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Critical Topics and Their Significance for the UPSC CSE Examination on March 31, 2025

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US-India 123 Civil Nuclear Agreement

For Preliminary Examination:  Current events of national and international Significance

For Mains Examination: GS II - International relations and agreements

Context:

Two decades after it was inked, decks have been cleared to tap the commercial potential of the India-US civil nuclear deal with an unprecedented regulatory clearance from the US Department of Energy (DoE) that will allow a US company to build and design nuclear reactors in India

Read about:

US-India 123 Civil Nuclear Agreement

What are the areas of cooperation between India and the US?

Key takeaways:

• The four-day India-US trade discussions concluded on Saturday, achieving significant alignment on the framework of a potential trade agreement. However, the Terms of Reference (ToR), which define the objectives and scope of a bilateral trade agreement (BTA) and initiate formal negotiations, were not finalized, according to a government official cited by The Indian Express.

• In a statement following the talks, India’s Commerce and Industry Ministry stated that both nations had reached a “broad understanding” on the next steps toward finalizing a bilateral trade agreement by the fall. However, the statement did not clarify whether any concessions would be made regarding President Donald Trump’s decision to impose reciprocal tariffs starting April 2, which Indian industries had been anticipating.

• The US has already imposed a 25% tariff on steel and aluminum and is set to introduce tariffs on automobiles and auto parts from April 3. Indian steel exporters have informed the government that these tariffs have impacted nearly $5 billion worth of exports, while auto-component exporters are concerned that selective exemptions could jeopardize India’s $7 billion worth of exports to the US.

• The 123 Agreement, signed between India and the US in July 2007, aimed to facilitate full-scale civil nuclear cooperation, covering nuclear reactors and various aspects of the nuclear fuel cycle, including enrichment and reprocessing. However, progress has stalled since then, with no significant investments materializing.

• On the Indian side, legal challenges have also posed hurdles. The Civil Liability for Nuclear Damage Act, 2010, which establishes a framework for compensating victims of nuclear accidents and outlines liability allocation procedures, has deterred foreign firms such as GE-Hitachi, Westinghouse, and Areva. These companies have raised concerns that the legislation directs liability toward equipment suppliers, making them hesitant to invest due to potential future risks.

• Additionally, amendments to the Atomic Energy Act of 1962 are necessary to allow private companies to operate nuclear power plants, a role currently restricted to state-owned entities. The Indian government has committed to facilitating these changes.

• On March 26, the US Department of Energy (DoE) approved Holtec International’s request for specific authorization concerning the restrictive regulation known as "10CFR810" (Part 810 of Title 10, US Atomic Energy Act of 1954). This authorization permits Holtec, under certain conditions, to