India to Set Up Nuclear Liability Fund to Attract Private Investment

India is planning a nuclear liability fund to cover accident compensation exceeding 15 billion rupees ($169 million), aiming to reduce risk concerns for private and foreign suppliers, according to government sources. The fund would supplement the operator’s capped liability, replacing the current ad hoc payout system.

The proposed statutory fund, part of a new atomic energy bill, is designed to strengthen the government’s ability to compensate victims in case of a major nuclear accident. Officials said the move aligns India’s liability framework with global norms, potentially unlocking stalled private and foreign investment in the nuclear sector.

The government plans to expand nuclear power capacity 12-fold by 2047 and is easing rules to end the state monopoly, encouraging private and foreign participation. Major Indian conglomerates such as Tata Power, Adani Power, and Reliance Industries are reportedly preparing investment plans in response.

The new legislation, expected in parliament’s winter session in December, would replace the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010. It aims to remove the unlimited liability provision for suppliers and provide a clear legal mechanism for financing compensation beyond the operator’s liability cap, improving confidence among foreign firms.

A statutory nuclear liability fund supplementing the operator's ₹15 billion cap addresses one of the most persistent barriers to private and foreign investment in Indian nuclear power. The Civil Liability for Nuclear Damage Act 2010's supplier-liability provisions had effectively blocked foreign vendor participation; the proposed reform removes that specific friction while providing genuine victim-compensation capacity.

The 12-fold nuclear capacity expansion target by 2047 requires investment scale that state-only funding cannot deliver. Tata Power, Adani Power and Reliance Industries preparing investment plans signals that private-sector interest exists - the constraint has been liability-and-regulatory framework rather than capital availability.

For nuclear-technology providers, engineering companies, financial institutions and their supply-chain partners evaluating Indian nuclear opportunities, Cognitud's energy transition, market intelligence and responsible investment teams help clients evaluate opportunities under the reformed liability framework, structure long-term investment cases aligned with the reformed policy environment, and prepare disclosures aligned with ISSB, TCFD and jurisdictional low-carbon-energy frameworks that increasingly determine access to sustainable-finance for large-scale nuclear investment.