The SHANTI Act and India’s Advancement in Nuclear Energy

India’s energy policy has always been a balancing act between growth, sustainability, and security. In 2025, the government introduced the SHANTI Act, a landmark legislation aimed at reshaping the country’s nuclear energy framework. This article explores the SHANTI Act in depth, analysing its provisions, objectives, and the wide-ranging impact it is expected to have on the Indian economy.

August 25, 2026. By News Bureau

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India’s demand for energy is soaring, driven by rapid economic growth, expanding cities, digital transformation, and industrial progress. As the fastest-growing major economy, the country faces a tough balancing act: powering its future while staying true to climate commitments and environmental goals.

This is where the SHANTI Act (Sustainable Harnessing and Advancement of Nuclear Technology in India), 2025, steps in. It marks a turning point in India’s energy policy, replacing outdated laws with a modern framework that opens the nuclear sector to greater private and foreign participation. By consolidating earlier legislation into one unified system, the Act aims to attract investment, speed up capacity expansion, and strengthen long-term economic growth.

Most importantly, SHANTI signals a shift from a government-dominated nuclear sector to a collaborative model where public and private players work together. This transformation could reshape India’s economy – boosting competitiveness, securing energy supplies, and supporting a cleaner, more sustainable future.

Background

India’s nuclear energy programme has always been shaped by national security, scientific ambition, and the need for reliable power. From independence, the government kept tight control, building nuclear technology and infrastructure mainly through state-run bodies.

The Atomic Energy Act, 1962, replaced the earlier 1948 law and laid down the foundation for India’s nuclear programme. It empowered the government to regulate atomic energy for peaceful purposes, ensuring strict control over research, development, and use of nuclear materials. Further amendments in 1986, 1987, and 2015 to the Atomic Energy Act of 1962 gradually opened the sector beyond the Central Government, allowing government companies and joint ventures to participate in nuclear power generation. The amendments reflected India’s intent to expand capacity while keeping strategic oversight intact.

The Civil Liability for Nuclear Damage Act, 2010, introduced a no-fault liability regime, ensuring compensation in case of nuclear incidents. This law provided clarity on responsibility and built public trust by prioritising safety and accountability in nuclear operations. However, certain provisions, particularly the “right of recourse” clause, created uncertainty for foreign suppliers and investors, thereby restricting international participation in India’s nuclear sector.

Over time, several structural challenges became evident:

Limited capital investment for large nuclear projects
Slow capacity expansion
Regulatory fragmentation
Restricted private sector participation
Growing energy demand and climate commitments

As India’s economy expanded and electricity demand surged, the need for reform in nuclear energy governance became increasingly evident.

The SHANTI Act, 2025

The SHANTI Act, 2025 (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) is a comprehensive legislative reform designed to modernise India’s nuclear energy framework. The Act seeks to consolidate existing laws and create a unified legal structure for nuclear energy governance.

The primary objective of the Act is to accelerate nuclear energy development while ensuring safety, regulatory oversight, and environmental protection.

Key Features of the SHANTI Act

The Act repeals both the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, creating a single integrated legal framework.
For the first time, private companies are allowed to participate in nuclear power projects under government supervision.
The legislation opens avenues for international collaboration and investment in nuclear energy infrastructure.
The Act proposes strengthening regulatory institutions and separating safety oversight from policy promotion.
A revised civil liability regime seeks to reduce legal uncertainties that previously discouraged foreign suppliers.
The government aims to increase nuclear power capacity to around 100 GW by 2047, aligning with India’s long-term energy strategy.
The Act encourages the development of small modular reactors (SMRs), a type of nuclear fission reactor with a rated electrical power of 300 MW or less and advanced nuclear technologies.

These reforms aim to transform India’s nuclear energy sector from a limited government-controlled industry into a dynamic and investment-friendly ecosystem.

The Role of Nuclear Energy in India’s Energy Mix

Right now, nuclear power plays a modest role in India's electricity mix. As per the latest data, the country's operational nuclear capacity stands at approximately 8.78 GW - that's less than 2 percent of India's total installed electricity capacity. While this clean, reliable source provides a stable base-load supply, it remains a small slice compared to coal, renewables, and hydro.

But India has bold plans to change that. The government has outlined an ambitious roadmap to scale up nuclear energy significantly as part of its push toward energy security, net-zero goals, and a cleaner future. Hitting these milestones would transform nuclear power into a major pillar of India's energy system while slashing carbon emissions and supporting industrial growth.

This is exactly where the recently enacted SHANTI Act comes in. Passed in late 2025, it modernises the legal framework, opens limited doors for private sector participation, eases some long-standing barriers around liability and innovation, and aims to accelerate safe, sustainable growth in the sector.

Economic Impact of the SHANTI Act

The SHANTI Act is emerging as a pivotal economic reform in India’s energy sector, with far-reaching impacts on investment, jobs, and sustainability. The government has already earmarked INR 20,000 crore in the 2025-26 Union Budget to accelerate nuclear expansion, including the deployment of small modular reactors by 2033. In parallel, India’s Prototype Fast Breeder Reactor (PFBR) at Kalpakkam has attained criticality, marking a self-sustaining nuclear chain reaction and a major milestone in the second stage of the country’s three-stage nuclear programme. This is part of a broader ambition to scale nuclear capacity from the current 8.7 GW in 2026 to 100 GW by 2047, a twelve-fold increase that would require billions of dollars in capital investment. By opening the sector to private and foreign participation, the Act is expected to mobilise unprecedented financial inflows, strengthening infrastructure and allied industries.

On the employment front, nuclear expansion could generate tens of thousands of high-skilled jobs, while universities and research centres benefit from rising demand in nuclear engineering, materials science, and radiation medicine. Economically, nuclear power offers stable baseload electricity, reducing India’s dependence on volatile fossil fuel imports and supporting uninterrupted growth in industries, data centres, and AI infrastructure. Environmentally, it provides a low-carbon pathway aligned with India’s net-zero 2070 target, complementing renewables with reliability. Beyond energy, the SHANTI Act stimulates high-tech sectors such as robotics and advanced materials, while fostering global partnerships with nuclear leaders like the US, France, Russia, and Japan. In essence, the Act is not just about energy; it is an economic catalyst that strengthens investment, jobs, energy security, and India’s global competitiveness.

Challenges and Concerns with the SHANTI Act

The SHANTI Act, passed in late 2025, has generated significant debate in India’s energy sector. Nuclear energy continues to pose safety and environmental risks, with radiation hazards and unresolved waste management challenges remaining central concerns.

Although the Act grants statutory recognition to the Atomic Energy Regulatory Board (AERB), experts question its independence and ability to enforce strict safety standards. Nuclear power plants demand extremely high capital investment, often exceeding billions of dollars, and require long construction periods of 10-15 years. India’s past projects, such as Kudankulam, have faced delays and cost overruns, raising doubts about the economic viability of scaling up nuclear power to meet the government’s target of 100 GW capacity by 2047.

Public opposition also persists, with local communities resisting projects due to land acquisition disputes, safety fears, and environmental concerns, as seen in protests across Tamil Nadu and Maharashtra. Waste disposal remains unresolved, with India lacking a permanent geological repository for high-level radioactive waste, unlike countries such as Finland and Sweden that are advancing long-term solutions.

The Way Ahead

To realise the full potential of the SHANTI Act, India must ensure a strong and independent regulatory framework aligned with global safety standards to build public and investor confidence. A stable, transparent policy environment with clear liability norms is essential to attract private and foreign investment. Recent developments include provisions for private and foreign participation under strict regulation and support for Small Modular Reactors (SMRs), which are safer and more flexible but still at an early stage. Accelerating capacity addition, strengthening domestic manufacturing, and enhancing skills are key, while transparent governance, strong regulation, and community engagement remain critical for sustainable nuclear expansion.

The SHANTI Act 2025 marks a major reform in India’s nuclear energy policy by replacing outdated legislation with a unified regulatory framework designed to expand nuclear power as a central component of the country’s energy mix. It introduces provisions for private sector participation, encourages international collaboration, and supports emerging technologies such as Small Modular Reactors, all aimed at accelerating nuclear capacity growth. However, the effectiveness of the Act will hinge on strong regulatory oversight, strict safety standards, and sustainable waste management practices. With India targeting 100 GW of nuclear capacity by 2047 as part of its broader goal of becoming a USD 5 trillion economy and a developed nation, the SHANTI Act is positioned to play a pivotal role in ensuring energy security, driving sustainable development, and reinforcing India’s standing in the global energy landscape. In essence, it is not just a legislative reform but a strategic step toward shaping India’s economic and technological future.

- Gautam Bose, Manager (Research), State Bank Academy, Gurugram