New Delhi: India’s nuclear energy sector has been under government control since the first Atomic Energy Act was passed in 1948. But the SHANTI Act, 2025 is about to change that. The newly-released rules are the first detailed steps that India has taken to open up the nuclear sector to private players, laying down licensing, insurance, and approval-related procedures, while ensuring the government still has control over sensitive activities.
The draft rules have been placed in the public domain for consultation, and feedback is welcome till 4 September 2026.
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, which received a presidential nod in December 2025, is set to replace the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage (CLND) Act of 2010. Its objectives are clear — to expand India’s nuclear energy capacity. The target is to generate 100GW of nuclear power by 2047, and set up at least five indigenous Small Modular Reactors (SMR), which are advanced nuclear fission plants, that can produce up to 300 megawatts of electricity by 2033.
Although India had an earlier framework for nuclear energy, the SHANTI Act opens it to private companies and joint ventures. Private firms can now build nuclear plants, own and operate them, decommission them, and take up nuclear research and development. The new Act also allows them to manufacture nuclear fuel and use ionising radiation for non-electricity related work with medicines, agriculture, and other industries.
The government will still have exclusive control over enrichment and isotopic separation of Uranium and Thorium, managing spent-fuel, and the production of heavy water, which acts as a coolant in several nuclear reactors.
For now, the Department of Atomic Energy has put out two draft documents — the draft SHANTI rules and the draft SHANTI regulations. While the Act itself is a broad legal framework, the rules explain how the government will implement it, and the regulations provide a detailed safety framework.
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Insurance, liability, and foreign tech
According to the rules, a nuclear operator must have an insurance policy, a financial security, or a combination of the two to cover their nuclear liability. This liability goes beyond what happens while the reactor is active and addresses the risks associated with spent fuel, radioactive material, and waste management.
While the earlier Act capped an operator’s liability to Rs 1,500 crores for any 10 MW reactor, the new framework has proposed a sliding structure.
Reactors having thermal power above 3,600 MW will have a liability of Rs 3,000 crore, which will taper down with lower capacity reactors, and stop at Rs 100 crore for reactors with thermal power up to 150 MW. If the damage is bigger than an operator’s liability, the Act allows the government to step in.
The government can also set up a Nuclear Liability Fund, put together through electricity tariffs. Since nuclear projects have extremely long lifetimes, the liability limits are to be reviewed every five years, to account for inflation, evolving nuclear technology, insurance markets, and the growing scale of India’s nuclear programme.
The framework also invites foreign technology and investment on the condition that foreign designs must be certified by the nuclear regulator in the country of origin, and that they must be operational in that country or elsewhere. This creates an important filter for the kind of foreign technology that might enter India’s nuclear sector.
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Making investments easier?
Another aspect of the framework which could make the nuclear sector more investment-friendly is the ‘in-principle approval’ system. In such a case, licensing authorities are allowed to give in-principle approvals before all the project details are finalised. Nuclear projects are large long-term investments and investors are unlikely to open up their purse strings without some regulatory certainty.
However, the framework also includes licensing hold points, such as before construction or before the fuel is loaded, where an applicant has to prove compliance before they are allowed to move ahead.
The new regulations have also created a single composite license, which covers building, owning, operating, and decommissioning the nuclear power plants. This could reduce fragmentation among the regulatory nods, while making projects easier to plan and faster to execute.
According to the SHANTI Act, the Atomic Energy Regulatory Board (AERB) will be the regulator in charge of framing regulations, issuing regulatory documents, taking enforcement action, and making recommendations to the government.
However, the rules have raised questions already. The parliamentary standing committee on science and technology, environment, forests, and climate change has questioned the entry of the private sector and suggested some other rules too. It said that private operators must have a minimum net worth, insurance, technical competence, and operational track record before they are allowed to get involved.