Parliament enacted the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (SHANTI Act) on 18 December 2025, comprehensively overhauling India's nuclear energy regulatory framework. The legislation establishes a modern licensing regime for nuclear facilities, introduces strict liability norms for nuclear damage, creates a dedicated Nuclear Liability Fund, and repeals both the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010.
Background
India's nuclear energy sector has operated under the Atomic Energy Act, 1962 — a statute drafted in an era when the country's nuclear programme was in its infancy and focused primarily on weapons capability and basic research. Over six decades, the nuclear landscape transformed substantially with the expansion of civilian power generation, entry into international nuclear cooperation agreements, and the need for a safety and liability framework consistent with global standards.
The Civil Liability for Nuclear Damage Act, 2010 (CLNDA) was enacted following the Indo-US Nuclear Deal to address liability concerns of international suppliers. However, the CLNDA's right of recourse provision (Section 17) against suppliers remained contentious and was cited by foreign nuclear companies as an impediment to participating in India's nuclear expansion programme. The SHANTI Act addresses these longstanding structural and diplomatic concerns while modernising the overall governance framework.
Key Provisions
The SHANTI Act 2025 introduces the following framework:
Licensing regime: A comprehensive licensing system for the construction, operation, modification, and decommissioning of nuclear facilities. All nuclear installations must obtain a license from the designated regulatory authority, with specific conditions on safety standards, environmental clearances, and operational protocols.
Strict liability for nuclear incidents: The Act imposes strict liability on nuclear facility operators for any nuclear damage, irrespective of fault. This replaces the previous fault-based liability regime and aligns India with the international standard under the Vienna Convention on Civil Liability for Nuclear Damage.
Nuclear Liability Fund: A dedicated fund, financed through contributions from licensed operators and government budgetary allocation, to provide compensation for nuclear damage claims that exceed an individual operator's liability ceiling.
Regulatory modernisation: The Act establishes updated safety standards and inspection requirements, incorporating lessons from global nuclear incidents and reflecting current International Atomic Energy Agency guidelines.
Repeal of predecessor legislation: The Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 are repealed in their entirety, with transitional provisions to preserve the validity of actions taken under the outgoing statutes.
Implications for Practitioners
The SHANTI Act creates an entirely new regulatory paradigm for energy sector practitioners. Lawyers advising nuclear facility operators must familiarise themselves with the new licensing requirements, which are substantially more detailed than the permissions framework under the Atomic Energy Act.
The shift to strict liability fundamentally alters the risk allocation for nuclear projects. Insurance and indemnity provisions in existing and future contracts for nuclear facility construction and supply will need to be restructured to account for the new liability framework. International nuclear suppliers who previously hesitated due to CLNDA concerns may re-evaluate their participation in Indian projects.
The Nuclear Liability Fund mechanism introduces a new compensation architecture that practitioners handling claims on behalf of affected communities will need to navigate, including procedural requirements for fund access and quantum of compensation guidelines.