Atomic Energy Bill 2025

Context

Recently, the Government of India has approved the Atomic Energy Bill, 2025, which has now been renamed the ‘Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill’. It is also being referred to as the SHANTI Bill.

Key Points: Background

• This bill proposes to amend the Atomic Energy Act, 1962, bringing about radical changes to India's highly closed nuclear energy framework.
• This move aims to enable private and foreign participation in civilian nuclear energy for India's long-term energy security, climate commitments, and grid stability.
• It aims to promote the participation of both Indian and foreign private sectors in nuclear power generation. It will replace India's existing laws, the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act (CLND), 2010.

Key Provisions of the SHANTI Bill

• The bill proposes the creation of a nuclear energy regulatory framework that will be accountable to Parliament, ends the monopoly of the Nuclear Power Corporation of India on nuclear plant operations, and limits the circumstances under which nuclear power plant operators can seek compensation from equipment suppliers in the event of an accident.
• It also provides operators with protection by capping their liability for violations of laws under the Act, based on the size of the plant they operate, and limits the maximum penalty to ₹1 crore even in cases of ‘serious violations’.
• This bill proposes a revised and practical civil liability framework for nuclear damage, grants statutory status to the Atomic Energy Regulatory Board (AERB), and strengthens mechanisms related to safety, security, safeguards, quality assurance, and emergency preparedness.
• Under private and foreign participation, private companies are allowed to hold up to 49% stake in nuclear power projects.
• The scope of private participation is not limited to power generation but also includes:
• Exploration of nuclear minerals
• Fuel and equipment manufacturing
• Selection of certain aspects of plant operation
• Research and development (R&D) of Small Modular Reactors (SMRs).

Need for reforms in the nuclear sector

• Energy transition and baseload: The rapid expansion of renewable energy (such as solar and wind) has increased grid instability due to insufficient energy storage. Meanwhile, there are environmental and political constraints on coal and thermal power. Nuclear energy addresses these shortcomings by providing reliable baseload power and a low-carbon emission option.
• Capital requirements: India's nuclear expansion is now driven primarily by capital constraints rather than technological limitations. These reforms are expected to attract foreign sovereign wealth funds (especially from West Asia) and other private investors.
• Leveraging the India-US agreement: Almost two decades after the signing of this agreement, its commercial potential has not been fully utilized, which is now being addressed through these reforms.

India's nuclear capacity ambitions

• India's ambition is to achieve 100 gigawatts (GWe) of nuclear power capacity by 2047, compared to the current capacity of approximately 8 GWe. SMRs are being developed as a new pillar to achieve this target.
• Special emphasis is being placed on R&D in SMRs with an outlay of ₹20,000 crore. The goal is to have at least 5 indigenously developed SMRs (with a capacity of less than 300 MW) operational by 2033.

Private Sector Interest and Operational Model

• Companies Showing Interest: Large companies like Reliance Industries, Tata Power, Adani Power, Hindalco, JSW Energy, and Jindal Steel & Power have shown interest in SMR projects.
• The government-owned Nuclear Power Corporation of India Limited (NPCIL) will retain ownership and operational control of the SMRs.
• Private companies will manage the entire project lifecycle (including financing) and will receive a guaranteed long-term captive power supply in return.

Major Hurdle in Nuclear Liability Law

• The Civil Liability for Nuclear Damage Act, 2010 (CLNDA) remains the biggest obstacle to private and foreign investment.
• The CLNDA includes a ‘right of recourse’ which allows operators to seek compensation from suppliers (foreign vendors) in case of an accident. Foreign vendors (e.g., Westinghouse, EDF) consider this a deterrent to investment.
• Proposed solutions include limiting supplier liability beyond a certain threshold or establishing a state-backed insurance/fund to bring Indian law into conformity with global liability agreements.

The Way Forward

• Public Trust: Strengthening independent nuclear safety oversight is crucial to address political and public concerns regarding nuclear safety.
• Commercial Viability: Addressing private sector concerns (particularly commercial viability and risk sharing) is essential.
• Technology Transition: A gradual shift towards globally leading Light Water Reactor (LWR) technologies is necessary while preserving the indigenous Pressurized Heavy Water Reactor (PHWR) fleet.

Conclusion

The Nuclear Energy Bill 2025 marks a significant shift in India's energy policy, guiding the country towards a strategic, investment-friendly, and climate-conscious nuclear energy framework.