What is the SHANTI Act of 2025? India’s New Nuclear Energy Law Explained Here

The Government of India passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHATI) Act in December 2025, marking a watershed moment in India’s clean energy policy and a step toward its ‘Net Zero’ goal of climate change. For the first time the government of India allowed private sector participation in nuclear power generation and brought in the law for their regulation. The SHANTI Act dismantles the monopoly of the central government and state governments by positioning nuclear energy as a cornerstone of India’s energy security. With a target of 100 GW of nuclear capacity by 2047, this law provides the legal "fuel" needed to power India’s next industrial revolution.

Why was reform needed? 

India's nuclear energy sector is governed by the Atomic Energy Act, 1962, under the Department of Atomic Energy (DAE). The DAE exercised almost total control over nuclear energy and limited private participation, which resulted in slow capacity addition, a high capital burden on the government and limited technology diversification.

The reform in the nuclear sector was important because it is important for India's transition into clean energy and the government target of 100 GW of nuclear power capacity by 2047 and India's climate change commitment of a net zero target by 2070. Currently, India has 25 nuclear reactors with a total installed capacity of about 8.88 GW, while 17 reactors are under construction. Currently, India's installed capacity of nuclear capacity is under 8 GWe. Globally, the United States (US) has the highest nuclear capacity of 100 GWe, followed by France (65 GWe) and China (58 GWe). 

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What is the Shanti/Nuclear Energy Act 2025?

The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHATI) Act, 2025, is a comprehensive legislative reform brought to restructure India's nuclear governance. The Act makes a milestone shift from a state-exclusive model to a mixed public-private framework, which talks about consolidating existing nuclear laws into a single unified statute, enabling private participation under strict government supervision and replacing outdated regulatory provisions. 

Key Provisions of the SHANTI Act 2025: 

1. Ending the Central and State Government Monopoly in the Nuclear Sector:

• • The act allows private sector participationacross the value chain and includes nuclear power generation and allied activities under the government's supervision in strategic areas. 

  • The private payers could take an equity share of up to 49% in upcoming nuclear energy projects.

  • It allows foreign direct investment (FDI) of up to 49% in certain activities under the automatic route.       

2. New Statutory Status for the Atomic Energy Regulation Board (AERB): The AERB earlier operated under the Department of Atomic Energy (DAE), and power depended on the executive order of the central government, which often led to concerns about its independence. However, the new act established the AERB as a legally independent body which is directly accountable to the Parliament of India. 

• • Under the Shanti Act, AERB is established as an independent statutory body.

  • Its aim is to act as the safety watchdog for India's nuclear sector, ensuring the fair participation of private companies. 

  • AERB has the authority to grant and revoke licences, conduct unannounced inspections and shut down facilities for both public and private companies that do not comply with safety standards.

  • AERB is responsible for creating a safety benchmark for advanced technologies like Small Modular Reactors (SMRs) and managing the safe disposal of nuclear waste. 

  • Now AERB, directly accountable to the Parliament of India, will submit its report to the parliament. 

3. Overhaul of Nuclear Liability: The Shanti Act, 2025, addresses the issue of supplier liability which is faced by major international projects like Jaitapur and Kovvada. It facilitates:

• • Operator Focus: It will fix liability primarily on the operator.

  • Contractual Recourse: Suppliers are now only liable if explicitly mentioned in a contract or in cases of intentional harm.

  • Graded Caps: Now the liability is graded or capped based on the capacity (energy output) of the plant, which will reduce the financial uncertainty for investors.

4. Promoting Advanced Technologies: The act is aimed at the future technologies, specifically promoting Small Modular Reactors (SMRs) and Bharat Small Reactors (BSRs), which provides the 

• • Easier licensing for research and development in non-strategic nuclear applications like healthcare and agriculture. 

  • Decentralisation of power by promoting the SMRs and BSRs. 

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Why does private sector participation matter in the nuclear sector?

The private sector entry into the nuclear energy sector is important for India's transition to the clean energy transition and for reducing India's dependency on fossil fuels and its imports, meeting the India climate commitment of becoming a carbon-neutral country by 2070, and becoming a developed country by 2047. Here, the private sector's role in the nuclear energy sector becomes crucial for the following reasons:

• Resource Mobilisation: Nuclear energy projects are capital intensive and time-consuming, which requires a constant flow of funds. Private participation expands access to domestic and global capital, reducing fiscal dependency on the government.

• Technology Innovation: Private participation can bring cutting-edge technologies, reactor designs, new construction techniques and operational efficiencies, and help in industrial decarbonisation. 

• Energy Security: A wide range of nuclear ecosystems strengthens supply chains and manufacturing capacity and reduces dependence on fossil fuels, which will provide long-term low-carbon energy security. 

What are the challenges associated with the SHANTI Act 2025?

The SHANTI Act has much transformative potential but faces significant challenges such as 

• Safety and liability: The Civil Liability for Nuclear Damage Act, 2010, places substantial liability on operators and suppliers, which has deterred private and foreign investment to protect the security of critical sectors of India.  

• National Security Risks: The nuclear energy sector involves sensitive technology and material which requires strong safeguards, surveillance and traceability to ensure the security of the country. 

• Prolonged implementation cycles: Generally, nuclear energy projects have 8-10 year construction timelines in India, which makes them less attractive without risk sharing or viability-gap funding mechanisms. 

• Public Trust: As the nuclear sector is crucial for the countries to become self-sufficient in clean energy, it also requires transparent governance and robust safety mechanisms for building public trust. 

• Governance Implications: The shifts in India's governance approach from exclusive state control to market participation in strategic sectors raise challenges related to the regulatory framework and accountability of private players and coordination between the civilian and security agencies.  

The Shanti Act, 2025, is a landmark reform in India’s nuclear sector which marks a clear break from the traditional nuclear framework by inviting private sector participation in the nuclear energy sector.  It aims to accelerate India’s nuclear capacity, strengthen energy security and support India’s clean energy transition by combining private innovation with public oversight. It will significantly reduce India's fossil fuel dependency and help to achieve India’s goal of net zero for climate change by 2070. 

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