In a pivotal policy update on January 3, US President Joe Biden issued a National Security Memorandum (NSM) introducing updated guidance for the United States’ implementation of the Missile Technology Control Regime (MTCR). This will allow the US greater flexibility in its approach for reviewing requests for MTCR Category I military missiles, Unmanned Aerial Systems (UAS), and Space Launch Vehicle (SLV) systems.
Close on the heels of this update to the US missile export control policies, US National Security Advisor Jake Sullivan visited New Delhi from January 5 to 6, 2025 during which he expressed optimism about the future of US-India relations, highlighting cooperation in defense, technology, and clean energy.
On what was his final overseas trip as NSA, Sullivan announced that the United States is progressing with efforts to remove regulatory obstacles to a civil nuclear partnership with India. Sullivan emphasised the revised US missile export control policies which are aimed at enhancing India-US commercial space collaboration and removing certain Indian nuclear entities from the list. This announcement signifies a major step forward in implementing a historic agreement that was established 16 years ago, paving the way for the construction of US nuclear power plants in India.
Speaking at an event jointly organised by the I-Hub Foundation for Cobotics and the Technology Innovation Hub of the Indian Institute of Technology on 6 January, Sullivan noted, "Although former President Bush and former Prime Minister Dr Manmohan Singh laid out a vision of civil nuclear cooperation nearly 20 years ago, we have yet to fully realize it.”
The 2005 Indo-US Civil Nuclear Agreement, which aimed to facilitate civil nuclear cooperation between the two countries and growth in India’s civil nuclear sector, took more than three years to come to fruition, involving amendments to US domestic law and securing a waiver by the Nuclear Suppliers Group( NSG).
However, significant insurance, technological and regulatory barriers have prevented tangible advancements in nuclear energy collaboration between India and the US. Firstly, India’s Civil Liability for Nuclear Damage Act of 2010, which imposes strict liability on nuclear plant operators and allows them to seek recourse against suppliers, has deterred foreign companies from investing in India's nuclear sector. It sparked concerns among foreign nuclear firms like GE-Hitachi and Westinghouse, that the open-ended nature of the law channels liability to equipment suppliers, and makes it difficult for foreign suppliers to obtain insurance coverage.
Secondly, in terms of reactor technologies, India's Pressurized Heavy Water Reactors (PHWRs), contrasted with the globally prevalent Light Water Reactors (LWRs), means that there are differences in design, fuel, and operational protocols. This has created barriers to seamless collaboration and technology transfer between Indian and US nuclear industries.
Lastly, the US Atomic Energy Act's 10 CFR 810 regulation, which restricts the manufacturing or designing of nuclear equipment by US companies in foreign countries, has limited India's participation in the manufacturing value chain.
The Biden administration’s decision to ease restrictions on civil nuclear cooperation between the US and India is expected to be finalised shortly.
The latest announcement implies that Indian entities, including the Bhabha Atomic Research Centre (BARC); Indira Gandhi Atomic Research Centre (IGCAR) and Indian Rare Earths Limited (IREL), might be removed from US restricted list. Amid China's push for leadership in the SMR sector, Sullivan's visit to India aimed to bolster the innovation alliance through the US-India iCET initiative, launched by Prime Minister Narendra Modi and US President Joe Biden in May 2022 to forge greater collaboration between India and the US in areas of critical technologies such as artificial intelligence, semiconductors, biotech, and defence innovation.
Expansion on the iCET could enable joint manufacturing of nuclear components for new Indian projects, crucial as India positions itself as a hub for small modular reactors (SMRs) with capacities ranging from 30MWe to 300MWe. During his speech, Sullivan was also critical of China's industrial strategies, highlighting the importance of resilient supply chains.
Heavily reliant on fossil fuel imports for its energy needs, investing in nuclear energy is essential for India's future. Going forward, the US easing of restrictions on civil nuclear cooperation, is a significant step towards operationalising the 2005 Indo-US nuclear deal and should see the opening of India’s nuclear power sector to collaboration, with private foreign partners through joint ventures to build and operate nuclear power plants.
The author is a security and economic affairs analyst
