NEW DELHI: In a major breakthrough in the Indo-US nuclear deal that was signed nearly two decades ago, the US Department of Energy (DoE) has provided regulatory clearance to an American company to build and design nuclear reactors in India.
On March 26, 2025, DoE granted Holtec International a critical regulatory approval, allowing the company to transfer small modular reactor (SMR) technology to India. Holtec specialises in the design and manufacture of parts for nuclear reactors and is the world leader in storage and transport casks used for spent nuclear fuel.
The DoE approval to Holtec International has been given under conditions that it shares ‘unclassified small modular reactor (SMR) technology’ with three Indian firms: Holtec Asia (its regional subsidiary), Larsen &Toubro Ltd and Tata Consulting Engineers Ltd. The deal is under the restrictive regulation of the US, ‘10CFR810’, with the approval being valid for 10 years and will be re-evaluated every five years.
But the US has set one condition — these jointly-designed and manufactured nuclear power plants “will not be re-transferred to any other entity or end user in India or to other countries except the US without the prior written consent of the Government of the United States”.
Holtec had also sought approvals for two Indian govt-owned firms, Nuclear Power Corporation of India Limited (NPCIL) and National Thermal Power Corporation (NTPC), and also for Atomic Energy Review Board or AERB. However, the govt of India had not provided required clearances for these state-owned corporations since Holtec had not yet got DoE permission.
The India-US Civil Nuclear Agreement, also known as the 123 Agreement, was signed in August 2007 by then PM Manmohan Singh and then US President George W Bush to enable full civil nuclear energy cooperation between the two nations. However, it took nearly 20 years for the deal to kick in due to multiple legal and regulatory challenges.
Till now, under the civil nuclear deal, US firms could export nuclear reactors and equipment to India, but forbid them from any design work or manufacturing of nuclear equipment in the country.
In mid-Feb, PM Narendra Modi met President Trump and agreed to a new initiative to drive “transformative change across key pillars of cooperation” between the two countries. The two leaders then announced plans to build US-designed nuclear reactors in India. During the talks, Modi and Trump had also committed to leaning into the 123 Agreement for peaceful nuclear cooperation the nations signed in 2007.
The two leaders then agreed that energy security was fundamental to economic growth, social well-being and technical innovation in both countries by ensuring energy affordability, reliability, and availability in stable energy markets. To help facilitate the joint work decided between Modi and Trump, the Indian govt is considering amendments to India’s Atomic Energy Act of 1962, which bars private investments in India’s nuclear power plants.
Currently, India has 22 operating reactors, with an installed capacity of 6780 MWe. Among these eighteen reactors are Pressurised Heavy Water Reactors (PHWRs) and four are Light Water Reactors (LWRs). In Feb last year, Kakrapar Unit 4 became India’s newest nuclear power plant to become operational.