sync with the light water reactors that are now the most dominant reactor type across the world.
The strategic pitch from Holtec’s end is that a collaborative approach could be a positive for both the US and India, given that both countries are ill-placed to compete with China on their own, given India’s technological constraints and the US being seen as being impeded by a relatively high cost of labour and the growing protectionist mood in that country. According to government officials, detailed technical discussions are currently underway in policy circles to plan a roadmap for studying the feasibility and effectiveness of the deployment of such reactors.
Russia is also learnt to be keen to expand its nuclear cooperation with India to include a partnership in SMRs, sources said. “The future course of action will be finalised on the basis of the decision of the Government within the overall remit of the Atomic Energy Act, 1962, and the possibility of allowing participation of private sector and start-ups in this sector (SMRs) is also being looked at,” an official told The Indian Express.
