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When Shanti means nuclear energy

February 03, 2026 5 min read Science & Technology International Relations GS3 (Science & Technology Energy Security) GS2 (International Relations)
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What Happened

  • The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act received Presidential assent in December 2025 after passing both houses of Parliament, replacing the Atomic Energy Act 1962 and the Civil Liability for Nuclear Damage Act (CLNDA) 2010.
  • The Act ends six decades of state monopoly in nuclear power generation, allowing private sector participation and foreign investment for the first time, with a target of 100 GW nuclear capacity by 2047.
  • SHANTI is directly enabled by the 2025 operationalisation of the India-US Civil Nuclear (123) Agreement — specifically the completion of terms around reprocessing rights, fuel supply assurances, and strategic fuel reserves.
  • At the Modi-Trump summit (February 2025), both leaders launched the India-US COMPACT initiative, reaffirming commitment to joint nuclear projects, technology transfer, and deployment of advanced Small Modular Reactors (SMRs) on Indian soil.
  • The Act revises the nuclear liability framework, introducing graded caps ranging from approximately ₹100 crore to ₹3,000 crore (about $12 million to $360 million) aligned with international conventions, and effectively removes supplier liability — a key barrier that had blocked US and Western reactor vendors since 2010.

Static Topic Bridges

India-US Civil Nuclear (123) Agreement: History and Significance

The 2008 India-US Civil Nuclear Agreement — commonly called the 123 Agreement (referencing Section 123 of the US Atomic Energy Act, 1954, which governs nuclear cooperation with other countries) — was a landmark geopolitical breakthrough. It granted India access to civilian nuclear technology and fuel despite India not being a signatory to the Nuclear Non-Proliferation Treaty (NPT).

  • The agreement was preceded by the Hyde Act (Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act, 2006), which created the US legislative framework to exempt India from standard NPT-compliance requirements for nuclear trade.
  • India, as a declared nuclear weapons state outside the NPT, needed an NSG (Nuclear Suppliers Group) waiver to trade in civilian nuclear materials — granted in September 2008 after intense diplomacy.
  • Under the 123 Agreement, India agreed to: separate civilian and military nuclear facilities; place civilian facilities under IAEA safeguards; maintain a moratorium on nuclear testing.
  • The agreement finalised terms on: reprocessing rights (India's right to reprocess spent fuel from US-origin nuclear material), fuel supply assurances, strategic fuel reserve provisions, and procedures for termination.

Connection to this news: SHANTI's operationalisation directly fulfils the promise of the 2008 agreement — by clearing the domestic legal barriers (monopoly, supplier liability) that prevented US reactor manufacturers like Westinghouse from building plants in India despite the international framework being in place.

Civil Liability for Nuclear Damage Act (CLNDA) 2010: The Supplier Liability Problem

The CLNDA 2010 was enacted as a precondition for India's entry into international nuclear commerce post-NSG waiver. However, its Section 17(b) — which gave nuclear plant operators the right of recourse against equipment suppliers in cases of defective equipment or negligence — became a major obstacle to foreign reactor sales.

  • Section 17(b) diverged sharply from the international liability convention framework (Paris Convention, Vienna Convention), which channels all liability to the plant operator and grants suppliers immunity.
  • US and French reactor vendors (Westinghouse, GE-Hitachi, Areva/EDF) refused to sign contracts for Indian reactors because Section 17(b) exposed them to potentially unlimited and long-duration liability claims.
  • Russia (Rosatom) and France had agreed to specific liability carve-outs via bilateral agreements; US firms could not do so under American law.
  • The SHANTI Act resolves this by: (a) removing Section 17(b)'s equivalent; (b) establishing graded capped liability aligned with international conventions; (c) channelling all operator liability to a single-operator model.

Connection to this news: The removal of supplier liability is the single most commercially significant reform in SHANTI — it unlocks the market for US SMRs and conventional reactors in India, estimated as a potential $214 billion market over the coming decades.

India's Nuclear Energy Targets and the NPT Non-Signatory Status

India's pursuit of civilian nuclear power operates under a unique geopolitical framework: it is one of only four countries (alongside Pakistan, Israel, South Sudan) that have never signed the NPT, yet it has been granted de facto recognition as a nuclear weapons state through the NSG waiver and bilateral 123 agreements.

  • India's current nuclear capacity: approximately 7.5 GW across 22 operating reactors (as of 2025); target is 100 GW by 2047 (India's centenary of independence).
  • India's nuclear programme has historically relied on the three-stage cycle: PHWRs (heavy water reactors using natural uranium) → Fast Breeder Reactors (using plutonium) → Thorium-based reactors; India has substantial thorium reserves (world's largest at approximately 25% of global reserves).
  • Under SHANTI, private firms may build and operate nuclear plants through joint ventures, subject to regulatory oversight by the new Nuclear Regulatory Authority of India (replacing the Atomic Energy Regulatory Board).
  • Small Modular Reactors (SMRs) — factory-built, scalable reactors of under 300 MWe — are a priority technology for the COMPACT initiative; they can be deployed faster and at lower upfront capital than large conventional reactors.

Connection to this news: India's 100 GW nuclear target by 2047, combined with private sector entry and foreign technology through the SHANTI Act, represents the most significant structural shift in India's energy security architecture since the 123 Agreement itself.

Key Facts & Data

  • SHANTI Act: Received Presidential assent December 2025; replaces Atomic Energy Act 1962 + CLNDA 2010.
  • Nuclear capacity target: 100 GW by 2047 (India's centenary); current installed capacity: ~7.5 GW (22 reactors).
  • 123 Agreement (US-India): Signed October 10, 2008; operationalised terms finalised February 2025 (reprocessing rights, fuel supply assurances).
  • Hyde Act (2006): US legislation enabling nuclear trade with India without NPT membership.
  • NSG waiver: Granted September 2008 — allows India to trade civilian nuclear materials despite being NPT non-signatory.
  • Liability caps under SHANTI: ₹100 crore (~$12 million) to ₹3,000 crore (~$360 million), depending on plant size.
  • India's thorium reserves: World's largest (~25% of global reserves) — central to India's long-term three-stage nuclear programme.
  • COMPACT initiative: Modi-Trump February 2025 summit; covers joint nuclear projects, SMR deployment, technology transfer.
  • India-US nuclear market potential estimated at $214 billion.
  • SMR definition: Reactors under 300 MWe; factory-built, modular, faster deployment than large reactors.