Nuclear & Insurance reforms
Cabinet Approvals
India’s Union Cabinet has approved major reforms in two critical sectors:
Atomic energy sector
Insurance sector
These reforms aim to attract significant foreign investment and enable private-sector participation.
Atomic Energy Sector Reforms
End of Decades-long State Monopoly
India is relaxing rules that historically kept nuclear power entirely under government control.
The move opens the door for private sector participation, including domestic and foreign companies.
Goal: Massive Expansion of Nuclear Power
India plans to expand nuclear power capacity 12-fold by 2047.
Achieving this target requires:
Foreign technology
Greater private investment
Faster deployment of reactors and related infrastructure
Addressing Nuclear Liability Issue
India’s earlier nuclear liability regime (Civil Liability for Nuclear Damage Act) was seen as overly stringent by foreign suppliers.
The Cabinet’s decision aims to overcome this obstacle, making it easier for foreign reactor suppliers to operate in India.
5. Expected Impact
Boost reactor construction
Accelerate clean energy transition
Deepen nuclear partnerships with the U.S., France, Russia, Japan, etc.
Insurance Sector Reforms
Full Opening to Foreign Investment
Government has proposed removing the 74% cap on Foreign Direct Investment (FDI) in Indian insurance companies.
This effectively allows 100% foreign ownership.
Rationale
Attract multi-billion-dollar foreign capital
Deepen the Indian insurance market
Improve solvency margins and insurance penetration
Support innovation, digitalisation, and new products
Strategic Significance
Economic and Policy Implications
These reforms align with India’s long-term growth strategy and capital-intensive sector expansion.
Both sectors—nuclear and insurance—are pivotal for:
Energy security
Climate commitments
Financial sector deepening
Foreign investor confidence
Prelims Practice MCQs
Q. With reference to India’s nuclear sector reforms, consider the following statements:
India is allowing private participation in nuclear power generation for the first time by relaxing provisions of its atomic energy laws.
The major constraint earlier for foreign nuclear suppliers was India’s civil nuclear liability regime.
India plans to increase its nuclear power capacity twelve-fold by 2047.
How many of the above statements are correct?
A. Only one
B. Only two
C. All three
D. None
Correct Answer: C
Explanation:
All statements are exactly as per the report: private participation allowed, liability provisions being eased, and 12-fold capacity increase planned.
Q. Why is India seeking foreign participation in the nuclear energy sector?
To access advanced reactor technologies not currently available domestically
To reduce dependence on fossil fuels by expanding clean baseload capacity
To comply with International Atomic Energy Agency (IAEA) mandates on private participation
To mobilise large-scale capital for rapid nuclear expansion
Select the correct answer:
A. 1, 2 and 4 only
B. 1 and 3 only
C. 2 and 4 only
D. 1, 2, 3 and 4
Correct Answer: A
Explanation:
IAEA does not mandate private participation (Statement 3 incorrect). Others are valid motives.