The SHANTI Act 2025 and India’s Transition to a Modern Nuclear Energy Regime

For a long time, India’s nuclear energy sector has been operated exclusively by the Central Government and the Public Sector Undertakings (PSUs). While this served the nation’s early strategic needs, it eventually became a bottleneck for the massive energy scale-up required for a modern economy. As the global climate catastrophe worsens and India’s need for reliable, carbon-free power reaches a crucial level, the previous regulations are no longer sufficient.

To address this, the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 is a significant legislative move that has been passed by the Indian Parliament in its Winter Session of 2025. In order to boost nuclear power capacity, attract private investment, and align the sector with long-term energy and climate goals, the SHANTI Act is a comprehensive overhaul of India’s current nuclear laws. The Act aims to achieve this goal by consolidating the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, into one unified legal framework. By substituting a single, unified statute for the previous legal framework, it modernizes private sector participation, liability, and regulation across the nuclear value chain. 

The Shift from State-Monopoly to Commercial-Partnership

The transition from the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act 2010 to the SHANTI Act represents a strategic shift from a “state-monopoly” mindset to a modern “commercial-partnership” model. While the existing laws were foundational for India’s initial nuclear security, they have become structural bottlenecks in the pursuit of clean energy goals and global investment. To understand why such a recalibration is necessary, one must look at the drawbacks of India’s existing nuclear laws, which were crafted for a closed, state-dominated nuclear regime rather than today’s investment-driven clean-energy economy.

Till now, the Atomic Energy Act, 1962 was the main legal framework for nuclear activities in India. It empowered the Central Government with nearly complete control over the production, development and disposal of atomic energy. Key points include the government’s total ownership of “prescribed substances” like uranium and thorium. It also had the authority to declare certain sites as “prohibited areas” and can classify nuclear data as restricted for national security. However, the centralized power structure is increasingly seen as a barrier to expanding commercial nuclear energy today.

The Civil Liability for Nuclear Damage Act, 2010 provides for compensation if there is a nuclear accident. It places strict, no-fault liability on the operator, with a limit of ₹1,500 crore. The Act aims to speed up claims through a dedicated Commissioner, but it has faced criticism. The existing legal framework allows the operator to seek compensation from suppliers for faulty equipment. This goes against international standards and has discouraged foreign investment. Critics also say the overall liability caps are too low compared to the possible costs of a major disaster, and that the 20-year deadline for personal injury claims might pass before radiation effects are known.

Structural and legal changes under the Act

The SHANTI Act sets out clear and structured objectives, which serve as the foundation of its provisions. One of the primary objectives is to remove ambiguities from earlier frameworks by creating universal standards, definitions, and practices that are applicable across relevant industries. In addition, the Act outlines a plan to meet the ever-increasing energy needs of the country. It looks at long-term baseload and industrial needs, imagining a future for Small Modular Reactor technology. It aligns India’s nuclear program with the international norms of nuclear accountability and nuclear safety. By using nuclear power extensively, India aims to augment energy security and overcome climate challenges.

Private Indian companies as well as foreign entities can construct, own, operate, and shut down nuclear power plants under a license. The SHANTI Act further grants legal status to the Atomic Energy Regulatory Board (AERB). This makes it an independent regulator accountable to Parliament. The AERB has the authority to license, inspect, enforce safety standards, and even take control of nuclear materials or facilities during emergencies or serious safety violations. Regarding civil nuclear liability, the Act replaces the earlier system under the Civil Liability for Nuclear Damage Act, 2010 with a new setup where plant operators are fully responsible for nuclear damage. This removes the liability of suppliers. The operators’ liability is capped and tied to the plant’s capacity. They are required to have insurance through options like the Indian Nuclear Insurance Pool, which offers graded limits to lessen uncertainty while providing a safety net for compensation.

The Act further introduces several operational and institutional changes;

• Licensing and safety authorisation: Any entity involved in nuclear or radiation activities must obtain a licence and safety authorisation from AERB. This covers the entire facility lifecycle and associated activities.

• Dispute resolution mechanism: It establishes the Nuclear Damage Claims Commission and allows the Appellate Tribunal for Electricity established under the Electricity Act 2003 to handle specific nuclear disputes.

• A dedicated “Nuclear Energy Mission”: It supports the use of indigenous Small Modular Reactors to replace coal and help industries facing carbon costs.

• A regulatory framework: it is to fecilitate the use of nuclear and radiation technologies in business, research, agriculture, health care, and other peaceful uses.

• The Central Government or its wholly owned institutions are the only ones permitted to engage in several critical nuclear fuel cycle activities under the Act. These include the production and upgrading of heavy water, the management of spent fuel, including reprocessing, recycling, radionuclide separation, and high-level waste handling, enrichment or isotopic separation of prescribed or radioactive substances (unless otherwise notified), and any other facilities or activities that the government has specifically notified.

Conclusion: Navigating the New Compliance Landscape

The passage of SHANTI Act represents a major shift in India’s nuclear landscape- a move from “state-only” energy security model to a “regulated, collaborative” approach. This Act’s balance is what makes it significant. While maintaining control over the most delicate aspects of the nuclear cycle, like enrichment and waste management, it promotes private investment and the advantages of international technology collaborations. Further, by granting legal standing to AERB, the government has responded to persistent calls for a more autonomous safety authority. As the industry develops, this will be crucial for fostering public trust.

As India opens its nuclear sector to private and foreign players, navigating this complex new regulatory environment requires robust legal oversight. Lexplosion Solutions helps organizations adapt to these changes through our AI-driven SaaS platforms. Our solutions for regulatory compliance (Komrisk), contract lifecycle management (Komtrakt), and litigation management (Komlit), ensure that companies entering India’s energy sector remain compliant with latest regulations, allowing them to focus on powering a sustainable future.

Authored by: Anupriyo Guho

Co-Authored by: Amiya Mukherjee

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