SAV recently published a piece by Hely Desai on India’s development of small modular reactors and its implications for New Delhi’s nuclear energy and economic goals. In this analysis, Brigadier (Retd). Zahir Kazmi responds with some of the concerns that this development generates in a regional context.
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Recently, the United States cleared the way for an unprecedented transfer of nuclear technology to India, authorizing the joint design and manufacturing of small modular reactors (SMRs).[1] The deal, first referenced during Prime Minister Narendra Modi’s visit to Washington in June 2023, represents a major advancement in U.S.-India nuclear cooperation. This development is particularly significant not just for the scale and ambition of nuclear exchanges between the two countries, but the deeper story it tells about the evolution—and erosion—of the global non-proliferation as well as its impact on strategic stability in South Asia.
A Quiet Breakthrough
Under this emerging cooperation, American firm Holtec International has received authorization from the U.S. Department of Energy to share technical information related to its SMR-300 with Indian partners, marking a significant step toward joint development and potential deployment. These reactors, compact and scalable, are pitched as part of India’s clean energy strategy. Yet they are also strategically sensitive technologies—often classified as dual-use due to their potential applicability in naval propulsion and the complexities they introduce for international safeguards. Unlike conventional reactors, SMRs present a challenge to the verification regime inter alia due to their modular deployment potential.
Despite the significance of this step, the U.S. government perhaps followed a standard practice of not issuing formal public statement. Instead, details emerged from the Indian and international media. However, without official confirmation or additional details from the U.S. government, significant concerns remain over how Washington will approach the transfer of these dual-use technologies and the broader implications for the non-proliferation regime.
India’s Long Game
For India, the recent authorization of U.S. SMR technology marks a long-awaited breakthrough. While India has been enjoying preferential access to Russia’s more affordable and politically aligned nuclear market, it has also persistently sought Western nuclear technology, training, and strategic legitimacy without taking on the full-scope legal or safeguard obligations that accompany such transfers. While imported fuel reactors like Kudankulam are under safeguards, much of India’s strategic nuclear fuel cycle, including its fast breeder reactors and naval program—remains outside safeguards. Since the 2008 waiver from the Nuclear Suppliers Group (NSG), secured with strong U.S. backing despite rules requiring full-scope safeguards,[2] India has signed at least fourteen civil nuclear cooperation agreements, including with France, Canada, the UK, Australia, Japan, Kazakhstan, and South Korea.
The recent SMR authorization, while at an early stage, could signal the beginning of a payback phase, as Washington seeks returns on its longstanding investments in India’s strategic rise.
However, U.S. firms remained largely excluded from India’s reactor market. India’s Civil Liability for Nuclear Damage Act (CLNDA, 2010) was the key barrier. Unlike international norms under the Convention on Supplementary Compensation for Nuclear Damage, Indian law placed exclusive primary liability squarely on the operators, while also allowing them to seek damages from suppliers. This provision — shaped partly by post-Bhopal legal consciousness — deterred U.S. and Western reactor vendors, whose governments, unlike those of Russian and Chinese competitors, did not provide liability protection. Still, Washington prioritized India’s strategic accommodation over resolving such commercial barriers.
India leveraged its strategic partnership with Washington to secure sweeping diplomatic and nuclear concessions—most notably its NSG waiver, despite remaining outside the Non-Proliferation Treaty (NPT). This waiver enabled India to enjoy global nuclear commerce without accepting the standard obligations required of non-NPT nuclear powers, such as the adoption of full-scope IAEA safeguards or the signing of the Comprehensive Nuclear-Test-Ban Treaty.
At the same time, while U.S. political support helped normalize India’s position in the nuclear order, American firms like Westinghouse were unable to close deals, largely due to the liability-related deadlock. Instead, Russia continued to dominate the reactor space (six Kudankulam units planned), France secured an agreement to build six EPR reactors in Jaitapur, and Canada resumed uranium exports and civil cooperation under a renewed bilateral agreement signed in 2015. Now, with SMRs potentially falling outside the conventional framework or being treated as a new regulatory category, an opening may finally be emerging.
The Payback Phase
In effect, India maximized benefits from the system while minimizing commitments. It invoked “strategic autonomy” to resist U.S. demands for reforming its supplier liability law yet readily embraced preferential treatment and geopolitical accommodation. The recent SMR authorization, while at an early stage, could signal the beginning of a payback phase, as Washington seeks returns on its longstanding investments in India’s strategic rise.
Bending the Rules, Breaking the Regime
But this comes at a cost. The preferential treatment afforded to India continues to erode the normative foundations of the non-proliferation regime. Under Article I of the NPT, nuclear powers are prohibited from assisting, even indirectly, non-nuclear-weapon states in acquiring nuclear weapons or related capabilities. While the United States maintains that its civil nuclear cooperation with India is peaceful in intent, the broader context is difficult to ignore: India has refused to join the NPT, has not adopted full-scope safeguards, and continues to expand its fissile material production capacity outside of international oversight. The IAEA’s inspection regime in India is limited only to designated civil facilities under its India-specific safeguards agreement (INFCIRC/754), while key segments of its nuclear program—including fast breeder reactors and naval propulsion development—remain outside inspection.
The recent SMR authorization not only deepens these contradictions and further institutionalizes exception as the norm. For states in the Global South, the message is unmistakable: geopolitical alignment can secure access to sensitive technologies without the legal obligations imposed on NPT signatories. Countries like Pakistan and Brazil now increasingly view the non-proliferation regime as a hierarchy shaped by privilege, not universal compliance. This perception erodes restraint and undermines mechanisms such as the IAEA and the NSG, which appear selectively applied.
If the non-proliferation regime can stretch this far for one state, it can—and likely will—stretch for others. That path leads to norm erosion, unequal enforcement, and growing strategic instability, particularly in regions like South Asia, where India-Pakistan nuclear asymmetries continue to deepen amid evolving doctrines, conventional imbalances, and technological shifts.
What makes this even more significant is India’s record of asymmetric reciprocity. After securing its 2008 NSG waiver with Washington’s support, India expanded its civil nuclear trade—not just with the United States and France, but also with Russia, Kazakhstan, Canada, and Australia. It positioned itself as a responsible nuclear actor while continuing to operate outside the NPT and maintaining a selective safeguards regime. Yet the American nuclear industry, like Westinghouse, were effectively deterred—by a combination of the CLNDA and market dynamics. While Westinghouse’s bankruptcy affected deals, liability regime was the core barrier for American vendors.
With Washington now seeking strategic and commercial returns on its support for India’s rise, pressure for market access is growing. The 2023 Modi-Biden joint statement called for removing barriers to U.S. investment in India, including civil nuclear cooperation. Though currently limited to technology sharing, the SMR deal signals a new legal and political opening. It sidesteps past stalled efforts stalled over liability concerns, potentially easing future deployment. Flexibility now seems politically viable as India moves to revise its liability law, previously considered untouchable.
This is no longer just about India. It reflects the system-wide consequences of selectively bending rules to suit strategic convenience. If the non-proliferation regime can stretch this far for one state, it can—and likely will—stretch for others. That path leads to norm erosion, unequal enforcement, and growing strategic instability, particularly in regions like South Asia, where India-Pakistan nuclear asymmetries continue to deepen amid evolving doctrines, conventional imbalances, and technological shifts. Every new exception becomes a precedent—a template for others seeking similar entitlements without corresponding obligations. Yet, the burden of compliance and restraint remains unevenly applied, while the source of instability often lies with those reshaping the rules to serve strategic ends.
Lessons from the Global South
There are alternatives. In 2020, China introduced a resolution at the UN General Assembly titled “Promoting International Cooperation on Peaceful Uses in the Context of International Security.” Adopted in 2021, the resolution urged the international community to guarantee access to peaceful nuclear and dual-use technologies under effective safeguards, and to avoid discriminatory controls that exacerbate strategic imbalance.[3] While some Western governments raised concerns that the resolution could dilute export control regimes, it nonetheless offers a normative framework to re-anchor the non-proliferation regime in principles of equity, transparency, and universality—rather than partnerships based on geopolitics.
Time for Strategic Honesty
Strategic stability in South Asia is possible. But it requires honesty and consistency from the regime’s extra-regional architects and enforcers. If Washington and its allies continue to pursue a model of nuclear privilege for strategic partners, while demanding compliance and restraint from others, they risk not only exacerbating regional instability—they risk making the very non-proliferation regime they once built unsalvageable.
The SMR deal with India is more than an energy partnership. It is mirror held up to the international order—and what it reflects is a system shaped less by rules than by alliances of convenience. While Pakistan remains committed to non-proliferation norms and advocates equitable access to peaceful technologies, its future approach to SMRs will be shaped by governance standards and regional strategic considerations.
To restore credibility and relevance, the non-proliferation architecture must return to its foundational principle: that access to peaceful nuclear technology must be matched by universal obligations, not strategic exceptions. The NPT was among the most ambitious efforts to apparently extend the rule of law over nuclear weapons—but its survival depends on all states upholding the core bargains of restraint, disarmament, and equitable access. When those bargains are selectively applied or abandoned, the regime risks unravelling.
[1] SMRs are designed for flexible deployment. SMR-300 features “walk-away” passive safety systems, service life, and deliver zero-carbon fission energy. See Holtec International, SMR-300 Overview, accessed April 4, 2025, https://holtecinternational.com/products-and-services/smr/.
[2] While granting India the 2008 waiver, NSG required full-scope IAEA safeguards—meaning all nuclear facilities under IAEA inspection—as a condition for trade. India, a non-NPT nuclear power, rejected such safeguards and still operates under an India-specific agreement (INFCIRC/754) that applies only to designated civilian facilities. Its waiver thus marked a clear exception to NSG Guidelines (INFCIRC/254/Rev.5/Part 1, 2005). See: IAEA, “The NSG: Guidelines for Nuclear Transfers (INFCIRC/254/Rev.5/Part 1),” November 28, 2005, https://www.iaea.org/sites/default/files/publications/documents/infcircs/1978/infcirc254r5p1.pdf ; and IAEA, “India: An Agreement with the Agency for the Application of Safeguards to Civilian Nuclear Facilities,” INFCIRC/754, July 2008, https://www.iaea.org/publications/documents/infcircs/agreement-between-government-india-and-international-atomic-energy-agency-application-safeguards-civilian-nuclear-facilities/
[3] India abstained on the vote, while Pakistan and most Global South states voted in favor. The resolution passed with 78 votes in favor, 53 against, and 32 abstentions.
Views expressed are solely those of the author and do not represent the official policy or position of the Pakistani government.
Also Read: India’s Nuclear Bet: Liberalization, Small Reactors, and Big Ambitions
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Views expressed are the author’s own and do not necessarily reflect the positions of South Asian Voices, the Stimson Center, or our supporters.
Image 1: Via Ministry of External Affairs, India
Image 2: White House Photo by Paul Morse via Wikimedia Commons
