India’s nuclear energy framework has remained largely unchanged for decades, governed by laws enacted in a very different economic and strategic context. The passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 marks a decisive shift in this approach. By opening the nuclear sector to private participation, restructuring liability norms, and tightening executive control over information, the Bill fundamentally reshapes how nuclear power will be governed, financed, and regulated in India.

The government has justified this reform as a necessary step to meet India’s ambitious target of achieving 100 GW of nuclear energy capacity by 2047, while critics argue that it raises serious concerns regarding accountability, transparency, and public safety.

Replacing the Old Nuclear Legal Framework:

Once notified, the SHANTI Bill will replace two cornerstone legislations:

1.    The Atomic Energy Act, 1962, which established a state monopoly over nuclear activities

2.   The Civil Liability for Nuclear Damage Act, 2010, which laid down a stringent liability regime following global nuclear disasters

These laws, though designed to protect national security and public interest, were increasingly seen as barriers to investment, technological collaboration, and capacity expansion. The SHANTI Bill seeks to address these constraints through structural reform.

Opening the Nuclear Sector to Private Players

One of the most transformative aspects of the SHANTI Bill is the entry of private companies into nuclear power generation. For the first time, both public and private entities are legally permitted to establish and operate nuclear power plants in India.

In addition to power generation, private players may now engage in activities such as:

1.    Transport and storage of nuclear fuel

2.    Import and export of nuclear technology and equipment

3.    Handling of prescribed nuclear minerals

Earlier, these activities were almost entirely restricted to public sector undertakings. The reform is intended to mobilize private capital, enhance efficiency, and accelerate capacity addition.

Activities Reserved Exclusively for the State

Despite liberalization, the Bill draws clear red lines around highly sensitive nuclear functions. Certain activities remain under the exclusive control of the Central Government, including:

1.    Enrichment and isotopic separation of radioactive substances

2.    Reprocessing of spent nuclear fuel

3.    Management of high-level radioactive waste

4.    Production and upgradation of heavy water

This ensures that core strategic functions remain insulated from commercial influence and proliferation risks.

Safety and Regulatory Oversight Remain Central

The SHANTI Bill retains a stringent safety architecture, with the Atomic Energy Regulatory Board (AERB) continuing as the key regulator. All entities, whether public or private, must obtain mandatory authorization for:

1.    Manufacture, possession, and use of radioactive substances

2.    Transport, import, and export of nuclear materials

3.    Establishment, operation, and decommissioning of nuclear facilities

4.    This provision aims to reassure the public that opening the sector does not mean dilution of safety standards.

Foreign Investment Through a Controlled Route

The Bill does not explicitly allow foreign direct investment in nuclear power. However, it introduces flexibility by permitting participation by any person notified by the Central Government.

This provision creates scope for indirect foreign involvement, subject to government approval and alignment with prevailing foreign investment policies. Detailed operational clarity is expected to emerge through future rules and notifications.

Reforming Nuclear Accident Liability

The most debated aspect of the SHANTI Bill relates to nuclear liability.

Dilution of Supplier Liability

Under the Civil Liability for Nuclear Damage Act, 2010, operators had a statutory right to seek compensation from suppliers if a nuclear accident resulted from defective equipment or negligent services. This provision, particularly Section 17, had made foreign suppliers reluctant to enter the Indian market.

The SHANTI Bill significantly narrows this liability. It retains:

1.    Contractual liability only if expressly agreed in writing

2.    Personal criminal liability in cases of intentional wrongdoing

However, it removes the provision allowing recourse against suppliers for latent or patent defects. This effectively shields equipment manufacturers from long term and uncertain liability exposure, aligning India with international nuclear liability norms.

Introduction of Graded Liability Caps

The earlier regime imposed a flat liability cap of ₹1,500 crore for large nuclear installations. The SHANTI Bill replaces this with graded liability caps, linked to the size and capacity of nuclear facilities.

This risk-based approach aims to reflect differing hazard profiles of installations and create a more rational compensation framework.

Insurance and Financial Security Provisions

The Bill mandates private operators to maintain insurance or other financial security to cover potential nuclear damage. Government owned installations, however, are exempt from this requirement.

To address this, the law authorizes the creation of a Nuclear Liability Fund, which the Central Government may use to meet its compensation obligations in the event of a nuclear incident.

Strengthened Penalty Framework

Unlike earlier laws, the SHANTI Bill introduces a two-tier penalty system:

1.    Monetary penalties for minor or procedural violations

2.    Imprisonment for serious offences involving grave safety breaches

This allows regulators to respond proportionately to different kinds of violations and strengthens enforcement capacity.

The Transparency Debate and RTI Override

One of the most controversial provisions is Section 39, which explicitly overrides the Right to Information Act, 2005. It empowers the Central Government to declare broad categories of nuclear related information as restricted.

Once classified, such information is completely exempt from disclosure, without any balancing test, appeal mechanism, or public interest override. This is a significant departure from the RTI framework, where exemptions are conditional and subject to review.

Critics argue that this could:

1.    Institutionalize secrecy

2.    Weaken democratic accountability

3.    Reduce independent scrutiny, especially with private players entering the sector

Conclusion

The SHANTI Bill, 2025 represents a historic shift in India’s nuclear policy. It seeks to balance energy security and climate commitments with investment facilitation and global integration. At the same time, it raises important questions about liability dilution, transparency, and executive discretion.

Whether the Bill succeeds will depend not only on its implementation but also on the robustness of regulatory oversight, judicial scrutiny, and public accountability mechanisms. As India moves towards a nuclear-powered future, the challenge will be to ensure that growth does not come at the cost of safety, transparency, and constitutional values.