The Indian government introduced the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India SHANTI Bill, 2025 in the Lok Sabha on Monday, December 16, marking a historic shift in India’s nuclear power policy. The SHANTI Bill ends the 63-year state monopoly on nuclear energy generation and allows private companies to build, own, and operate nuclear reactors for the first time since independence.
The new nuclear energy bill seeks to repeal both the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. The legislation aims to attract billions of dollars in private and foreign investment while maintaining government control over sensitive nuclear activities like uranium enrichment, fuel reprocessing, and radioactive waste management. The SHANTI Bill must be approved by both houses of parliament to become law, after which it will open India’s nuclear power sector to private participation with a 49 percent FDI cap.
What Is The New Bill?
The SHANTI Bill creates a unified legal framework that replaces multiple existing laws governing nuclear energy. It proposes amendments to streamline licensing procedures, strengthen regulatory oversight and simplify compliance requirements across project approvals and operations.
The legislation permits private companies and joint ventures to participate in nuclear power development. Eligible entities will be allowed to build, own, operate and decommission nuclear power plants. This represents a fundamental departure from the earlier model that restricted nuclear generation to public sector entities.
The bill also establishes a dedicated atomic disputes tribunal to address conflicts related to nuclear operations, contracts and liabilities. This specialized body offers a structured mechanism for resolution within the sector.
Why Govt Ended State Monopoly?
India currently generates 8.2 gigawatts of nuclear power. The government wants to increase this to 100 gigawatts by 2047 as part of its climate commitments and net-zero target by 2070. Public sector entities alone cannot mobilize the capital needed for this massive expansion.
“The Bill seeks to provide for a pragmatic civil liability regime for nuclear damage and to confer statutory status to the Atomic Energy Regulatory Board,” Minister of State in the Prime Minister’s Office Jitendra Singh said while introducing the legislation.
The country needs base load alternatives to coal-fired capacity to manage the limitations of renewable energy sources. Nuclear power provides consistent electricity generation that solar and wind cannot guarantee. More importantly, scaling up nuclear capacity requires capital that the government cannot provide alone.
Foreign funds, including sovereign funds from West Asia, have expressed interest in financing India’s nuclear expansion. These investors want to participate in the manufacturing value chain of small modular reactors, which are increasingly seen as crucial for nuclear energy to remain commercially competitive.
What Were Previous Nuclear Rules?
Since 1962, nuclear projects were restricted to firms under the Department of Atomic Energy, mainly the Nuclear Power Corporation of India. The Atomic Energy Act gave the government complete monopoly over all aspects of nuclear power generation.
A 2015 amendment allowed other state-run companies to form joint ventures with NPCIL to develop plants. NPCIL teamed up with three state-run companies including NTPC, IOC and NALCO. However, none of those ventures completed their proposed plants.
The Civil Liability for Nuclear Damage Act, 2010 created significant problems for potential investors. Section 17 of that law gave operators the right to sue equipment suppliers for defects, even years after installation. This provision was unique to India and deterred global reactor manufacturers from entering the market.
Foreign vendors repeatedly flagged this right of recourse as a major obstacle. No foreign company invested in a single nuclear project in India since the 2010 legislation came into force. The term “supplier” was too broad, causing concern among Indian sub-vendors who feared unlimited liability exposure.
How Bill Changes Nuclear Operations?
Indian private companies can now apply for licenses to build, own, operate and decommission nuclear power plants. Only Indian-incorporated companies will be eligible. Firms incorporated abroad or controlled by foreign entities cannot hold licenses.
Private participation will be subject to a foreign and domestic investment cap of 49 percent. This ensures majority ownership and strategic control remain with government-linked entities while allowing meaningful private involvement.
The bill limits liability for a nuclear incident strictly to the plant operator and explicitly exempts equipment suppliers. This addresses the key concern that kept global vendors away from India. The maximum liability for each incident is capped at the rupee equivalent of 300 million Special Drawing Rights, aligning with international norms.
Operators must maintain insurance or liability funds ranging from about 11 million dollars to 330 million dollars, depending on reactor size. A separate nuclear liability fund will cover excess claims. The government will step in if damages exceed these limits.
Certain exclusions are specified. Operators will not be liable for damage to the nuclear installation under construction, other installations on the same site, related property, or transport vehicles carrying nuclear material at the time of an incident.
What Activities Private Firms Get?
Indian private companies can participate in nuclear fuel fabrication, transportation and storage of nuclear and spent fuel, and the import or export of prescribed equipment, technology or software. Private firms can also import and process uranium.
Sensitive activities remain exclusively under government control. These include fuel enrichment, spent-fuel reprocessing and heavy water production. The Department of Atomic Energy retains oversight over critical national security and safety-related aspects.
The bill clarifies the definition of suppliers based on contract exposure. A senior government official involved in the deliberations explained the changes before the amendments were moved.
“The most important aspect was to bring Section 17 on par with international benchmarks. The other was to clarify the definition of suppliers and address the concerns raised by domestic nuclear equipment manufacturers that sub-suppliers are also deemed to be included in the current definition, given that there is no distinction of the terms supplier in the current legislation,” the official told The Indian Express.
Smaller Indian vendors raised concerns about being classified as suppliers and facing unlimited liability. The SHANTI Bill makes provisions for graded liability caps for nuclear power operators based on their order size.
What Changes In Safety Rules?
The bill grants statutory status to the Atomic Energy Regulatory Board, which currently functions under an executive order. This institutional reform aims to strengthen regulatory independence, enhance safety oversight and foster public confidence.
All operators, public or private, will require government licenses and safety clearances from the AERB before starting operations. The board is empowered to demand that the right of recourse be expressly provided in contracts while clearing future deals.
An official said nuclear projects in India must go through vetting by the AERB. The board can ask for specific provisions while approving contracts. The capping of liability for equipment vendors supports this regulatory approach.
Penalties for violations range from five lakh rupees for minor breaches to one crore rupees for serious offenses. The bill proposes setting up an Atomic Energy Redressal Advisory Council to resolve disputes related to nuclear operations.
All entities involved in nuclear energy production will be required to obtain safety authorization from the Atomic Energy Regulatory Board. This applies equally to government and private operators.
Why Foreign Companies Want In?
Global suppliers including Westinghouse Electric and GE-Hitachi from the United States, France’s EDF and Russia’s Rosatom have expressed interest in providing technology and equipment for India’s nuclear projects. The bill proposes foreign direct investment in joint ventures with Indian firms.
These companies stayed away from India after the 2010 liability law made them vulnerable to lawsuits. The new framework cuts their legal risk and makes insurance for vendors viable. This change is expected to draw global technology and investment.
The legal amendments are also part of India’s efforts to strengthen its negotiating stance with the United States. Efforts are underway to revive stalled trade talks. The nuclear sector opening could facilitate broader economic cooperation.
Sources in the government indicated that equity infusion rules in the nuclear sector would be aligned with foreign equity participation guidelines for other sectors. These follow Ministry of Commerce and Industry norms set by the Department for Promotion of Industry and Internal Trade.
Why SMRs Matter For Growth?
Small modular reactors are increasingly important for nuclear energy to remain commercially competitive. These compact reactors are easier to build, require less upfront capital and can be manufactured in factories before site installation.
West Asia sovereign funds have shown interest in financing India’s SMR manufacturing capabilities. Getting into this value chain could position India as a regional hub for advanced nuclear technology.
The bill creates space for adopting newer technologies including small modular reactors within a regulated environment. This flexibility allows India to benefit from global innovations while maintaining safety standards.
Major Indian conglomerates including Tata Power, Adani Power and Reliance Industries have announced plans to invest in nuclear power. These companies have the financial strength to execute large infrastructure projects and can partner with foreign technology providers.
What Bill Means For Energy?
The SHANTI Bill is central to India’s strategy to scale up clean, baseload power as renewable energy expands. Solar and wind generation fluctuates based on weather conditions. Nuclear power provides consistent electricity that can complement renewable sources.
To reach the 100 gigawatt nuclear target by 2047, the government argues that private capital, advanced technology and global partnerships are essential. The current capacity of 8.2 gigawatts would need to grow more than twelvefold over the next two decades.
This expansion requires investments estimated in hundreds of billions of dollars. The government cannot fund this alone. Opening the sector to private players creates multiple funding sources and accelerates project execution.
The framework enables participation in project development, plant construction and supporting infrastructure while maintaining public control over core strategic assets. This balanced approach aims to attract investment without compromising national security interests.
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