India-US Nuclear Partnership: Will the Removal of BIS Entities Drive Real Change?
In a historic move, the United States has lifted restrictions on three prominent Indian nuclear entities, signaling a new chapter in the India-US civil nuclear partnership. The decision, announced by the US Bureau of Industry and Security (BIS), removes the Bhabha Atomic Research Centre (BARC), the Indira Gandhi Atomic Research Centre (IGCAR), and Indian Rare Earths Limited (IRE) from the Entity List. This development comes 16 years after the groundbreaking nuclear agreement between the two nations was signed.
Principal Deputy Assistant Secretary of Commerce for Export Administration, Matthew Borman, emphasized the strategic importance of this milestone, highlighting its potential to strengthen bilateral cooperation. The removal of these restrictions paves the way for deeper collaboration in securing resilient supply chains for critical minerals and advancing clean energy solutions.
National Security Adviser Jake Sullivan, speaking at IIT-Delhi, reaffirmed the US’s commitment to dismantling regulatory barriers that have previously hindered nuclear collaboration. Reflecting on the vision shared by former US President George W. Bush and former Indian Prime Minister Manmohan Singh, Sullivan noted that the Biden administration's actions are bringing the partnership closer to realizing its full potential.
This breakthrough holds transformative potential for India, granting it access to US civilian nuclear technology and materials. It not only bolsters India’s energy security but also strengthens the strategic partnership between the two nations in addressing global clean energy challenges.
The Historical Foundation: India-US Civil Nuclear Agreement
The India-US Civil Nuclear Agreement, commonly referred to as the "123 Agreement," was signed in 2008 and was born from a 2005 joint statement by Indian Prime Minister Manmohan Singh and US President George W. Bush. This landmark agreement marked a significant policy shift by the United States, ending decades of restrictions on nuclear trade with India due to its non-signatory status to the Nuclear Non-Proliferation Treaty (NPT).
The deal permitted US companies to supply nuclear fuel and technology to India’s civilian nuclear energy program, contingent upon India allowing International Atomic Energy Agency (IAEA) inspections of its civilian nuclear facilities.
Addressing Legal Hurdles
Despite the progress, significant legal challenges remain on both sides. On the Indian side, the Civil Liability for Nuclear Damage Act, 2010, has been a point of contention. The legislation, which channels liability for nuclear accidents to equipment suppliers, has deterred major foreign players from investing in India’s nuclear sector due to fears of future liabilities.
From the US perspective, the 10CFR810 authorization under the US Atomic Energy Act of 1954 permits American companies to export nuclear technology to India but under strict safeguards. However, it does not allow manufacturing or nuclear design work in India— a significant limitation given India’s aspirations to co-produce nuclear components domestically.
The challenges are exemplified by Kovvada, in Andhra Pradesh, which was earmarked for the construction of six AP1000 pressurized water reactors as long ago as 2016. However, contractual arrangements for the project have yet to be finalized, highlighting the impact of unresolved regulatory and liability constraints.
The path forward may require innovative solutions or legislative changes. While India seeks a workaround to address these constraints, the lack of legislative mandate to amend the 2010 liability framework complicates the process. For a truly transformative partnership, both nations will need to address these regulatory and legislative bottlenecks.
A New Horizon for Cooperation
The removal of three Indian entities from the BIS Entity List marks a significant milestone in India-U.S. nuclear relations, reflecting the shift from a history of mistrust and sanctions to a strong strategic partnership focused on technological collaboration. This move underscores India's growing role as a trusted global partner in technology and security.
U.S.-based companies, such as Westinghouse Electric Company, have expressed interest in collaborating with India on the Kovvada Nuclear Power Plant in Andhra Pradesh since the early 2010s, a partnership that traces its origins back to the India-U.S. Civil Nuclear Agreement (123 Agreement) signed in 2008. However, despite over a decade since the agreement, tangible progress has been limited, raising concerns about the practical impact of policy changes on sectoral growth.
While the removal of restrictions marks a significant advancement, challenges remain—particularly regarding U.S. companies’ reluctance to engage due to India’s nuclear liability framework. Nevertheless, both nations recognize the potential for enhanced nuclear cooperation, particularly in the area of small modular reactors, to address energy deficits and facilitate the transition to cleaner energy solutions.
