‘India has a strong nuclear foundation… countries need energy that are not exposed to fuel-price shocks or geopolitical disruption’

The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 has opened India's nuclear energy sector to private pa...

What Happened

The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 has opened India's nuclear energy sector to private participation for the first time since the Atomic Energy Act, 1962 restricted it to public sector entities.
The SHANTI Bill was passed by Lok Sabha on December 17, 2025, by Rajya Sabha on December 18, and received Presidential assent on December 20, 2025.
The US has welcomed the SHANTI Act as a significant step toward strengthening the India-US energy security partnership, with the US Embassy stating readiness for "joint innovation and R&D in the energy sector."
The Act revamps the nuclear liability framework by establishing a graded system replacing the single liability cap under the Civil Liability for Nuclear Damage Act (CLND), 2010 — a long-standing barrier to foreign supplier participation.
The SHANTI Act grants statutory status to the Atomic Energy Regulatory Board (AERB), strengthening independent oversight of India's nuclear operations.

Static Topic Bridges

India's Nuclear Energy Governance Framework

India's nuclear energy sector has historically been governed by the Atomic Energy Act, 1962, which vested all rights to produce, develop, use, and dispose of atomic energy exclusively in the Central Government. This statutory monopoly meant that private companies — domestic or foreign — could not own or operate nuclear power plants. The Department of Atomic Energy (DAE) and its subsidiary Nuclear Power Corporation of India Limited (NPCIL) have been the sole entities operating nuclear plants in India.

India has an installed nuclear capacity of approximately 7,480 MW across 24 operating reactors (as of 2025), contributing about 3% of total electricity generation — far below the government's target of 100 GW by 2047.
India's Three-Stage Nuclear Programme (designed by Dr. Homi Bhabha) aims to ultimately use thorium — of which India holds the world's largest reserves — as fuel through a cycle progressing from natural uranium reactors to fast breeder reactors to thorium-based reactors.
The SHANTI Act allows private companies to participate in plant operation, power generation, equipment manufacturing, and limited fuel fabrication activities, while retaining government control over sensitive activities.

Connection to this news: The SHANTI Act represents the most significant restructuring of India's nuclear legal framework in over six decades, directly enabling the private sector and foreign collaborators — including US firms — to participate in India's nuclear energy expansion.

India-US Civil Nuclear Agreement and the 123 Agreement

The India-US civil nuclear cooperation agreement — popularly called the "123 Agreement" (named after Section 123 of the US Atomic Energy Act of 1954) — was signed in October 2008, following the landmark India-US Civil Nuclear Deal of 2005 and the historic Nuclear Suppliers Group (NSG) waiver granted to India in September 2008. The NSG waiver allowed India to engage in civilian nuclear commerce despite not being a signatory to the Nuclear Non-Proliferation Treaty (NPT).

The Civil Liability for Nuclear Damage Act (CLND), 2010 had Section 17(b), which allowed operators to sue suppliers — a provision that deterred US and French nuclear companies from signing contracts with India, as it exposed them to potentially unlimited liability.
The SHANTI Act removes supplier liability and introduces a graded liability structure ranging from ₹100 crore (for small research reactors) to ₹3,000 crore (for large power reactors), resolving the decade-long stalemate with foreign nuclear suppliers.
India signed the Convention on Supplementary Compensation for Nuclear Damage (CSC) in 2010, aligning its liability framework with international norms.

Connection to this news: By removing supplier liability, the SHANTI Act directly unblocks the commercial implementation of the 2008 India-US 123 Agreement, potentially enabling US reactor manufacturers such as Westinghouse and GE-Hitachi to finalize long-pending power plant contracts in India.

Nuclear Energy and India's Energy Security

Energy security refers to a nation's ability to secure continuous, reliable, and affordable access to energy. For India — the world's third-largest energy consumer — energy security is complicated by a heavy dependence on imported fossil fuels (approximately 87% of crude oil is imported) and vulnerability to geopolitical disruptions. Nuclear energy is increasingly viewed as a strategic hedge because it is domestic in operation (once fuel is loaded), low-carbon, and insulated from international fuel-price volatility.

Nuclear power offers high capacity factors (typically 85–92%) compared to variable renewable sources like solar or wind.
India's stated goal under the National Electricity Plan and updated climate targets includes scaling nuclear capacity significantly as part of achieving 500 GW of non-fossil electricity by 2030.
The US Secretary of State, ahead of his May 2026 India visit, explicitly cited the importance of "energy that is not exposed to fuel-price shocks or geopolitical disruption" as a rationale for deepening India-US nuclear cooperation.

Connection to this news: The US framing of nuclear cooperation as energy security — not just commercial opportunity — elevates the SHANTI Act's strategic significance within the broader India-US partnership, linking it directly to Quad energy initiatives and long-term Indo-Pacific stability goals.

Key Facts & Data

SHANTI = Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025.
Presidential assent: December 20, 2025.
AERB (Atomic Energy Regulatory Board) now has statutory status under the SHANTI Act; previously it operated under an executive notification.
Graded liability structure under SHANTI Act: ₹100 crore (small research reactors/transport) to ₹3,000 crore (large power reactors).
India's 2008 NSG waiver was the first time the group granted a country-specific exemption without NPT membership.
India has 24 operating nuclear reactors with approximately 7,480 MW installed capacity (as of 2025).
India's Three-Stage Nuclear Programme targets eventual use of thorium — India holds ~25% of global thorium reserves.
US-India energy trade target announced in 2025: increase annual US energy sales to India from $15 billion to $25 billion.
The 123 Agreement (2008) and NSG waiver enabled India to engage in civilian nuclear commerce internationally for the first time.