For decades, India’s nuclear law lived in silos, one statute for power, another for liability, and an unspoken assumption that the State alone could shoulder both risk and responsibility. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (SHANTI Act) breaks decisively from that inheritance.

The rollout of India’s new nuclear regime, followed by the “mother of all deals” , the India–EU Free Trade Agreement signed on 27 January 2026, and the Indo-US Trade Deal 2026 effectively reducing the tariffs to 18% redraws the contours of India’s trade, technology, and strategic ambition. These have strategic significance through shared incentives for a modern, predictable economic and regulatory environment, supports FDI and foreign participation goals that are often bolstered by trade agreements.

The enactment of SHANTI Act dismantles a six-decade-old legal edifice rooted in the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 (CLND Act), and instead erects a unified statute that promises regulatory clarity, investor confidence, and alignment with evolving global norms. It does not merely amend India’s nuclear framework, it reimagines it for an era characterized by climate crisis, energy geopolitics, and technological scale. The Atomic Energy Act governed development and use of atomic energy, while nuclear liability issues were addressed by the CLND Act. This binary framework was plagued by blind spots in regulatory oversight, licensing procedures, liability clarity, and participation models. Another most critiqued feature was that the past regime restricted most nuclear activities to government entities like the Nuclear Power Corporation of India Ltd (NPCIL) which allegedly limited capital mobilisation, operational innovation, and long-term expansion capacity.

The SHANTI Act repeals both statutes and replaces them with a consolidated framework that governs licensing, safety authorisation, regulation, liability, and dispute resolution under one umbrella. It establishes a comprehensive legal architecture that reduces ambiguity, accelerates decision-making, and enshrines safety and oversight as core pillars of nuclear governance.

Key Shifts

The SHANTI Act grants statutory recognition to the Atomic Energy Regulatory Board (AERB), which was previously empowered by executive orders and less insulated from administrative influence. This is aimed to strengthen its independence, enhance transparency, and align regulatory oversight with global practices. This is essential for both public trust and private investment.

A key feature in the calibrated regime has been opening of the nuclear value chain for private players. Private Indian companies and joint ventures can apply for licenses to build, own, operate, and decommission nuclear plants, fabricate fuel, and engage in related activities. This liberalisation eases the state monopoly while retaining sovereign control over strategic areas like enrichment and high-level waste management.

The statute has far-reaching commercial implications arising from its restructured liability regime. Moving from a flat cap on liability to a tiered system that scales with reactor size or risk profile clears ambiguities surrounding the extent of liability. It instills regulatory certainty for operators and insurers alike. It is imperative to note that the Act narrows the operator’s right of recourse against suppliers, aligning more closely with global norms such as those propounded by the international Convention on Supplementary Compensation for Nuclear Damage (CSC), which channels liability to operators and provides for a global pool of supplementary funds in case of severe incidents.

The Act creates specialised bodies, the Atomic Energy Redressal Advisory Council and links to appellate mechanisms like the Appellate Tribunal for Electricity to streamline disputes and compensate victims, reducing reliance on general civil litigation and bolstering procedural certainty.

India currently generates only a small fraction of its electricity from nuclear power (~3%), with installed capacity around 8-9 GW. Under the SHANTI Act, the government has set an ambitious target of scaling to 100 GW by 2047, a cornerstone of its Viksit Bharat and Net-Zero 2070 goals.

Nuclear energy offers reliable, low-carbon baseload power that complements intermittent renewables like wind and solar critical for a rapidly industrialising economy with surging demand for data centres, green hydrogen production, and advanced manufacturing. Global nuclear infrastructures have proven that diversifying generation portfolios with nuclear reduces grid volatility and emissions more effectively than renewables alone, especially when paired with advanced reactor technologies. SMRs, for instance, promise scalable deployment and lower capital barriers, and India’s legal reform signals openness to integrating these innovations into its energy mix.

However, reforms of this magnitude inevitably are bound to invite critique. Some argue that liability caps could under-compensate victims in the event of a major incident and that the narrowing of supplier liability removes a layer of accountability. Others question whether the regulatory apparatus can scale rapidly enough to oversee diverse private operators and complex technologies without robust capacity building. Stakeholders have also voiced concerns about environmental safeguards, nuclear waste management, and the transparency of licensing processes.

Additionally, foreign direct investment (FDI) caps and restrictions on foreign participation may limit access to global capital and cutting-edge technologies, even as India seeks deeper international collaboration. Nonetheless, it is imperative to acknowledge that the SHANTI Act 2025 is not merely a legislative rewrite, it is a strategic inflection point.

Why Consolidation Matters vis-a-vis Union Budget 2026 in Global POV

India’s nuclear ambitions are no longer an insular project; they intersect with global norms, treaty regimes, and evolving liability principles. International instruments like the Paris and Vienna Conventions on nuclear liability and the CSC provide benchmarks for liability channeling, insurance requirements, prompt compensation, and transnational cooperation in the event of incidents. The past decade has seen increased emphasis on nuclear safety standards promulgated by the International Atomic Energy Agency.

Thus, the inclusion of structured licensing and safety authorisations strengthens India’s credentials within the global nuclear safety regime essential for bilateral civil nuclear deals and participation in cross-border collaborations on advanced reactors and small modular reactors (SMRs).

In the recent context, broader India–EU strategic agendas, outside the 2026 FTA scope already include cooperation on peaceful uses of nuclear science and advanced materials via historic India–Euratom agreements and joint research frameworks. While there is no formal FTA chapter, these areas of cooperation may benefit from deeper economic ties and confidence generated by the trade deal. Liberalization of trade and investment may encourage EU firms to cooperate in technology, research programmes, and services, thereby boosting the overall Indian energy infrastructure.

The India – US trade deal 2026 too has a significant role to play in boosting the nuclear power sector. The deal recognizes the cost of alignment in shifting crude sourcing from Russia to US and leverages technology transfer for energy security without fiscal leakage. This shall accelerate the National Green Hydrogen Mission and expand nuclear energy, especially SMRs. This Indo – US pivot has to potential to do well in balancing the strategic autonomy with energy transition.

Furthermore, the Union Budget 2026 allocates fiscal resources and sets economic priorities that enable stronger implementation of the SHANTI Act’s modernised nuclear regime in funding regulatory bodies, safety oversight, and infrastructure incentives while also aligning macroeconomic strategy with commitments under the India–EU and the India – EU Security & Defense Dialogue of 2026.

A significant policy reform is extension and expansion of the basic customs duty exemption on imports for nuclear power projects until 2035 which aligns with the US – India COMPACT Initiative of 2025 to 2035. This applies to all nuclear plants regardless of capacity, aimed at lowering input costs. Additionally, budget allocations for nuclear power projects were increased to ₹2,500 crore for nuclear projects as part of the manufacturing sector allocations. These measures are intended to support expanded capacity, encourage private participation, and reduce cost barriers in nuclear energy development, reinforcing India’s long-term clean energy strategy.

Therefore, by consolidating nuclear law, modernising regulatory oversight, and opening pathways for private participation, India is laying the legal groundwork for a scalable nuclear energy ecosystem that can fuel growth, decarbonise its grid, and integrate with global nuclear governance norms. Its success, however, hinges on institutional capacity, robust safety mechanism, transparent enforcement, and sustained political commitment.

If implemented with rigor, the SHANTI Act could well become the cornerstone of India’s clean energy transition anchored in policy, driven by harmonious implementation, and aligned with both national aspirations and global responsibilities.

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