The Lok Sabha on Wednesday passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (Shanti) Bill, 2025, to open up nuclear power generation to private players.
The bill proposes to permit any company or joint venture to construct, own, operate, or decommission a nuclear power plant or reactor within the country. Currently, only government-owned companies are permitted to do so.
In a major move, the bill also proposes to exclude suppliers of components and fuel from liability in the event of damages caused.
The legislation comes in the backdrop of the government's target to boost investments in the nuclear power sector, helping the country achieve its ambitious goal of 100 gigawatts (GW) of nuclear power capacity by 2047.
Although not renewable, nuclear is a non-fossil source of energy and therefore cleaner than oil, gas or coal, making it a key energy source for the global energy transition goals. India's current nuclear power capacity stands at 8.7GW.
“India's role in geopolitics is increasing. If we have to be a global player, we have to follow global benchmarks and global strategies. The world is moving towards clean energy. We too have set a target of 100GW of nuclear energy capacity by 2047,” Jitendra Singh, Union minister for state (independent charge), said, describing the bill as a milestone legislation.
Several private companies, including the Adani Group, Larsen & Toubro (L&T), and Tata Power Ltd, as well as public sector energy companies, such as IndianOil Corp. Ltd and ONGC Ltd, have announced plans to enter the space.
India's largest power generator, NTPC Ltd, has already entered the space, initially through a joint venture with Nuclear Power Corporation of India Ltd and followed by setting up a subsidiary focused on nuclear power.
What does the Bill propose?
The much-anticipated bill, which will next be taken up for discussion in the Rajya Sabha, says any department, institution or company of the government, a joint venture or any other person permitted by the Centre shall be eligible to apply for a licence for the purposes of setting up nuclear power facilities or any other related activities, and import and transportation of nuclear fuel.
Along with exempting research, development and innovation activities from the requirement of a licence, the Bill would “provide for a pragmatic civil liability regime for nuclear damage”, according to its statement of objects.
The operator of the nuclear installation shall be liable for nuclear damage caused by a nuclear incident in the installation, or involving nuclear material transported from that installation, if it occurs before the liability for a nuclear incident involving such nuclear material has been assumed, pursuant to a written agreement by another operator or another operator has taken custody of such nuclear material.
The Bill has, however, provided an exemption to the operator from liabilities in case of damages caused by a nuclear incident due to “a grave natural disaster of an exceptional character, an act of armed conflict, hostility, civil war, insurrection or terrorism”.
One of the major proposals of the Bill is to eliminate the contentious supplier liability clause—Section 46 of the Civil Liability for Nuclear Damage Act (CLND Act). Global suppliers of components had been concerned about the law allegedly allowing action against suppliers in the event of any damage.
In 2015, the ministry of external affairs, through a number of FAQs (frequently asked questions), clarified that Section 46 does not permit victims of a nuclear accident to bring civil law claims against suppliers, but global suppliers have still been concerned over its applicability.
The government has now proposed to completely do away with this section in a bid to allay concerns of global suppliers. This section has been a major deterrent for several US companies from building nuclear power plants in the country, even after the signing of the 123 Agreement between the two countries.
The Bill also proposes changes to the ‘rights to recourse’ for operators, allowing them to seek reimbursement from third parties such as suppliers for faulty components or other issues.
What are the opposition's concerns?
Opposing the Bill, Manish Tewari, a Lok Sabha member from Chandigarh and a leader of the Indian National Congress, said the proposed removal of the “right of recourse” against suppliers could prove dangerous in the event of defective equipment supply. He also opposed the Bill saying it provided for “insufficient liability caps”.
The existing CLND Act says the operator of the nuclear installation, after paying the compensation for nuclear damage, shall have a right of recourse in case “the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes the supply of equipment or material with patent or latent defects or sub-standard services”. But the Shanti Bill omits this specific point or a mention of suppliers or their employees.
Section 17 of the Bill retains other clauses and says the operator shall have a right of recourse where such a right is provided for in a written contract and the nuclear incident has occurred due to an individual with the intention to cause nuclear damage.
What do experts say?
Amit Kapur, partner with JSA Advocates & Solicitors, said the legislation provides a clearer licensing and liability regime, refined operator and supplier liability structures, statutory recognition of the Atomic Energy Regulatory Board, and a graded enforcement and dispute resolution framework, to address long-standing legal and commercial concerns, which have limited the private and foreign investment in the sector.
“Its focus on research development and innovation with a much clearer and stronger regulatory regime augurs well for the future of the Indian nuclear power programme,” he said.
Anujesh Dwivedi, partner, Deloitte India, said the Bill enables a single harmonized law for nuclear power in the country by consolidating and repealing the Atomic Energy Act, 1962, and CLNDA 2010. He also said when enacted, the Bill will also address the issue of suppliers’ exposure to civil liabilities, which were introduced under CLNDA 2010.
“Another significant and progressive aspect of this Bill is the opening up of research, development, design, and innovation in nuclear energy for peaceful purposes, which can be undertaken without the requirement of any licence,” Dwivedi said.
The ambit of the Shanti Bill extends beyond power generation and seeks to bring under regulation the use of nuclear and radiation technologies in areas such as healthcare, food and agriculture, industry and research, while exempting research, development and innovation activities from licensing requirements.