India's Nuclear Ambitions Face Uncertain Future Amid Draft Framework

India's nuclear ambitions have been making headlines in recent years, with the government aiming to raise its nuclear power capacity from 7 gigawatts to 100 gigawatts over the next two decades. This ambitious plan is part of the country's effort to reduce its dependence on coal, which still supplies most of its electricity. However, a new draft framework has raised concerns among industry experts that India's nuclear ambitions may be derailed by its own rules.

The draft framework, which follows New Delhi's new nuclear law passed last year, seeks to attract foreign technology and investment to the nuclear sector. However, industry experts warn that the proposed rules could steer companies toward domestic technology over imports, making it harder for India to meet its nuclear targets. The draft framework requires companies seeking to deploy imported reactors to obtain operational and licensing certifications from the country of origin, as well as separate design approval from India's atomic energy regulator before construction can begin.

This additional layer of approval could delay project development and hamper India's ability to meet its nuclear targets. Small modular reactor technology, which India has identified as a promising area, could be particularly affected. Industry executives say that the rules could delay project development, and the absence of a binding timeline for design approvals could hamper reaching the government's target. The draft nuclear rules also leave several investment-related questions unresolved, including how tariffs will be determined, what returns investors can expect, and the minimum financial and technical qualifications that prospective operators must meet.

Industry executives, including Suhaan Mukerji, a managing partner at law firm PLR Chambers, have expressed concerns that the draft rules could delay project development and hamper India's ability to meet its nuclear targets. Mukerji serves as an adviser to domestic and foreign firms evaluating opportunities in India's nuclear expansion plans, including the implications of the draft rules. He warns that the country's approach may be suited to more mature nuclear markets, but may not be conducive to newer technologies.

The absence of a binding timeline for design approvals could delay project development, said Shri Venkatesh, a partner at law firm SKV, which advises Indian energy companies. The draft nuclear rules also leave several investment-related questions unresolved, including how tariffs will be determined, what returns investors can expect, and the minimum financial and technical qualifications that prospective operators must meet.

In at least a dozen interactions with the federal atomic energy department over the last eight months, Indian and foreign companies sought clarity on the issues, along with details on fuel tie-ups, fuel reprocessing, and exclusion-zone requirements. The two government officials said earlier draft rules circulated within government departments contained more detailed provisions on a number of issues, including qualification and tariff fixation with review provisions every five years. The version released for public consultation omits many of those specifics, they said, raising concerns that investment decisions could be delayed.

The nuclear rules and regulations will be finalised in about three months after the public consultation. As the clock ticks, industry executives and government officials are waiting with bated breath to see the final rulebook. Will India's nuclear ambitions be derailed by its own rules, or will the country find a way to balance its ambitions with the need for regulatory clarity? Only time will tell.