By Somesh Kumar, Partner and Leader, Power & Utilities, EY India
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 is a comprehensive piece of legislation introduced to replace the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. Its primary goal is to modernize India’s nuclear framework, enabling private sector participation while maintaining strict government control over strategic assets and safety requirements.
The Bill seeks to rapidly expand India’ss nuclear energy capacity to meet decarbonization goals (Net Zero by 2070) and energy independence targets. It shifts the sector from a government monopoly to a collaborative model where private players can build and operate reactors, while the government retains control over sensitive fuel cycle activities.
1. How does the SHANTI Bill fundamentally restructure India’s nuclear energy framework?
The SHANTI Bill represents a structural overhaul of India’s nuclear legal framework, pivoting from state monopoly to liberalization. The Bill explicitly permits non-government companies and joint ventures to build and operate nuclear reactors under a licensing regime, ending decades of exclusivity for state enterprises. Crucially, it introduces a tiered regulatory approach: high-risk activities require a ‘License, ‘ while lower-risk applications like medical and industrial radiation operate under ‘Safety Authorisation’, reducing the compliance burden. To foster innovation, Section 9 exempts research, design, and development activities from licensing requirements, provided they are for peaceful purposes and do notinvolve sensitive fuel-cycle activities reserved for the state. Furthermore, the Bill reverses the historical ban on nuclear patents, amending the Patents Act, 1970 to allow intellectual property rights for inventions in peaceful nuclear applications, thereby incentivizing private R&D investment.
2. Who are the key stakeholders in this new ecosystem, and what are their new roles?
The Bill redefines responsibilities to create a balanced, collaborative ecosystem. The Central Government shifts from a monolithic operator to a strategic guardian, retaining exclusive control over ‘sensitive’ areas like uranium enrichment, spent fuel reprocessing, and heavy water production to ensure non-proliferation. Private Operators (licensees) assume the role of execution and operation; they must demonstrate financial and technical capability for the facility’s entire lifecycle, including decommissioning and waste management. The Atomic Energy Regulatory Board (AERB) is elevated to a statutory body with independent powers to frame safety codes, conduct inspections, and impose penalties, ensuring rigorous oversight of new private entrants. Finally, the Research Community is formally recognized as a driver of innovation, with specific provisions allowing them to access small quantities of nuclear material for experimental purposes without onerous licensing.
3. What specific implications does this legislation have for India’s energy transition goals?
The SHANTI Bill is a legislative catalyst for India’s climate goals, specifically the target of achieving 100 GW of nuclear power by 2047 and Net Zero by 2070. By opening the door to private capital, the Bill aims to bridge the funding gap that has historically constrained capacity expansion. The tiered liability structure is particularly significant for the energy transition; specifically, the reduced liability cap of ₹300 crore for reactors between 150 MW and 750 MW makes Small Modular Reactors (SMRs) financially viable for industrial captive power and hydrogen production. This supports the decarbonization of hard-to-abate sectors like steel and cement. Additionally, the Bill emphasizes non-power uses in healthcare and agriculture, broadening the definition of nuclear energy’s contribution to national development beyond just electricity grid supply.
4. How does the 2025 regime compare to the previous legal framework of 1962?
The SHANTI Bill repeals and replaces the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, modernizing a 60-year-old framework. The 1962 regime was characterized by strict state monopoly and secrecy; the 2025 Bill pivots towards transparency and collaboration. A critical differentiator is Intellectual Property: where the 1962 Act (read with the Patents Act) prohibited nuclear patents, the new Bill explicitly amends the Patents Act to allow them, unlocking commercial value for innovators. The regulatory landscape also evolves significantly: previously, the AERB was a subordinate office; now, it is a statutory authority with the power to recruit its own staff and manage its own budget. This separation of "regulation" from "promotion" aligns India with global best practices, addressing a long-standing critique of the old regime.
5. How are risk and liability managed for private investors and the public?
The Bill establishes a clear, predictable liability framework essential for private investment. It upholds the principle of strict liability, where the operator is solely liable for damages regardless of fault. However, unlike the 2010 Act which created ambiguity for suppliers, the SHANTI Bill clearly limits the operator’s Right of Recourse (the ability to sue suppliers) to only cases where it is expressly contractually agreed or where intent to cause damage is proven. Financial risk is structured through tiered caps: ₹3,000 crore for large reactors (>3,600 MW) down to ₹100 crore for small facilities, with the Central Government legally bound to cover claims exceeding these limits. To expedite justice, the Bill bars civil courts from jurisdiction and instead establishes specialized Claims Commissioners and a Nuclear Damage Claims Commission to adjudicate disputes and award compensation.
6. What technology and material support will India need for its nuclear program, which countries could be key partners, what domestic policies can be explored further to advance fuel security from domestic resources such as thorium?
Small Modular Reactors (SMRs) and Advanced Manufacturing are the primary technological drivers for scaling nuclear energy globally at speed and scale, alongside critical innovations in safety, fuel and materials. These advancements address historical bottlenecks like high capital costs, long construction times, and safety concerns. Versatility is the key for grid flexibility and non-electric applications like hydrogen production and desalination, making them viable for decarbonizing heavy industry. Additionally, Nuclear-grade supply chains, particularly for high-temperature resistant corrosion free materials is vital. Key partners include Russia, France, USA, Japan, South Korea, Canada, Kazakhstan, Australia, etc. Toadvance fuel security via thorium, domestic policies must accelerate the Three-Stage Nuclear Program, specifically the deployment of the Advanced Heavy Water Reactor