DECAYING INTENT: After 70 years, India has just 8,780 MW of nuclear capacity, with 2,000 MW built by Russia | Photo Credit: Prashanth Vishwanathan

With the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, now passed by both houses of Parliament, the key question is whether the new law will achieve its stated objective — drawing private investment into India’s nuclear power sector.

Private capital is certainly needed. India’s sole nuclear power operator, the government-owned Nuclear Power Corporation of India (NPCIL), has not delivered. After seven decades, the country has just 8,780 MW of nuclear capacity, of which about 2,000 MW was built by Russia.

Several important projects — PFBR (prototype fast-breeder reactor), IHTR (Indian high-temperature reactor) and ADSS (accelerator-driven sub-critical system) — have been stuck for decades, with little public explanation from NPCIL or the Atomic Energy Commission. India has not even entered the second stage of its three-stage nuclear programme, despite possessing abundant thorium resources.

Moreover, the government’s ambitious target of 100 GW of nuclear capacity by 2047 cannot be achieved by NPCIL or other public-sector entities alone. Meeting this goal would require investments of about ₹15 lakh crore, making private participation indispensable.

The targets themselves have been a moving goalpost. Under the United Progressive Alliance (UPA) government, the targets were 35 GW by 2022 and 60 GW by 2030. After the National Democratic Alliance (NDA) came to power in 2014, the target was revised to 63 GW by 2032, and later quietly reduced to 22.48 GW. Alongside, a fresh goal of 100 GW by 2047 was announced.

For now, 100 GW is the stated objective — and that is where the SHANTI Act comes in. The new law replaces both the Atomic Energy Act, 1962, and the Civil Liability for Nuclear Damage (CLND) Act, 2010.

The government appears to believe that scrapping the CLND Act removes the principal deterrent to private investment: liability concerns. But the CLND Act was never as investor-hostile as it was made out to be.

Right of recourse

Section 17(a) merely allowed an operator to include a ‘right of recourse’ clause in its contract with the equipment supplier. Section 17(b) said that if such a clause existed, and if a nuclear incident could be proven to have resulted from an act of the supplier or its employees, the operator could seek reimbursement of any damages paid to victims. Importantly, Section 6 capped the total liability at 300 million Special Drawing Rights (SDRs).

The SHANTI Act retains the 300 million SDR cap on operator liability but removes all reference to the operator’s right of recourse against suppliers. In effect, the operator keeps the profits while enjoying capped liability, with residual risks falling on the taxpayer. At a time when the world is moving towards small modular reactors (SMRs) with passive safety features such as automatic shutdown, limiting operator liability risks encouraging cost-cutting and underinvestment in safety redundancies.

From the operator’s standpoint, one thorn has been removed. But will this trigger a surge in private investment, as the government hopes?

Fuelling worry

There remains a major deterrent. The SHANTI Act gives the government complete control over the nuclear fuel cycle. This means that a private company that invests thousands of crores in a nuclear plant will remain entirely dependent on a government entity — effectively NPCIL — for its fuel supply. Few investors would relish the prospect of having to queue up at NPCIL’s door to keep their plant running.

This provision also hinders easy access to emerging fuel technologies such as ANEEL and HALEU. Notably, ANEEL fuel — developed by Clean Core Thorium, an Indian-owned US company — has the potential to fast-track India’s long-delayed transition to the thorium cycle. For these reasons, it is difficult to see the SHANTI Act opening the sluice gates to a flood of private investment.

A better approach would have been to place the responsibility for safety — and liability — squarely on the plant operator, while liberalising fuel sourcing and handling under strict regulatory oversight. The government’s non-proliferation concerns are valid, but these can be addressed through robust supervision rather than blanket control.

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Published on December 22, 2025