Parliament Passes SHANTI Bill, 2025, Overhauling India’s Nuclear Energy Laws and Opening Sector to Private Participation

Parliament on December 18, 2025, passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, ushering in a comprehensive overhaul of India’s nuclear energy legal framework. The new legislation replaces the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, marking a major policy shift aimed at expanding nuclear power generation and modernising regulation and liability norms.

The Atomic Energy Act of 1962 governed the development, control and use of atomic energy in India, while the 2010 law laid down the liability and compensation framework in the event of a nuclear incident. By consolidating and updating these laws, the SHANTI Act seeks to align nuclear regulation with India’s long-term energy transition goals and make the sector more attractive for investment.

One of the most significant changes introduced by the law is the opening up of several nuclear activities to non-government entities. Under the earlier regime, licences for activities such as atomic mineral mining and the production, use or trade of nuclear substances could be granted only to central government entities or government companies. The new law empowers the Centre to grant licences for specified activities to Indian private companies, joint ventures between government entities and private firms, and other persons specifically permitted by the central government. Companies incorporated outside India, however, continue to be barred.

The activities that can now be opened up include building, owning and operating nuclear plants or reactors, as well as the fabrication, transport, trade and storage of nuclear fuel. At the same time, the law retains a strong regulatory framework by mandating that any activity involving radiation exposure must receive safety authorisation from the Atomic Energy Regulatory Board (AERB).

On nuclear liability, Parliament has largely retained the core principles of the Civil Liability for Nuclear Damage Act, 2010. The no-fault liability regime continues, under which the operator of a nuclear installation is liable to compensate victims of a nuclear incident irrespective of negligence or intent. Operators will still be required to maintain insurance cover, with the central government stepping in to bear liability beyond the prescribed cap. Exemptions from liability in certain cases, such as specified natural disasters, have also been retained.

However, the law introduces a revised, tiered liability structure. While the 2010 Act fixed a uniform maximum liability of Rs 1,500 crore for nuclear reactors with a thermal capacity of 10 megawatts or more, the new legislation provides for liability limits ranging from Rs 100 crore to Rs 3,000 crore, depending on the power capacity of the nuclear installation.

A key change has been made to the operator’s right of recourse against suppliers. Under the earlier law, operators could recover compensation from suppliers in cases where a nuclear incident was caused by defective equipment or materials. The new law removes this ground for recourse, while retaining the right where recovery is contractually agreed upon or where the incident is caused by a deliberate act intended to cause damage. This amendment is expected to address long-standing concerns of nuclear equipment suppliers over open-ended liability exposure.

The SHANTI Act also expands the territorial scope of compensation claims. Unlike the 2010 law, which limited claims to damage suffered within India’s territory or jurisdiction, the new legislation extends coverage to nuclear damage occurring in a foreign country due to an incident in India, subject to specified conditions.

Another major development is the grant of statutory status to the Atomic Energy Regulatory Board, which until now functioned through executive orders. The AERB will be responsible for ensuring the safe use of radiation and nuclear energy and will consist of a chairperson, one whole-time member and up to seven part-time members appointed by the central government. The chairperson and the whole-time member must be persons of eminence in the field of nuclear energy.

Appointments to the Board will be made on the recommendation of a search-cum-selection committee constituted by the Atomic Energy Commission, with the AERB chairperson included when appointments to the Board are considered. Members will hold office for an initial term of three years, which may be extended by another three years.

The law also provides for the creation of an Atomic Energy Redressal Advisory Council to hear appeals against decisions or orders of the central government or the AERB. The Council will be chaired by the Chairperson of the Atomic Energy Commission and will include the Director of the Bhabha Atomic Research Centre, the Chairperson of the AERB and the Chairperson of the Central Electricity Authority. Appeals against the Council’s decisions will lie before the Appellate Tribunal for Electricity.