India has enacted the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025, known as the SHANTI Act.

This legislation replaces the Atomic Energy Act, 1962, and the Civil Liability for Nuclear Damage Act, 2010. It forms a cornerstone of the nation's strategy for energy independence, net-zero emissions by 2070, and scaling nuclear capacity to 100 gigawatts by 2047.

A pivotal reform in the SHANTI Act involves cautiously permitting private entities to enter the nuclear sector. This aligns with the National Nuclear Mission outlined in the Union Budget 2025–26. The mission prioritises Bharat Small Reactors and Bharat Small Modular Reactors, envisioning a major role for private firms in power generation.

Under the SHANTI Act, licences are now mandatory for a wide array of nuclear activities. These include constructing, owning, operating, or decommissioning nuclear power plants and reactors. They also cover fabricating and processing nuclear fuel, such as uranium enrichment up to specified limits.

Licences extend to transporting, storing, importing, exporting, acquiring, or possessing nuclear fuel, spent fuel, or other designated substances. Importing or exporting prescribed equipment, technology, or software for nuclear purposes requires approval too. The Central Government can designate additional activities needing licences.

Eligible applicants span a broad spectrum. Government departments, state-owned bodies, government companies, private firms, joint ventures, and others explicitly permitted by the Central Government may apply. This marks a departure from prior constraints.

The Atomic Energy Act, 1962, barred licences for atomic energy plants or research to anyone outside Central Government entities or approved government companies. This effectively side-lined private participation in nuclear generation. The SHANTI Act lifts these barriers substantially.

However, the Act retains Central Government monopoly over sensitive areas. Enrichment or isotopic separation of radioactive substances remains exclusive, unless notified otherwise. Spent fuel management—including reprocessing, recycling, radionuclide separation, and high-level waste handling—is similarly reserved.

Mining uranium or thorium onshore or offshore, along with decommissioning such sites, is limited to the Government, government companies, or controlled corporations. These require licences and safety clearances. This framework balances openness with strategic safeguards.

Private involvement is thus encouraged in less sensitive nuclear value chain segments. Sovereign oversight persists for critical resources. This calibrated liberalisation supports India's energy goals without compromising security.

On nuclear liability, the SHANTI Act mirrors much of the CLND Act but introduces changes. It omits the CLND's strict, no-fault liability on operators. It also removes operators' right of recourse against suppliers for defects or substandard services.

Section 17(b) of the CLND Act had deterred international suppliers. It allowed recourse for patent or latent defects, diverging from norms under the Convention on Supplementary Compensation for Nuclear Damage. Suppliers faced unlimited liability risks, stalling projects.

By eliminating these provisions, the SHANTI Act fosters participation from private and foreign players. It aligns more closely with global standards, potentially unlocking investments in Indian nuclear infrastructure.

The Act further boosts indigenous innovation. The Central Government can now grant patents for inventions in peaceful nuclear energy and radiation uses. Exceptions apply to sensitive activities or those with national security implications, which vest with the Government.

Previously, the Atomic Energy Act prohibited all such patents outright. This stifled private research and development. The new provisions incentivise domestic R&D, spurring private innovation in the nuclear ecosystem.

The SHANTI Act heralds a transformative phase for India's civil nuclear landscape. It explicitly welcomes private sector entry. Yet, its success hinges on forthcoming rules, regulations, and policy tweaks.

Atomic energy remains a prohibited sector under foreign direct investment rules. Amending this will be essential. Consequential updates to allied laws must follow to realise the Act's ambitions fully.

Agencies