By Subhro Paul, Central Power Engineering Service, Director; and Praveen Kumar Sahukari, Central Power Engineering Service, Deputy Director, Central Electricity Authority
India aspires to become Viksit Bharat by 2047, which will necessitate sustained economic growth of 8-9 per cent per annum. This growth trajectory will, in turn, drive a substantial increase in energy demand, with per capita electricity consumption expected to rise to around 4,000 kWh by 2047. To meet this demand sustainably and achieve the target of net-zero emissions by 2070, India must diversify its energy portfolio. As of October 31, 2025, India’s total installed power capacity (generation) stood at 505 GW, comprising 44.22 per cent from thermal sources, 54.20 per cent from renewables and 1.58 per cent from nuclear sources. The total installed capacity of nuclear power is 8.78 GW. To formalise the significant role expected to be played by nuclear energy in the power infrastructure in 2047, the Indian government, in Union Budget 2025-26, announced the Nuclear Energy Mission, which aims to develop at least 100 GW of nuclear capacity by 2047.
India’s nuclear power programme was majorly dependent on public sector enterprises such as Nuclear Power Corporation of India Limited, as well as indigenous research and development. Under this paradigm, the sector has seen remarkable technological advancements, culminating in the development of the 700 MW indigenous pressurised heavy water reactor. In addition, a 500 MW prototype fast breeder reactor, designed by the Indra Gandhi Centre for Atomic Research, is nearing completion, which would launch the second stage of the three-stage nuclear programme envisioned by Homi J. Bhabha. However, the sector’s growth was constrained due to technical, financial, geopolitical and legal reasons. The US-India Civil Nuclear Agreement, finalised in 2008, allowing full civilian nuclear energy cooperation and the subsequent Nuclear Suppliers Group waiver, opened access to global uranium markets and unlocked possibilities for foreign collaboration.
Encouraged by the US-India Civil Nuclear Agreement, targets of 20 GW by 2020 were projected, and negotiations with international suppliers from the US, France and Russia were initiated. Although the US-India agreement facilitated fuel supplies, capacity addition in power generation through foreign collaboration (except with Russia) could not materialise, due to the following reasons:
High capital costs and need for finance: Atomic energy plants are capital-intensive. Large-scale funding is required to meet the targeted nuclear capacity. However, under the Atomic Energy Act, 1962, the exclusive rights to produce, develop and use atomic energy, and to manufacture or acquire materials and equipment associated with it, lie solely with the central government or a government entity, thereby legally restricting the core nuclear functions to public entities. This provision was initially included to ensure safety and security; however, it prevented India from taking advantage of different global models of public-private participation in nuclear plant construction and operation. While Russia (Rosatom), China (China National Nuclear Corporation and China General Nuclear Power Group), South Korea (Korea Hydro & Nuclear Power) and many emerging nuclear states typically keep all nuclear power plants under state-owned enterprises, a mixed approach is followed in France (EDF), Sweden (Vattenfall and partners), Finland (Fortum and Teollisuuden Voima Oyj), and Spain (Iberdrola, Endesa and Naturgy), with varying shareholding combinations. Further, in the UK, the US, Belgium and Switzerland, nuclear plants are primarily under private ownership.
Issues with respect to operator and supplier liability, as per the Civil Liability for Nuclear Damage Act (CLND), 2010: The CLND Act was enacted to ensure that, in the event of a nuclear accident, victims receive prompt and adequate compensation. Internationally, the compensation for nuclear damage is governed by the Convention on Supplementary Compensation (CSC) for Nuclear Damage. Major issues related to the non-alignment of the CLND Act with the CSC are detailed below:
Section 17 of the CLND Act permits the operator to exercise the right of recourse against suppliers under three conditions: one, if a contract explicitly allows it; second, if there is intent to cause damage; and third, if the incident results from supplier actions such as latent defects and sub-standard services. Suppliers had pointed out that the third provision is not aligned with the CSC. One concern arises from the fact that even if the supplier provides equipment of Rs 100 million, the operator may seek recourse up to the actual damage, which may go beyond the invoice value. This leads to financial uncertainty for equipment suppliers. Second, foreign technology partners were reluctant to commit to a regime where liability outside the contractual provisions could be put on the supplier.
Additionally, under Section 46 of the CLND Act, the operator, and through recourse, the supplier, was liable to be sued for additional compensation under any other law in force in addition to its liability under the CLND Act. This created uncertainty in assessing risk for suppliers and operators.
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, addresses the above problems and opens private sector participation and clarifies the liability of operators and suppliers in order to achieve energy independence, with a roadmap for decarbonising the economy by 2070 and achieving 100 GW of nuclear power capacity by 2047. The salient features of the SHANTI Act are outlined below:
- Single law: The law consolidates provisions in the Atomic Energy Act, 1962, and the CLND Act, 2010, thereby bringing regulation, enforcement, civil liability and dispute resolution under a single statute, reducing legal complexity and compliance uncertainty.
- Private sector participation: Through a license and safety authorisation, any company, joint venture company or department under the Indian government is permitted to set up facilities and activities for the production, use and disposal of nuclear energy, including the import, export, acquisition or possession of nuclear fuel or prescribed substance. The central government reserves certain activities of sensitive nature under its exclusive control.
- Regulatory certainty in licensing: The licensing can be modified, suspended, cancelled or curtailed if the licensee is owned, controlled or dominated by entities causing or capable of causing harm to defence and national security or health and safety of the public. Further, if the financial position of the licensee is deteriorated to such an extent that the business is no longer able to operate in a safe, secure or reliable manner, and the continuance of business is detrimental to public health, public safety, the environment or national security, appropriate regulatory action may be taken. However, sufficient time is provided to the licensee to take all measures to comply with the directions issued by the central government to avoid the cancellation of the license.
- Operator’s right of recourse on the supplier aligned with the CSC: The operator’s right of recourse is limited to what is expressly provided in the contract and to nuclear incidents caused solely by the supplier. These provisions are in line with Article 10 of the Convention on Supplementary Compensation for Nuclear Damage, 1997, thereby addressing the supplier’s issues.
- Statutory status conferred to the Atomic Energy Regulatory Board (AERB): Until now, the AERB was a non-statutory body, as it was constituted by an executive order of the President of India rather than a separate, specific act of Parliament. By providing statutory status, the autonomous functioning of the board can be ensured as an independent safety body.
- Creation of the Atomic Energy Redressal Advisory Council: Any licensee or holder of a safety authorisation who is aggrieved by an order or decision of the government or the AERB may submit an application for review to the council. The creation of this council is aimed at lessening the legal burden on tribunals and courts.
- Appeals in the Appellate Tribunal for Electricity (APTEL): Any person aggrieved by an order of the council, a government decision or the AERB can appeal before APTEL, which was established under Section 110 of the Electricity Act, 2003. To hear appeals, a maximum of two technical member (atomic energy) posts will be created in APTEL.
By addressing regulatory fragmentation, liability uncertainty and institutional limitations, the SHANTI Act, 2025, represents a decisive shift in India’s nuclear governance framework. The act balances safety, security and public accountability with the need for investment certainty and technological collaboration. In doing so, it lays the legal and institutional foundation for large-scale private participation, accelerated nuclear capacity addition and the integration of nuclear power as a central pillar of India’s long-term clean energy transition. If implemented effectively, the act could prove instrumental in enabling India to meet its energy security objectives, climate commitments and developmental aspirations under the Viksit Bharat @2047 vision.
(The views expressed by the authors are personal and do not represent the views of the organisation.)
