Under the SHANTI Act, private Indian companies may hold nuclear power licences, with operator liability capped by reactor size, from a date yet to be notified

The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025 (Act No. 39 of 2025), which received assent on 20 December 2025 and was published in the Gazette of India on 21 December 2025, repeals the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, and, once in force, makes any company incorporated in India, alone or in a joint venture, eligible for a licence to build, own, operate and decommission a nuclear power plant, with no equity ceiling in the text. The operator's liability for nuclear damage is capped by reactor size at INR 100 crore to INR 3,000 crore, the Act gives the operator a right of recourse only where a written contract provides it or the incident was intentionally caused by an individual, and it comes into force only on a date the Central Government notifies, a notification we have not found.

What is the Act, and has it commenced?

The Act is Act No. 39 of 2025. Its short title, in section 1(1), is the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025, shortened in the Department of Atomic Energy's own papers to the SHANTI Act. The Gazette of India Extraordinary of 21 December 2025 (Part II, Section 1, No. 63) records assent on 20 December 2025. Section 91 repeals the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, and saves action taken and existing rules until they are superseded.

Section 1(2) provides that the Act "shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint", and allows different dates for different provisions. The Department of Atomic Energy's Acts and Rules page, as read on 28 October 2026, lists the Act's gazette text but, on our reading, no commencement notification. The Central Government for this Act is the Department of Atomic Energy (section 2(6)). We have not seen a notification that brings any provision into force.

Who may apply for a licence once the Act commences?

Section 3(1) makes four classes of person eligible to apply: a Department of the Government of India or an institution or corporation owned or controlled by it; a Government company; "any other company"; and a joint venture among any of these. The Central Government may also permit another person by notification. Section 2(9) defines "company" by reference to the Companies Act, 2013 but excludes "a company incorporated outside India". Among companies, the Act admits only those incorporated in India, unless the Central Government permits another person by notification under section 3(1)(e).

The text contains no cap on the equity a private or foreign investor may hold in the licensee. The two limits on ownership are different in kind. Under section 7(4)(a) no licence may be granted to a company which the Central Government has reason to believe is "owned, controlled or dominated by entities who are inimical to defence and national security, or health and safety of the public", and section 8(2)(a) allows an existing licence to be suspended or cancelled on the same ground. Whether foreign investment limits under the foreign exchange rules apply to a licensee, the Act does not say, and we have not read a notified policy on it.

Section 3(2)(a) makes a licence mandatory to "build, own, operate or decommission a nuclear power plant or reactor". The draft rules of 14 August 2026 make this a single composite licence for all four activities, serving the grid, captive generation, process heat and hydrogen, isotopes or research.

What stays with the State?

Section 3(5) reserves to the Central Government, or an institution wholly owned by it, enrichment or isotopic separation of prescribed substances (unless notified otherwise), spent fuel management including reprocessing and high-level waste, and the production and upgradation of heavy water. Under section 5(2), working of uranium and thorium mines is confined to the Government, a Government company or a corporation it owns or controls. The licensee delivers spent fuel and heavy water back to the Government and pays the cost (section 3(4)). Tariff for electricity from nuclear plants is fixed by the Central Government under section 37, notwithstanding the Electricity Act, 2003.

What does the regulator do?

The Atomic Energy Regulatory Board is deemed constituted under the Act (section 17(1)). It has a Chairperson, a Whole-time Member and up to seven Part-time Members, chosen on the recommendation of a search-cum-selection committee (section 17).

Its powers sit in section 24. It frames safety standards and codes for the life of a facility, notifies exposure and release limits, certifies persons, and may "issue such directions to the holders of safety authorisations and other persons" in the interests of safety (section 24(4)). It grants the safety authorisation that section 3(3) requires in addition to the licence where radiation exposure is likely, and that section 4 requires for radioactive substances and radiation generating equipment. It may modify, suspend or cancel an authorisation after a hearing (section 8(1)).

The licence is granted by the Central Government. The Board may recommend its suspension, modification or cancellation (section 24(3)(d)), and section 8(1) also lets the Board act on a licence for breach after a hearing. A licence may not be suspended for more than a year (section 8(3)), and before cancellation the Government must weigh the protection of lenders and investors and a transition plan (section 8(5)). Penalties run from INR 50,000 to INR 1 crore (First Schedule) and are imposed by an adjudicating officer under section 70.

How is operator liability fixed?

Section 11 makes the operator of the nuclear installation liable for nuclear damage from an incident in the installation or in transit before liability passes to another operator. Section 12 excuses the operator for grave natural disaster of an exceptional character and for armed conflict, hostility, civil war, insurrection or terrorism, and for damage to the installation, other property on the same site and the means of transport. The operator is also not liable to a person for damage caused by that person's own negligence or acts.

Liability is capped. The Second Schedule sets the operator's limit by the thermal power of the reactor: INR 3,000 crore above 3,600 MW; INR 1,500 crore above 1,500 MW and up to 3,600 MW; INR 750 crore above 750 MW and up to 1,500 MW; INR 300 crore above 150 MW and up to 750 MW; and INR 100 crore for reactors up to 150 MW, fuel cycle facilities other than reprocessing plants, and transport of nuclear material. Section 13(1) sets the overall maximum per incident at 300 million Special Drawing Rights, or more if notified. Under section 14(1)(a) the Central Government pays what exceeds the operator's limit, and section 14(2) permits a Nuclear Liability Fund for the purpose. Section 15 requires the operator to hold insurance or other financial security for the Schedule amount before operation, and exempts installations owned by the Central Government.

What is the supplier's position?

The Act has no provision that makes a supplier liable for nuclear damage, and the word "supplier" does not appear anywhere in it. Section 16 gives the operator, after paying compensation, a right of recourse only where "such right is expressly provided for in a contract in writing", or where the incident resulted from an individual's act or omission "with an intention to cause nuclear damage". Recourse is a matter of the supply contract; the Act states no cap.

What must a manufacturer or engineering, procurement and construction (EPC) supplier hold?

On the Act, the licences attach to activities, not to the label of supplier. Section 3(2)(e) and (f) require a licence to import, export, acquire or use "prescribed equipment", and to import or export technology or software that may be used to develop, produce or use prescribed substances or equipment. Prescribed equipment is whatever the Central Government specifies by notification (section 2(32)), and we have not seen that notification. Section 4 requires a safety authorisation from the Board to manufacture or transfer radioactive substances or radiation generating equipment.

The draft rules, published for consultation on 14 August 2026, go further. Draft rule 24 says that a licence for acquisition of prescribed equipment "is intended only for imported prescribed equipment", and that a licence "is ordinarily not intended for any person manufacturing prescribed equipment in the country for use by a licensee", although the Government and the Board may inspect the premises. Draft rule 44 puts duties on manufacturers and suppliers instead: quality control, quality assurance, procurement control and records. Draft rule 38 requires the licensee to inform designers, manufacturers, suppliers and contractors of their responsibilities through contracts or other arrangements, and draft rule 49(4) states that this does not relieve the licensee of prime responsibility.

What do the figures look like?

An illustration. The projects, ratings and arrangements below are hypothetical. They apply the Second Schedule and draft rule 77 of the draft SHANTI Rules.

A private operator with two reactors on one site
  Reactor A, thermal power 2,000 MW           Schedule limit INR 1,500 crore
  Reactor B, thermal power 200 MW             Schedule limit INR 300 crore
  Insurance or security to hold (draft rule 77, one site, higher category)
                                              INR 1,500 crore
  Shares or bonds pledged at 1 : 1.33         INR 1,995 crore
  Incident at Reactor B only                  operator's liability INR 300 crore

Recourse against a component supplier after the operator pays
  Contract silent                             none under section 16(a)
  Contract allows recourse up to INR 200 crore: up to that sum

The draft rule treats several installations at one site as one for insurance and takes the highest category, while section 11(3) caps liability for each installation at its own Schedule figure. Section 16 has no ceiling of its own, so the supplier's exposure is what the contract states.

What remains unsettled?

Five points.

Commencement. The Act waits for a notification, and we have not found one. Which provisions apply, and from when, is open.

Foreign investment. The Act admits only Indian-incorporated companies and does not restate any sectoral limit. Whether and how foreign equity is permitted in a licensee is a matter we could not source.

Final rules. The draft rules and regulations were open for comment to 4 September 2026. We have found no final version, so the draft treatment of domestic manufacturers and pledged security may change.

Scope of prescribed equipment. The notification that specifies it decides which components need a licence, and we have not seen it.

Supplier recourse. The Act says nothing on whether a clause giving recourse for ordinary negligence, or an indemnity from a supplier to the operator, is within section 16(a), and no rule or ruling addresses it.