SHANTI Act signals shift in nuclear policy, balances reform and state control, say experts

India has taken a decisive step towards strengthening long-term energy security with the enactment of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025, or the SHANTI Act. The government is expected to roll out the new institutional framework and detailed rules governing nuclear energy within the next three months, signalling a shift in India’s civil nuclear policy.

According to Megha Arora, Partner at CMS IndusLaw, and Abhishek Rohatgi, Associate at CMS IndusLaw, the SHANTI Act is a cornerstone of India’s strategy to achieve energy independence and meet its net-zero emissions target by 2070. The law also underpins the ambition to scale nuclear power capacity to 100 GW by 2047. In a significant overhaul, the Act replaces both the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, creating a consolidated and modern legal framework.

National Nuclear Mission and SHANTI Act

According to the experts, one of the most notable reforms under the SHANTI Act is the calibrated opening of the nuclear sector to private participation. This move aligns with the broader National Nuclear Mission announced in the Union Budget 2025–26, which emphasises the deployment of Bharat Small Reactors and Bharat Small Modular Reactors, while envisaging a meaningful role for private players in nuclear power generation.

The Act introduces a comprehensive licensing regime covering the construction, ownership, operation and decommissioning of nuclear power plants; fabrication and processing of nuclear fuel, including uranium enrichment up to notified thresholds; and the transport, storage, import or export of nuclear fuel, spent fuel and related substances. It also regulates the import and export of prescribed equipment, technology and software used in nuclear activities, with powers vested in the Central Government to notify additional licensable activities. Importantly, a wide range of entities—including private companies, joint ventures and other approved persons—are now eligible to apply for licences, marking a sharp departure from the earlier regime that largely excluded private participation.

Despite this liberalisation, the Act retains centralised control over strategically sensitive areas. Arora said activities such as enrichment or isotopic separation of nuclear substances, management and reprocessing of spent fuel, handling of high-level radioactive waste, and uranium or thorium mining remain reserved for the Central Government or government-controlled entities. 

Nuclear liability framework

The SHANTI Act also revises India’s nuclear liability framework. While broadly aligned with the earlier liability law, it removes strict no-fault liability on operators and eliminates the operator’s right of recourse against suppliers for defects or sub-standard services. Rohtagi said these provisions had long deterred international suppliers, who viewed them as inconsistent with global norms under the Convention on Supplementary Compensation for Nuclear Damage. Their removal is expected to boost both domestic and foreign participation.

Another significant shift is the promotion of indigenous research and development. Unlike the earlier blanket prohibition on patents, the new law allows patent protection for inventions related to the peaceful use of nuclear energy, subject to national security exclusions. This change is expected to spur private innovation and strengthen India’s nuclear technology ecosystem.

Overall, the SHANTI Act represents a structural reset of India’s civil nuclear framework. Its ultimate impact, however, will depend on the rules notified under the Act and complementary policy reforms, including a relook at foreign investment restrictions in the atomic energy sector.