Introduction: Bridging the Decades
For over sixty years, India’s nuclear energy sector remained a state-controlled fortress, governed by the legacy of the Atomic Energy Act, 1962. While this framework was pivotal in establishing India's self-reliance and its unique three-stage nuclear programme, it was structurally ill-equipped to meet the skyrocketing energy demands of a modern "Viksit Bharat".The introduction of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, marks a historic overhaul. By repealing both the 1962 Act and the Civil Liability for Nuclear Damage Act (CLNDA), 2010, the SHANTI Act creates a unified, private-sector-friendly regime designed to achieve 100 GW of nuclear capacity by 2047.
The Technical Core: Why Now?
India's current nuclear capacity stands at approximately 8.78 GW, contributing only about 3% to the total electricity generation. As the nation pivots towards Net Zero by 2070 and rapid expansion in AI, quantum computing, and semiconductor manufacturing, the need for stable, carbon-free baseload power has never been more urgent.Traditional large-scale reactors face long gestation periods and high capital costs. The SHANTI Act addresses this by prioritizing Small Modular Reactors (SMRs)—advanced units typically generating between 50–300 MW that are factory-built and assembled on-site.
Key Pillars of the Reform
1. Opening the Gates to Private Participation
Under the old regime, nuclear ownership was restricted to the Central Government and its companies, primarily the Nuclear Power Corporation of India Limited (NPCIL). The SHANTI Act fundamentally changes this:
Broad Eligibility: It permits "any other company" or "person" (expressly permitted by the Centre) to apply for a nuclear license.
Scope of Activities: Private players can now build, own, operate, and decommission nuclear reactors. They can also engage in fuel fabrication and the transport/storage of nuclear fuel.
Equity and Investment: The reform allows private companies up to 49% equity participation in nuclear projects, opening pathways for domestic giants like Tata Power, Reliance, and Adani, as well as foreign Sovereign Wealth Funds.
2. Recalibrating Liability: The "Right of Recourse" Debate
One of the most significant deterrents for global technology suppliers (like Westinghouse or EDF) was Section 17(b) of the CLNDA 2010. This provision allowed operators to seek compensation from equipment suppliers for any "latent defects" or sub-standard services, even without proof of intent to cause harm.
The SHANTI Act aligns India with the Convention on Supplementary Compensation (CSC):
Operator Liability: Liability is now strictly channeled to the operator, with the "right of recourse" against suppliers limited only to cases involving express written contracts or intentional misconduct.
Graded Liability Caps: Instead of a flat limit, the new law adopts graded liability caps based on reactor size (ranging from ₹100 crore for small units to ₹3,000 crore for large reactors above 3,600 MW).
3. Statutory Autonomy for the Regulator
For decades, the Atomic Energy Regulatory Board (AERB) operated as a subordinate body under the Department of Atomic Energy (DAE), leading to concerns over institutional overlap between the regulator and the operator.
The SHANTI Act grants statutory status to the AERB, fundamentally changing its institutional position.
Its powers are now legally defined, ensuring functional independence and making it an impartial arbitrator for foreign investors.
Strategic Importance: The SMR Pivot and Thorium
The Act is the legal engine for the Nuclear Energy Mission for Viksit Bharat, backed by a ₹20,000 crore budgetary allocation for SMR R&D.
Indigenous Designs: India is developing the BSMR-200 (Bharat Small Modular Reactor) and the SMR-55, leveraging its expertise in PHWR technology.
The Thorium Goal: The reform supports the eventual transition to India’s abundant Thorium reserves in the third stage of its nuclear programme. SMRs can act as ideal testbeds for irradiating thorium using High-Assay Low-Enriched Uranium (HALEU) as a driver fuel.
Challenges and Concerns
Despite the optimism, the SHANTI Bill has faced criticism:
Transparency Issues: Section 39 of the Act allows the Centre to declare wide-ranging categories of information as “restricted,” explicitly overriding the Right to Information (RTI) Act, 2005. This removes the public interest override and the possibility of legal appeals for such information.
Economic Competition: The Levelized Cost of Electricity (LCOE) for nuclear remains higher (approx. $110/MWh) compared to solar and wind, raising questions about its long-term cost-competitiveness.
Public Perception: Managing the historical skepticism surrounding nuclear safety remains a persistent hurdle for widespread deployment.
Conclusion
The SHANTI Act 2025 represents a pragmatic middle path between an outdated state monopoly and unregulated private entry. By modernizing liability norms, strengthening the regulator, and inviting private capital, India is positioning itself not just as a consumer of nuclear energy, but as a future global hub for advanced nuclear technology and exports.
Prelims Question
Q. With reference to the SHANTI Bill, 2025, consider the following statements:
It grants statutory status to the Atomic Energy Regulatory Board (AERB).
It allows for up to 74% foreign direct investment in the operation of nuclear reactors.
It omits the provision that previously allowed nuclear plant operators to seek compensation from suppliers for latent equipment defects.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Correct Answer: (b) 1 and 3 only.
Explanation: Statement 1 is correct. Statement 2 is incorrect; while it permits private participation, indications suggest alignment with DPIIT norms, and cabinet notes mentioned phased investment of up to 49%. Statement 3 is correct; the new law omits the “right of recourse” for latent defects to align with international norms.
Mains Question
“The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, marks a paradigm shift in India’s atomic governance. Discuss how the proposed reforms address the long-standing challenges of the civil nuclear sector while evaluating the concerns raised regarding transparency and safety.” (15 Marks, 250 Words)
Answer:
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, marks the most significant legislative overhaul of India’s nuclear regime since 1962. It aims to scale capacity to 100 GW by 2047 by integrating private participation and modernizing liability frameworks.
Addressing Long-standing Challenges:
Ending State Monopoly: By repealing the Atomic Energy Act (1962), the Bill allows private entities to build and operate reactors, particularly Small Modular Reactors (SMRs). This addresses the challenge of limited public funding and allows for decentralized captive power in energy-intensive industries.
Liability Resolution: It repeals the CLNDA (2010), aligning India with the Convention on Supplementary Compensation (CSC). By channeling liability strictly to the operator and limiting the “right of recourse” against suppliers to express contracts, it removes the “chilling effect” that deterred global technology providers.
Regulatory Independence: Granting statutory status to the Atomic Energy Regulatory Board (AERB) addresses the historical concern of functional overlap between the regulator and the promoter (DAE).
Evaluation of Concerns:
Transparency: Section 39 explicitly overrides the RTI Act (2005), allowing the Centre to restrict information on reactor design, location, and substance transactions. This lack of a “public interest override” limits civil society oversight.
Safety & Liability Caps: Critics argue that graded liability caps (up to ₹3,000 crore) are insufficient compared to the potential $200 billion cost of a major accident like Fukushima. Furthermore, removing civil court jurisdiction in favor of government-appointed committees may impede fair compensation.
Conclusion:
While the SHANTI Bill provides the “ease of doing business” necessary for a clean energy transition, its success depends on balancing commercial secrecy with robust public safety standards and institutional transparency.