USISPF Praises SHANTI Act

USISPF Praises SHANTI Act

Why in News? 

Recently, the US-India Strategic Partnership Forum (USISPF) described SHANTI Act as a historic turning point in India’s energy landscape and the most comprehensive overhaul of the nation’s civil nuclear framework since independence.

Key Provisions and Structural Changes under SHANTI Act 2025

• Modernisation of Nuclear Laws: The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 replaces India’s old nuclear energy laws with one unified statute. This new law abolishes the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 and brings all civil nuclear regulations together for the first time.

• Private Participation: A major transformation under the Act is the legal permission for Indian private companies and joint ventures to enter the civil nuclear power sector. For the first time since independence, these entities can apply for licences to build, own, operate, and decommission nuclear power reactors under government authorisation. 

• Private Sector Activities: Under the new law, eligible private firms can also engage in nuclear fuel fabrication processes, including conversion, refining, and limited enrichment up to specified thresholds, as notified by the government. These firms may transport, store, import or export nuclear fuel, materials, equipment, technology, and software necessary for such activities.

• Strategic Government Control: It retains exclusive state control over strategic elements of the nuclear fuel cycle. Activities such as uranium and thorium mining, isotopic enrichment beyond defined limits, high-level radioactive waste management, spent fuel reprocessing, and heavy water production remain under the central government or designated public entities. 

• Nuclear Safety Regulator: The Act grants statutory authority to the Atomic Energy Regulatory Board (AERB), transforming it into a legally empowered regulator responsible to Parliament. The AERB is authorised to issue mandatory safety authorisations, conduct inspections, enforce radiation exposure limits, regulate waste disposal, and suspend or revoke licences for non-compliance.

• Nuclear Liability Framework: The SHANTI Act introduces a revised liability regime for nuclear incidents. It retains the no-fault liability principle, meaning an operator is responsible for nuclear damage regardless of negligence. However, supplier liability provisions have been removed, which means equipment vendors are generally not liable unless expressly agreed in contract. Operator liability caps are now linked to reactor capacity categories rather than a single flat limit.

• Damage Claims Mechanism: The legislation envisages the establishment of a nuclear disputes tribunal or Nuclear Damage Claims Commission to handle compensation disputes arising from nuclear incidents. This statutory body is intended to ensure that claims are resolved through a specialised forum rather than ordinary civil courts. Appeals against these tribunal decisions can be taken to the Supreme Court of India within specified timelines.

• Penalty Provisions: The SHANTI Act includes provisions for penalties and sanctions against violations of safety regulations and other obligations. These penalties vary by the severity of offences and provide for monetary fines and legal consequences for entities that fail to comply with nuclear safety and regulatory frameworks.

Why the Reform was Needed?

• Outdated Legal Framework: India’s nuclear governance was based on the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010. These laws were designed for an era when the government was the sole actor in the nuclear sector. They did not reflect modern energy demands or international best practices. The legal structure made it complex and slow to approve new projects.

• Restricted Private Participation: For more than six decades, India’s nuclear power generation and related activities were mostly reserved for government bodies like the Nuclear Power Corporation of India Limited (NPCIL). This strict state monopoly limited opportunities for private firms to invest, innovate, and operate nuclear facilities. India struggled to mobilise the funds and expertise necessary for large‑scale expansion. 

• Slow Growth of Nuclear Capacity: India’s installed nuclear power capacity has remained relatively low compared with its goals. The country had around 8.8 GW of nuclear capacity in late 2025 despite decades of operation. This slow progress was due to high capital costs, limited project management capacity, and regulatory bottlenecks tied to the older laws. To meet long‑term targets, like 22 GW by 2032 and 100 GW by 2047 structural reforms were essential. 

• Need to Meet Clean Energy Targets: India has set ambitious climate goals, including achieving net‑zero emissions by 2070 and increasing the share of clean energy in its energy mix. Nuclear power provides 24×7 clean baseload electricity that complements solar and wind, which are intermittent. Expansion of nuclear capacity was necessary to reduce reliance on fossil fuels and data centres which need reliable electricity. 

• Lack of Regulatory Credibility: Under the earlier system, India’s nuclear safety regulator did not have statutory authority and operated without strong legal backing. This raised concerns about regulatory independence, transparency, and public trust in safety oversight. Reform was needed to create a statutorily empowered regulator with clear authority to enforce safety standards.

Significance of USISPF’s Support

• The US-India Strategic Partnership Forum (USISPF) publicly welcoming the SHANTI Act highlights strong confidence among prominent US-linked stakeholders in India’s energy reforms. USISPF called the legislation a turning point in India’s nuclear energy strategy. This endorsement by a major bilateral economic and policy forum boosts global perception of the reforms.
• The United States government also praised the SHANTI Act as a step toward a stronger energy security partnership. The US Embassy stated that Washington is prepared to engage in joint innovation and R&D with India in the energy sector. This reaction reflects a shared interest in developing clean and reliable nuclear energy cooperation between the two democracies.
• USISPF’s support signals that the Act could attract Foreign Direct Investment (FDI), including from American firms. Under the new legal framework, private companies can now build, own, and operate nuclear power plants and undertake related activities under licence. This creates routes for technology partnerships in areas such as Small Modular Reactors (SMRs), advanced fuel systems, and safety technologies. Such cooperation can accelerate deployment of new nuclear technologies in India.
• In a world shaped by great-power competition, especially in the Indo-Pacific region, closer India–US collaboration on nuclear energy has strategic implications. Strengthened cooperation in nuclear energy can contribute to diversification of global nuclear supply chains. It can also reduce reliance on a single dominant supplier, thus enhancing energy resilience for both partners.