The SHANTI Bill: Modernising India’s Nuclear Energy Architecture

India’s nuclear trajectory is marked by scientific ambitions, technological self-reliance and isolation from international politics. The nuclear sector was mainly governed by the Atomic Energy Act, 1962, which was a highly centralised and state-controlled framework, prioritising safety and sovereignty. Later legislation, like the Civil Liability for Nuclear Damage Act, 2010 addressed accountability and victim compensation for nuclear incidents. 

Illustration by The Geostrata

However, India’s needs are shifting due to its energy requirements. This legislation is no longer suitable to address the growing demand for energy, climate commitments and blooming industrial needs. The Government of India, therefore, introduced the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, to address the structural inadequacies of the earlier policies and modernise its existing laws to meet the present-day requirements. 

OLD NUCLEAR REGIME

The Atomic Energy Act, 1962, is the foundational law, established to regulate nuclear activities in India. It establishes a state monopoly over nuclear activities, restricting private and foreign participation. This act gives the central government exclusive power to produce, develop, use and dispose of atomic energy, control mining and processing of materials like uranium and thorium, and regulate radioactive substances and nuclear plants. 

Under this act, the Atomic Energy Regulatory Board (AERB) was established to enforce safety regulations under the Atomic Energy Act, vested with the power to provide licenses, oversee compliance and take regulatory actions for nuclear facilities.

Over the years, the amendments to the act in 1986, 1987 and 2015 preserved the tight state-controlled atomic activities rather than reform, leaving the state’s monopoly over nuclear power generation intact. 

Working alongside this act is the Civil Liability for Nuclear Damage Act, 2010, which establishes a legal framework for civil liability and compensation for nuclear damage in India. The Act imposes strict liability on the operator of a nuclear installation for damage arising from a nuclear incident, subject to a prescribed financial cap, with joint and several liability where multiple operators are involved. 

LIMITS OF OLD NUCLEAR REGIME: CONTROL OVER EXPANSION

Although stringent oversight was justified by safety imperatives and India’s unique nuclear history, the Atomic Energy Act of 1962 and its subsequent amendments gradually turned into a constraint rather than a safeguard. The fragmented legal frameworks with no proactive governance, continued exclusion of private participation, heavy reliance on executive rules with limited regulated powers and limited statutory clarity slowed the sector’s ability to expand. 

Further, the Civil Liability for Nuclear Damage Act of 2010, which focused on compensation instead of prevention, aimed at providing compensation through sovereign responsibility, creating uncertainties for the suppliers, making investors from both foreign and private enterprises reluctant to invest in the sector. 

CHINA'S NUCLEAR GROWTH

China, from the last decade, is increasingly leveraging its nuclear power capacity, transforming itself into an alternative to major traditional suppliers like the USA, Russia, France and South Korea.

China has significantly evolved its domestic nuclear capacity from under 20 GW of installed capacity in 2014 to 53 GW across 55 operational reactors by mid-2025. Though China is not limiting itself to capacity building at the domestic level, it is also expanding its global strategic footprint, especially in Asia, through its Belt and Road Initiative(BRI), focusing on exporting reactors, fuel, and ancillary services. 

This rapid expansion is attributed to its regulatory framework, combining legislation enacted by the Standing Committee of the National People’s Congress with administrative regulations issued by the State Council, supported by a strong construction and delivery base, a large manufacturing base and a robust research and design backbone. 

Together, this integrated model enables China to align its industrial prowess with a state-controlled strategy, turning domestic civilian nuclear energy into a soft power and expanding its global outreach. 

WHY IS THE NEW NUCLEAR REGIME INEVITABLE?

With the changing nuclear landscape in Asia and India’s growing demand and commitments for clean energy, necessitates reforms in the old nuclear regime. Amid these dynamics, the government realised that nuclear power needs to be scaled up, which is stagnated at 3% with the present nuclear capacity of  8.78 GW and 24 operating reactors located across seven nuclear power plants, which the government finds to be inadequate to India’s Nuclear Energy Mission’s objectives. 

Besides the domestic need for scaling up nuclear power, asymmetry in the nuclear growth with China has alarmed India against the limited reach of the earlier legislation. China, through establishing itself as a robust nuclear exporter in Asia and is helping small nations, especially Pakistan, to develop their nuclear capabilities, risking India’s security and influence in the region. 

Therefore, the government introduced the SHANTI Bill “to provide for the promotion and development of nuclear energy and ionising radiation for nuclear power generation, application in healthcare, food, water, agriculture, industry, research, environment, innovation in nuclear science and technology, for the welfare of the people of India, and for robust regulatory framework for its safe and secure utilisation and for matters connected therewith or incidental thereto”. 

THE SHANTI BILL: CHANGES IT BROUGHT

Until now, India’s nuclear sector was governed by separate laws - The Atomic Energy Act, 1962 and Civil Liability for Nuclear Damage Act, 2010. The SHANTI Bill replaced old nuclear laws with one umbrella framework, closer to global nuclear commerce norms. The bill is a decisive move to modernise India’s nuclear framework, with its focused measures to enhance governance, safety and institutional mechanisms. 

One of the biggest changes introduced through the bill was ending the state monopoly over nuclear activities by integrating private players into the nuclear sector. This provision enables investment and expands capital and technology. However, the regulatory framework is still in place and strengthened through formal statutory status accorded to the AERB, reinforcing its regulatory independence and institutional authority.

Departing from a uniform statutory cap on operator liability, the SHANTI Bill adopts a graded liability framework and sets a ceiling for every nuclear incident at the rupee equivalent of 300 million Special Drawing Rights (SDRs), aligning with international standards.

The bill also places liability for a nuclear accident exclusively on the plant operator, with equipment suppliers explicitly excluded from liability, a move intended to resolve long-standing concerns expressed by international vendors. It also expands victim-recognised damage like long-term health, economic loss, environment, preventive costs and treats terror-related nuclear damage as sovereign risk, shifting liability to the Centre. 

In revamping governance, safety oversight and liability provisions, the SHANTI Bill positions India in a broader global nuclear landscape. These changes enable investments and capacity expansion in India’s nuclear sector, emphasising long-term climate strategy and strategic outlook.    

GLOBAL BENCHMARKS

The global benchmarks, like France, Russia and the U.S., of the nuclear sector combine a strict security outlook with a clear legal and independent regulatory framework. Following this, India's new nuclear policy has recalibrated its nuclear regulatory framework, bringing it closer to the Convention on Supplementary Compensation (CSC).

By refining liability provisions, reinforcing regulatory structures, and opening space for wider participation, India is attempting to align itself more closely with the operator-focused liability regimes and stable governance models. 

CONCLUSION

The SHANTI Bill marks a measured recalibration of India’s nuclear governance, easing long-standing constraints while retaining the state’s responsibility for safety and oversight. At the domestic level, it recognises that India’s energy transition and climate goals require clearer regulation, viable financing, and stronger institutions, whereas at the international level, it signals India’s willingness to align with global nuclear practices.

However, the real test of SHANTI lies in its credible regulation, effective liability mechanisms, and the preservation of a strong safety culture, while expanding capacity. 

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BY TANU V

TEAM GEOSTRATA

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