The Sustainable Harnessing and Advancement of Nuclear Technology for India [SHANTI] Act, 2025, marks a decisive shift in India’s approach to civil nuclear energy. Passed by Parliament, the act repeals the Atomic Energy Act, 1962, and the Civil Liability for Nuclear Damage Act, 2010, replacing a fragmented and dated legal architecture with a consolidated, forward-looking framework. The legislation aligns nuclear energy policy with broader objectives of energy security, grid stability and decarbonisation, including the government’s stated target of achieving 100 GW of nuclear capacity by 2047. Currently, India’s installed nuclear power capacity stands at about 8.78 GW, with nuclear contributing a steady 3 per cent of the total electricity generation. The government projects this to rise to around 22.38 GW by 2031-32, through a mix of indigenous 700 MW and international cooperation reactors.
Beyond consolidation, the SHANTI Act seeks to correct the structural bottlenecks that have constrained the sector so far, including the state-dominated operating model, investment-deterring liability regime and the regulatory architecture designed for a closed, single-operator ecosystem.
Components of the Act
A central feature of the SHANTI Act is the calibrated liberalisation of the nuclear sector. The act opens the sector to Indian private companies, joint ventures and other permitted entities, allowing them to apply for licences to build, own, operate and decommission nuclear power plants and reactors. Participation is also enabled across parts of the nuclear value chain, including manufacturing, fuel transport, storage and approved imports and exports. At the same time, the act clearly delineates activities that remain under exclusive government control. Sensitive and strategic domains such as uranium enrichment, isotopic separation, spent fuel reprocessing, recycling, radionuclide separation, high-level waste management and heavy water production continue to be reserved for the central government or its wholly owned institutions. This ring-fencing reflects the government’s intent to preserve sovereign control over the nuclear fuel cycle and security-sensitive operations. The act also establishes a structured licensing and safety authorisation framework, setting out conditions for the grant, suspension and cancellation of licenses. Activities involving radiation exposure require prior safety authorisation, reinforcing the primacy of safety and regulatory compliance even as participation broadens.
Additionally, under the Civil Liability for Nuclear Damage Act, 2010, operator liability was capped at Rs 15 billion, while statutory rights of recourse against suppliers created uncertainty and deterred international technology providers. The new framework replaces this with a graded liability structure. Operator liability limits are calibrated to the size and nature of the installation, with larger reactors subject to higher caps, extending up to Rs 30 billion, while smaller reactors and fuel cycle facilities fall under lower liability slabs. The act also provides for a dedicated nuclear liability fund, financed through levies on nuclear power operations, to support compensation mechanisms. Moreover, the operators were earlier granted a statutory right of recourse against suppliers for defective equipment or services, independent of contractual provisions. This departure from international practice created open-ended risk exposure for suppliers and deterred foreign technology participation. The SHANTI Act limits supplier recourse to cases explicitly provided for in contracts or involving intentional wrongdoing, aligning India’s framework with global norms. Another key component is the consolidation of regulatory, enforcement and dispute resolution mechanisms. The SHANTI Act grants statutory status to the Atomic Energy Regulatory Board, which previously functioned under executive authority. Statutory recognition is intended to enhance institutional independence, transparency and credibility, while providing clear legal backing for licensing, inspection, enforcement and penalties.
To strengthen governance, the act establishes new redressal mechanisms, including an Atomic Energy Redressal Advisory Council for dispute resolution, and designates an appellate authority for regulatory decisions. Dedicated provisions are also included for claims commissioners and a nuclear damage claims commission to handle compensation-related matters in the event of any nuclear incidents.
Government initiatives
The SHANTI Act complements a broader set of government initiatives aimed at scaling nuclear capacity and positioning nuclear energy as a key pillar of India’s clean energy transition. The government has announced the Nuclear Energy Mission, with the objective of achieving 100 GW of nuclear capacity by 2047. This long-term target 
reflects the recognition of nuclear power’s role in providing reliable baseload generation alongside rapidly expanding renewable capacity.
In Union Budget 2025-26, the government allocated Rs 200 billion to support the design, development and deployment of SMRs. The stated objective is to have at least five indigenously designed SMRs operational by 2033. Research and development efforts are being led by institutions such as the Bhabha Atomic Research Centre, including projects such as the 200 MWe Bharat Small Modular Reactor, a 55 MWe SMR design and a high-temperature gas-cooled reactor for hydrogen generation. These initiatives are aimed not only at capacity expansion but also at strengthening domestic technological capabilities and positioning India as a participant in the global advanced nuclear technology ecosystem. The SHANTI Act provides the legal and regulatory scaffolding required to support these initiatives at scale.
Impact
The most immediate impact of the SHANTI Act is on the investment environment for nuclear power in India. By addressing long-standing concerns around liability, regulatory certainty and market structure, the act seeks to make nuclear projects more bankable and attractive to both domestic and foreign investors. Supporting mechanisms such as mandatory insurance cover and dedicated nuclear liability and compensation funds will balance victim compensation and public safety with predictable, bankable risk allocation. From an operational perspective, the bill’s emphasis on regulatory strengthening is expected to improve oversight, while reducing uncertainty. Granting statutory status to the regulator and clarifying its powers is intended to enhance confidence among project developers, lenders and insurers.
The opening of the sector to private participation is also expected to ease fiscal constraints. Nuclear power expansion is capital-intensive and reliance on public finance alone is unlikely to support the scale required to meet long-term targets. By enabling private capital, technology and execution capability, the act aims to accelerate capacity addition, while maintaining government oversight.
Outlook
The SHANTI Act lays the groundwork for a structural transformation of India’s nuclear sector, but its success will ultimately hinge on execution. Subordinate legislation, detailed regulations and contractual frameworks will determine how effectively the bill’s provisions translate into projects on the ground.
Regulatory capacity will be a key factor. As the sector moves towards multiple reactor designs, private operators and advanced technologies, the regulator will need to develop expertise, processes and manpower at pace. Delays in licensing and approvals could otherwise emerge as the next major bottleneck. Investor response will also depend on clarity and predictability in implementation. From a system perspective, nuclear power is increasingly being viewed as a complement to renewables rather than a competitor. As India’s power system integrates higher shares of solar and wind, the role of firm, despatchable, low-carbon generation is expected to grow. The SHANTI Act positions nuclear energy to play that role over the long term.
Overall, the legislation represents a significant recalibration of India’s nuclear policy framework. By consolidating laws, enabling private participation, reforming liability and strengthening regulation, the SHANTI Act seeks to move the sector from a controlled, capacity-constrained model to an investment-grade, scalable ecosystem aligned with India’s energy and climate objectives.
Aastha Sharma
