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15-12-2025
Bureau Report
NEW DELHI: India’s cabinet has approved sweeping changes to atomic energy laws and fully opened the insurance sector to foreign investors, two government sources said on Friday, key policy moves aimed at attracting billions of dollars in two critical sectors. India, which plans to expand nuclear power capacity 12-fold by 2047, is relaxing rules to end a decades-old state monopoly and overcome a stringent liability provision to allow private participation and attract foreign technology suppliers. The changes in the nuclear sector are part of the push to boost nuclear capacity to 100 gigawatts by 2047 as India looks to cut coal dependence and meet climate commitments. In the insurance sector, the government has proposed removing the cap on foreign ownership of Indian insurance companies, currently set at 74%.
To qualify for 100% foreign direct investment, at least one of a company’s chair, managing director or chief executive would have to be an Indian resident, a third government source said.
The government has also dropped an earlier proposal for a unified licence for insurance companies, the source said.
A unified, or composite, licence would have allowed insurers to provide life, general and health insurance under a single entity.
Currently, life insurers cannot sell products such as health insurance, while general insurers can only sell products ranging from health to marine.
The government felt that Indian insurance companies are not yet equipped to have a composite licence regime, the source said.
Both changes to laws are listed for approval in the ongoing winter session of parliament.
Opening nuclear sector to private players
The SHANTI Bill proposes allowing private companies to enter civil nuclear power generation under strict government oversight. While operational participation will be opened up, the Department of Atomic Energy will retain control over core strategic functions such as nuclear material production, heavy water management and radioactive waste handling. The reform aims to mobilize large-scale investment that the public sector alone cannot sustain.
Key Legal and Investment Reforms
A central feature of the Bill is the amendment of India’s civil nuclear liability framework. It seeks to shield plant operators and cap the liability of equipment suppliers, addressing long-standing concerns that have deterred private and foreign investment. Operator insurance cover is proposed to be redesigned at Rs.1,500 crore per incident through the Indian Nuclear Insurance Pool. The Bill also allows up to 49 per cent foreign direct investment and proposes a unified legal framework for atomic energy, including a specialized nuclear tribunal.
Officials said the reforms are driven by rising domestic energy demand, rapid growth of data centers and India’s commitment to achieve net-zero emissions by 2070. Nuclear power is being positioned as a stable, low-carbon base-load source to complement renewable energy. The government has also announced a ₹20,000 crore Nuclear Energy Mission for research and development of small modular reactors, with plans to operationalize five indigenous SMRs by 2033.
At present, the Atomic Energy Act restricts nuclear plant operations to the central government and its entities. Experts note that private participation will require an independent regulatory framework for tariff determination and oversight. The Bill is expected to be introduced in Parliament during the winter session and, if enacted, could reshape India’s civil nuclear ecosystem by aligning it more closely with international practices while expanding clean energy capacity.
