The Indian government on Monday took a historic step by introducing a landmark bill to end the state monopoly on nuclear power generation. The proposed legislation, named the 'Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025' (SHANTI), paves the way for private sector participation in building, owning, and operating nuclear power plants and reactors across the country.
Unlocking Private Investment for Ambitious Nuclear Goals
Currently, this domain is restricted to government-owned companies. Approved by the Union Cabinet on Friday, December 12, the bill is a strategic move to attract massive investments. The goal is to help India achieve its ambitious target of 100 gigawatts (GW) of nuclear power capacity by 2047. A recent Goldman Sachs report underscores the potential scale, estimating that the government could place orders for 1,400 megawatts (MW) of nuclear reactors annually until fiscal year 2034 (FY34). The report further notes that orders for advanced small modular reactors (SMRs) are likely to begin from FY32.
Major Indian corporate giants have already signaled strong interest. Conglomerates like the Adani Group, Larsen & Toubro (L&T), and Tata Power Ltd have publicly expressed their desire to enter the nuclear energy space, awaiting a clear policy framework.
Key Provisions: Easing Liability and Defining Scope
Tabled by Union Minister of State for Atomic Energy, Dr. Jitendra Singh, the bill states that any government department, institution, company, joint venture, or any other entity permitted by the Centre can apply for a license to set up nuclear power facilities. This includes activities related to the import and transportation of nuclear fuel. However, the bill maintains central control over the sensitive process of enrichment or isotopic separation of radioactive substances.
A pivotal change in the SHANTI Bill is its approach to civil liability for nuclear damage. The bill aims to establish a "pragmatic civil liability regime". It holds the plant operator liable for damage from a nuclear incident. However, it provides exemptions if the incident is caused by an act of war, terrorism, or a grave natural disaster of an exceptional character.
The most significant shift for global suppliers is the proposed elimination of the contentious supplier liability clause—Section 46 of the Civil Liability for Nuclear Damage Act (CLND Act). This clause had long been a major concern for international companies supplying components and fuel, as they feared being held liable in case of an accident. The government now plans to scrap this section entirely to align with global standards and allay these fears.
"This should help in investments and achieving a trade deal with the US," said Kirit Parikh, former member (energy) of the Planning Commission. He emphasized that the liability clause had been a persistent concern for foreign partners.
Implications for Tariffs, Recourse, and India-US Ties
The bill also proposes changes to the 'right to recourse' for operators. While the existing CLND Act allows operators to seek recourse from suppliers for patent defects, the new bill omits this specific mention. Instead, it states that the operator can seek recourse where provided for in a written contract or if the incident was caused intentionally.
On the regulatory front, the bill proposes that the central government will fix tariffs for nuclear power. It also plans to establish an Atomic Energy Redressal Advisory Council, chaired by the Atomic Energy Commission head, to handle complaints and tariff matters.
Energy experts highlight that private participation will necessitate an independent regulator for competitive tariff determination. "It is critical to align civil nuclear liability for operators and suppliers with international standards to attract global technology providers as well as private investors," noted Anujesh Dwivedi, Partner at Deloitte India.
The move is also seen as a significant boost to India-US strategic and trade talks, where energy cooperation is a key pillar. India has been offering investment opportunities in the nascent SMR technology space to American firms. Industry leaders like Tata Power's CEO Praveer Sinha have stated they are keen on SMRs but awaited clarity on policy, liability, technology, and fuel sourcing.
With analysts projecting a total addressable market of ₹422,680 crore in the nuclear space for L&T by FY30, the SHANTI Bill 2025 marks the beginning of a new, transformative chapter in India's clean energy journey.
