SHANTI (The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India)-Act 2025 is a new legislative framework introduced by India to accelerate power generation through clean nuclear energy, while allowing private companies to acquire licenses to build and operate power plants. Earlier, only Nuclear Power Cooperation of India Limited (NCPIL) operated nuclear power plants for civil purposes. At present, it operates 24 power plants, contributing 8.8 GW of clean energy, which is 3% of the total energy mix. NCPIL operates under the Department of Atomic Energy.
Opening the access of private companies to the building of nuclear power plants is an ambitious yet risky move, if the new act fails to establish clear guidelines and provisions for enforcing the liabilities in case of nuclear incidents. Liability law is a very significant concept in the debates of international nuclear law. Access to nuclear energy for power generation is a fundamental right of developing countries, although if mismanaged, it can have disastrous consequences for the masses.
The concepts of liability and right of recourse in the nuclear law are extensively described in the Vienna Convention, Paris Convention, and the Convention on the Supplementary Compensation (CSC). Article 2 of the Vienna Convention on Civil Liability for Nuclear Damage explicitly holds operators liable for nuclear damages caused by a nuclear incident within the installations or for the material from that installation. Unless the other operator has taken control of the nuclear material in transit, the sending operator will be held responsible for any damages. The operator will not be liable for any nuclear damage caused intentionally by another person or a party. Article 10 of the Vienna Convention sets out the conditions under which an operator may seek recourse against the supplier or contractors. The right of recourse will be established if a contract exists between the operator and the supplier, having explicit provisions entailing a mechanism of recourse. Secondly, if an intentional action by the supplier or contractor causes nuclear damage, the operator can seek recourse. Otherwise, in all the conditions, liability will only be channeled through the operator.
Similarly, the Paris Convention on Third Party Liability in the Field of Nuclear Energy discusses at length various scenarios in which liability in case of nuclear damage will only be channeled through the operator. Article 6 of this convention states that a competent court may relieve the operator from liability if it proves that nuclear damage is caused by a person or an entity deliberately. In other cases, liability may be shifted to a supplier if there exists an explicit contract, or a supplier requests to be liable while seeking consent from the operator, although it will be decided by a competent public authority. The Convention on Supplementary Compensation (CSC) strictly protects the suppliers from paying any kind of compensation to the victims.
Under the Indian Atomic Energy Act 1962, there are no explicit provisions dealing with liability law. However, it covers a few scenarios in which the government will ensure compensation for the loss or deprivation of property or rights caused by the government when it is exercising its authority under the act. India formally enacted the Civil Liability for Nuclear Damages Act (CLNDA) in 2010. Unlike the Vienna Convention, the CLINDA had some provisions that shifted the onus of liability to the supplier if he supplied defective material or offered poor services. Additionally, the liability caps for each installation under the Vienna Convention are much higher than those under the Indian Act. The former entails a liability cap of 300 million Special Drawing Rights (SDR) per installation, while the CLINDA offered SDR 167 million for the same category. SDR is created by the International Monetary Fund (IMF) as a reliable unit for international transactions.
Sanaa Alvira opined that after the US-Indo nuclear deal and the enactment of CLINDA in 2010, US companies such as GE and Westinghouse did not establish the nuclear infrastructure as agreed in the deal due to liability concerns. To address liability concerns, the Government of India established an insurance pool of INR 1,500 crore, but it was far short of the amount needed to win investors’ trust. Speaking at the Carnegie Global Technology Summit 2025, Indian Minister of External Affairs S Jaishankar admitted that the existing Indian liability law failed to attract investors.
SHANTI Act 2025 was enacted to overcome these problems and gain the confidence of investors. This act has fixed many loopholes that existed in the previous laws, including safeguarding suppliers from liability, raising the cost of liability caps as per international standards, and giving the Atomic Energy Regulatory Board (AERB) a statutory status. Earlier, AERB operated through a government notification. Fundamental change sponsored by the SHANTI was the provision that private companies can operate and decommission nuclear power plants while seeking a license from the AERB.
While a few have raised the apprehensions that insulating suppliers completely will reduce the stakes for suppliers in case of nuclear incidents, thus less focus will be placed on the quality and safety. Additionally, AERB is still under the administrative and financial control of the Department of Atomic Energy (DAE); a statutory backing alone is not sufficient to ensure effective and impartial regulation over the new private companies aspiring to operate nuclear power plants.
Indian nuclear installations can be grouped into three categories: safeguarded and unsafeguarded civilian and military nuclear facilities. India has eight unsafeguarded civilian heavy water pressurized reactors, capable of producing weapon-grade fissile material. Due to the existence of pathways for diverting nuclear materials from peaceful uses to weapons acquisition, allowing private companies to build and operate nuclear power plants will raise proliferation concerns. The US-India nuclear deal, the grant of NSG waiver for nuclear commerce, and now allowing Indian private companies to operate nuclear power plants without the clear separation of civilian and military nuclear installations, will do nothing but disincentivize other countries from adhering to the norms of nuclear non-proliferation.
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