SHANTI Act 2025: Rewiring India’s Nuclear Liability and Regulatory Architecture

SHANTI Act

The Sustainable Harnessing and Advancement of Nuclear Energy Act, 2025 (the SHANTI Act) came into effect in India on 21 December 2025.

The SHANTI Act is the most sweeping reform of India’s nuclear regime to date, repealing the previously existing Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 (CLND Act).

With these regulatory developments, India aims to achieve 100GW of nuclear capacity by 2047 (from about the current c.8.8GW capacity it currently has) through private sector participation, which would ensure energy security and clean baseload power.

Development of nuclear power plants

The SHANTI Act enables departments of the central government in India, government companies and privately owned companies and joint ventures between government and privately owned companies (but not companies incorporated outside of India) to apply to the central government for a licence to build, own, operate (or decommission) a nuclear power plant or reactor and to fabricate and use nuclear fuel (including conversion, refining and enrichment of uranium-235 up to such threshold value as the central government may notify).

The licensees can also engage in procuring the supply and export of nuclear fuel, as well as equipment relevant to the nuclear power plant or reactor which the central government specifies plus the import and export of relevant technology or software. The central government can add to this list of items from time to time.

The SHANTI Act gives the central government the ability to modify, suspend, cancel or curtail a licence in case of a deterioration of the financial position of the licensee or on grounds of national security, material risk or public safety or where the licensee is in breach of the terms of its licence or of other conditions it is required to comply with. In the case of cancellation, the central government is entitled to take control of the nuclear facility or mine.

Besides the licence from the central government, nuclear facilities or activities would also require a safety authorisation from the Atomic Energy Regulatory Board (see below) if there is a risk that they may result in radiation exposure.

The SHANTI Act clarifies that the enrichment or isotopic separation of radioactive substances and the management of spent fuel and the production of heavy water and its upgradation by isotopic separation would be exclusively within the control of the central government. In addition, exploration activities for discovery of uranium or thorium remain within the control of the central government or be subject to terms and conditions that the central government may impose.

Atomic Energy Regulatory Board

The SHANTI Act confers statutory status on the Atomic Energy Regulatory Board and empowers it to make regulations to implement the SHANTI Act.

Among other critical items, the Atomic Energy Regulatory Board can make regulations in relation to safety authorisations referred to above and radiological emergencies, as well as regulations in relation to the grant of safety authorisations during various stages of the lifetime of nuclear and radiation facilities and associated activities.

Operator liability framework

As was the case under the CLND Act, a strict, no-fault liability principle applies on the operators of nuclear power projects. However, whereas under the CLND Act the operators’ liability was capped at INR 1,500 crores for reactors having a capacity greater than 10MW, the SHANTI Act sets out a sliding scale structure as follows:

* 1 crore = 10 million

SHANTI Act imposes an obligation on the operators to take out an insurance policy or other financial security covering the above liability before commencing operations at the nuclear installation, and to keep renewing such insurance policy or financial security instrument (note that nuclear installations owned by the central government in India are exempted from this obligation).

The central government remains liable for compensation beyond the abovementioned caps. India became a contracting party to the Convention on Supplementary Compensation for Nuclear Damage (CSC) in 2016, which would give it access to the compensation pool funded by all CSC members if a nuclear incident occurs in India.

Supplier liability framework

The change in the regulatory approach to supplier liability for nuclear damage is perhaps the most significant effect of the SHANTI Act.

Under the CLND Act, while the operator liability was capped as discussed above, after paying out its liability the operator had recourse against suppliers if such recourse was contractually agreed between the operator, or if the nuclear incident had resulted as a consequence of an act of the supplier (including supplies of equipment or material with patent or latent defects or sub-standard services) or where the nuclear incident resulted from something that was done with the intent to cause nuclear damage. The position under the CLND Act exposed suppliers to open ended liability and was a key factor in foreign reactor companies being reluctant to enter India’s nuclear market.

Under the SHANTI Act, the recourse to suppliers is limited to being a contractual right (there is no statutory right of recourse) unless the nuclear incident resulted from something that was done with the intent to cause nuclear damage. This position is aligned with global nuclear liability conventions and is expected to encourage private and foreign suppliers to enter the Indian nuclear market.

Nuclear damage

The operator’s liability arises in respect of “nuclear damage”, which is broadly defined to mean any injury, loss or damage caused by a nuclear incident which occurs in a nuclear installation or which involves “nuclear material” if it results in loss of life or personal injury or loss (including immediate and long-term health impacts to individuals) or damage to property.

“Nuclear material” would include nuclear fuel (other than natural uranium or depleted uranium) and radioactive materials produced as a byproduct of the utilisation of nuclear fuel. The nuclear material may have originated in the nuclear installation or may have been transported to a nuclear installation.

The central government can include other categories of losses that can trigger what constitutes “nuclear damage”.

A “nuclear installation” is the facility where nuclear fission occurs in a reactor but can also be a facility where nuclear fuel is used for the production or processing of nuclear material or where nuclear material is stored (other than where such storage is incidental to carriage of the nuclear material). Several “nuclear installations” of one operator which are located at the same site would be considered as a single nuclear installation.

Nuclear Damage Claims Commission

The SHANTI Act establishes a Nuclear Damage Claims Commission, to which an application for compensation can be made by persons who have suffered injury or property damage (or their legal representatives and agents). The Nuclear Damage Claims Commission is designed to be non-adversarial and accessible, with the ability to engage specialists to consider technical questions relating to radiation exposure, environmental contamination, technical causation etc. In assessing compensation claims, the Nuclear Damage Claims Commission is not bound by the rules of civil procedure but would be guided by the principles of natural justice and can regulate their own procedure.

Norton Rose Fulbright is not licensed to practice Indian law and does not provide advice on Indian law matters. Any comments or analysis provided herein are for general informational purposes only and should not be construed as legal advice under Indian law. For formal advice on Indian legal issues, please consult a qualified Indian law firm or practitioner.