The SHANTI Bill, 2025: A Comprehensive Legal & Investment Explainer for the Nuclear Energy Sector

India’s civil nuclear sector has undergone its most significant reform in over six decades. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 consolidates nuclear regulation, modernises safety and liability norms, and — for the first time — creates a transparent gateway for private sector participation in nuclear power generation and related activities.

This shift marks a pivotal moment for India’s energy transition, opening an avenue long restricted to state operators and unlocking a high-potential investment frontier for domestic and international stakeholders.

A Structural Break from State Monopoly

Under the earlier regime, the Atomic Energy Act, 1962 restricted nuclear power generation and most allied activities solely to government-owned entities. The SHANTI Bill recalibrates this by opening several parts of the nuclear ecosystem to private companies while preserving sovereign control over strategic functions.

Side-by-Side Comparison: Old Regime vs. SHANTI Bill

Area	Earlier Framework (Atomic Energy Act, 1962 + Fragmented Rules)	SHANTI Bill, 2025 (Unified Framework)
Industry Structure	Complete state monopoly (NPCIL, DAE)	Private players allowed in multiple nuclear activities
Licensing Authority	AERB existed but without statutory backing	AERB granted full statutory powers & enforcement authority
Private Sector Participation	Not permitted in nuclear power; extremely limited in ancillary services	Permitted to build, own, operate & decommission nuclear facilities (non-strategic)
Strategic Activities	All functions under government control	Strategic functions remain sovereign; others opened to private sector
Liability Regime	Unclear, rigid, supplier liability concerns; deterred foreign OEMs	Operator-centric, capped liability; Nuclear Liability Fund; supplier liability removed
Project Development	Limited to PSU-led EPC arrangements	Private SPVs, JVs, technology collaborations fully permitted
Small Modular Reactors/Advanced Reactors	No framework enabling private SMR participation	Explicit pathways for SMRs, advanced reactors & technology partnerships
Financing Environment	High risk; no clarity on insurability or liability quantification	Defined insurance requirements, risk quantification & backstop fund
Regulatory Certainty	Fragmented, multi-rule regime	Single unified law streamlining approvals & compliance
Global Alignment	Deviations from international norms	Harmonised with global nuclear liability and safety standards

Statutory Empowerment of the AERB

A core reform is the statutory recognition of the Atomic Energy Regulatory Board (AERB). It now has:

• Clear licensing authority

• Enhanced inspection and sanctioning power

• Transparent processes aligned with global best practices

• Stronger accountability norms

This shift significantly improves regulatory predictability, a key criterion for investor confidence.

The SHANTI Bill addresses long-standing challenges by introducing:

• Operator-only liability, capped and insurable

• Mandatory financial security/insurance

• Creation of a Nuclear Liability Fund

• Removal of supplier liability

• Specialised dispute adjudication bodies

This brings India closer to global nuclear norms, directly improving bankability and international participation.

The Bill unlocks opportunities for:

• Small Modular Reactors (SMRs)

• Advanced Gen-III+ and Gen-IV technologies

• Joint ventures with foreign OEMs

• Domestic manufacturing ecosystems

• Private-led innovation and R&D

SMRs are expected to play a transformative role in industrial decarbonisation and distributed baseload power.

The Bill creates a unified licensing model with:

• Clear site approval pathways

• Integrated environmental and safety assessments

• Export–import controls under one framework

• Life-cycle obligations for operators

This replaces the earlier patchwork of rules and processes.

What the SHANTI Bill Means for Investors

The nuclear sector has now become investible, with clarity on risk, regulation, and long-term returns. Key implications include:

1. New Asset Class: Nuclear Infrastructure

Nuclear power joins renewable and thermal as a legitimate infrastructure investment class, with predictable regulatory oversight and defined liabilities.

2. Enhanced Bankability

3. Capped operator liability

4. Statutory regulator

5. Nuclear Liability Fund

6. Global-aligned norms

These factors substantially de-risk financing for long-tenor nuclear assets.

3. Early-Mover Advantage in SMRs

Investors can strategically position themselves in:

• SMR deployment partnerships

• Industrial captive SMR projects

• Hybrid energy systems (SMR + hydrogen/heat)

• Greater Scope for Private SPVs & JVs

The law now explicitly permits:

• Private SPVs for nuclear plant development

• Joint ventures with global OEMs

• Multi-stakeholder consortia for SMR deployment

• Opportunities Across the Value Chain

Investible segments include:

• Reactor construction and EPC

• Fuel-cycle and nuclear logistics

• Component manufacturing

• Storage, transport & processing facilities

• Nuclear waste technology solutions

• Access to Green Finance

Nuclear is positioned as clean baseload power, improving access to:

• Green bonds

• Energy-transition funds

• Sovereign climate-focused capital

• ESG-aligned institutional investors

Strategic Outlook

The SHANTI Bill marks a paradigm shift, integrating nuclear energy into India’s long-term clean baseload strategy. For investors and corporates, the sector offers deep, long-duration opportunities — but also demands sophisticated regulatory, commercial and contractual navigation.

Early movers who approach this sector with structured legal strategy and informed capital allocation will shape the next era of India’s nuclear energy expansion.

The article is authored by Ms. Yashodhara B. Roy (Principal Associate)