On 17 December 2025, Parliament took one of the most consequential steps in its energy policy in decades by clearing the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025— a sweeping overhaul of the nuclear legal framework that hopes to persuade the private sector to invest in a sector long reserved for state institutions. The bill is being touted by the government as a catalyst for cleaner, more secure and more competitive energy infrastructure.
From the outset, India had kept its nuclear sector under the tight control of the state, viewing it as a strategic asset. Indeed, so important was the Department of Atomic Energy (DAE) that the portfolio has been under the Prime Minister himself from the outset.
Legislation like the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010 have ensured severe restrictions on private and foreign involvement, ostensibly to preserve national security and safeguard sensitive technologies.
SHANTI seeks to radically rewrite this narrative — it repeals those older statutes and legally opens the door to Indian private companies to build, operate and manage nuclear facilities. Needless to say, core nuclear technology areas remain under the state control and supervision.
Why Nuclear Power Stayed a State Preserve for Decades
The Atomic Energy Commission, the highest policy making body, is headed by a Chairman who is also the Secretary of the Department of Atomic Energy (DAE). Given its nature, the Atomic Energy Regulatory Board (AERB) is assigned a high status as an independent watch-dog.
The DAE is the umbrella organisation that divides supervision of work over three key sectors—the R&D sector with institutions like the Bhabha Atomic Research Centre (BARC) in Trombay, the Indira Gandhi Centre for Atomic Research in Kalpakkam and the Raja Ramanna Centre for Advanced Technology in Indore. The second are the Public Sector Undertakings (PSUs) that run the country’s nuclear power plants and run institutions that focus on the commercial uses of atomic energy
The reasons for the bill are the fact that India’s atomic energy sector has failed to deliver on the promise that it had to the nation. The government had gone out of its way to invest in the nuclear power sector but India’s nuclear test of 1974 resulted in a crushing embargo on the country’s nuclear sector.
As a result, plans to expand the sector with Canadian help ground to a halt. At one time India had hoped to generate 45,000 MW by 2000, then it revised the target down to 10,000 MW. But even this target proved elusive and India reached only 2720 MW by the new millennium.
The Indo-US Nuclear Deal That Never Delivered
The Indo-US nuclear deal of 2008 was to be the magic bullet that would turn things around. Through this, the US would help remove the embargoes it had placed on the Indian nuclear programme and also get India an exemption from the restrictions placed by the Nuclear Suppliers Group. The expectations were that India would thereafter enter a new era where foreign investors would come in the nuclear sector and it would grow exponentially.
But this was not to be. The Civil Liability for Nuclear Damage Act of 2010 undermined India’s own goals. So onerous were the clauses relating to unclear supplier liabilities and inadequate compensation mechanisms, that foreign suppliers were reluctant to come to the country.
As a result, India has not met its revised 2000 target even by 2025.
Its installed nuclear capacity is around 8,800 MW (8GW) only from 25 or so operating reactors that generate only 3-3.1 per cent of the country’s electricity. New Delhi has set ambitious goals like 22,800 MW by 2031-31 or 100 GW by 2047. But none of would be attainable minus this legislation.
For this reason, the government argues that this is not this is not only prudent policymaking but a strategic imperative. To realistically meet these goals, private capital, innovation and technology transfer will inevitably have to play a major role — simply relying on public sector undertakings and bloated state projects will not suffice.
What SHANTI Changes
Under SHANTI, the Atomic Energy Regulatory Board (AERB) — formerly a body without legislative authority — gains statutory status and broader powers to oversee nuclear safety, inspections and enforcement. The bill also introduces a tiered liability framework for nuclear incidents, replacing the older flat caps with a range tied to reactor capacity, and subtly recalibrate responsibility so that operators, not equipment suppliers, bear most risk.
SHANTI has drawn considerable critique. Opponents argue the shift toward private sector involvement puts corporate profit motives ahead of public safety.
Congress MP Shashi Tharoor, for example, has warned that “When profit becomes the primary motive across the entire chain, safety checks could be compromised,” especially if a single corporate group controls multiple stages of the fuel cycle — from mining and fabrication to waste management.
Other critics have raised broader economic and geopolitical questions: Is India’s finite uranium stock sufficient to justify this expansion? Will private players deliver high enough safety and risk management standards? And how will foreign technology and investment be balanced against sovereign control of sensitive parts of the nuclear fuel cycle?
India’s High-Stakes Bet
The reality is that no other energy source offers the combination of round-the-clock power and minimal carbon emissions and long-term strategic value that nuclear energy does. Without legislative and regulatory modernisation, India will be left behind in a global energy transition where many nations are vigorously pursuing nuclear — especially smaller, safer small modular reactors (SMRs) and next-generation technologies.
Around the world, there are signs that the nuclear industry is seeing a revival, driven as much by climate goals and energy security arising out of demands of AI power needs, as new technologies in the area of nuclear power such as small modular reactors (SMRs).
SHANTI involves the opening up of one of the most sensitive and technically demanding industrial sectors to new players, new capital and new competition. But it also means dealing with issues of risk and accountability in a sector that can be potentially hazardous.
After the recent IndiGo experience, there are legitimate questions about the nature of India’s regulatory regimes. Whether this ambitious legislative shift will deliver on its promise or become a cautionary tale of premature deregulation will depend on implementation, transparency, and unwavering regulatory attention.
(The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi. This is an opinion piece, and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)