New Delhi: India’s Department of Atomic Energy has released draft rules under the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, marking a decisive shift in how the country plans to expand nuclear power while defining who bears the financial risk if something goes wrong. The draft SHANTI Rules 2026 set out the operational details for licensing, operator liability, insurance, decommissioning funds, foreign technology imports and private participation. Public comments are invited until 4 September 2026.
The rules arrive as India targets 100 gigawatts of nuclear capacity by 2047, up from the current 8.78 GW. Official projections indicate capacity could reach about 22.38 GW by 2031-32. A separate Nuclear Energy Mission carries an allocation of Rs 20,000 crore aimed at developing and deploying at least five indigenous small modular reactors by 2033. The broader ambition is to supply reliable baseload power for electricity, industry, data centres, hydrogen production and other high-demand applications while reducing dependence on imported technology and fuel over the long term.
From Two Old Laws to One Modern Statute
The SHANTI Act, 2025 consolidates and modernises India’s nuclear legal architecture. It repeals the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. Under the new law, private companies and joint ventures can participate in operations, generation, manufacturing and limited fuel-cycle activities. Sensitive functions – spent fuel management, reprocessing and heavy water production – remain the exclusive domain of the Central Government.
The Atomic Energy Regulatory Board receives statutory status and greater parliamentary accountability. One of the most consequential changes is the complete removal of supplier liability. Earlier provisions that allowed operators to seek recourse against technology providers have been eliminated. This change is intended to make foreign and domestic suppliers more willing to engage, addressing a long-standing barrier that had slowed projects such as the proposed French reactors at Jaitapur.
Single Composite Licence and Expanded Scope of Nuclear Use
The draft rules introduce a single composite licence that covers building, ownership, operation and decommissioning of a nuclear power plant or reactor. The licence cannot be applied for, granted, divided or severed for any of those activities separately. This streamlining is designed to give private financiers clearer project timelines and reduce sequential regulatory delays.
Nuclear energy under the framework is no longer limited to grid electricity. Permitted applications include captive power for energy-intensive industries such as cement plants and data centres, process heat, hydrogen production, research, education, training and the manufacture of medical isotopes. The rules explicitly contemplate nuclear captive power for semiconductor manufacturing, high-performance computing, quantum technologies and AI-related infrastructure. Industrial users forming joint ventures or building dedicated installations can consume self-generated nuclear baseload power directly, reducing exposure to public-grid tariff volatility.
Operator Liability, Insurance and the Nuclear Liability Fund
At the heart of the draft rules is a clear answer to the question of who pays after a nuclear accident. Liability rests primarily with the operator and is strict, based on the principle of no-fault liability. Claimants do not need to prove negligence. Liability limits are graded according to the type and characteristics of the installation and are set out in the Second Schedule of the SHANTI Act.
Operators must maintain financial protection through insurance, financial security or a combination of both. This protection must remain in place until all spent fuel is removed from the relevant storage pool and must be irrevocable. The financial arrangements must also cover spent fuel management, radioactive waste, decommissioning and site remediation.
A Nuclear Liability Fund financed by a levy on operators is proposed, subject to parliamentary approval. For specified government-owned installations the Central Government assumes liability and no separate insurance is required. An expert group – including specialists in nuclear science and engineering, actuarial science, insurance, law and public-interest representatives – will review the maximum liability limits every five years and may recommend changes.
Decommissioning, Radiation Safety and Orphan Sources
Licensees must pre-fund the costs of plant closure, dismantling and site restoration before fuel is loaded. This requirement is intended to ensure that the long-term financial burden of decommissioning does not fall on the public purse after the commercial life of a reactor ends.
Radiation safety provisions include an Expert Committee to assess radiation damage. The Government will compensate for damage caused by “orphan sources.” A National Registry of Radiation Sources will be maintained, supported by local registers and annual reporting obligations.
Foreign Reactor Technology and the “Proven Design” Test
The draft rules set strict conditions for nuclear installations based on foreign designs. The design must be certified or approved by the regulatory authority in its country of origin. The technology must already be operational either in the country of origin or in another foreign country. “Country of origin” is defined as countries that are self-reliant in nuclear reactor design and supply-chain ecosystems and whose regulatory approvals are trusted globally.
Technology providers must ensure the availability of design support and all necessary permissions from the original developer unless there has been a complete transfer of technology. Otherwise, the person sourcing the technology must ensure that related intellectual property rights vest with the technology developer. The technology must not adversely affect India’s interests, must not pose an unreasonable risk to public health and safety, and must conform to national policies framed under the Act.
These conditions have immediate implications for small modular reactors. Only two SMRs are currently operational worldwide: Russia’s Akademik Lomonosov floating power unit (two 35 MWe modules, commercial operation since May 2020) and China’s HTR-PM (grid-connected December 2021, commercial operations from December 2023). Designs from Holtec International, Rolls-Royce SMR and GE-Hitachi BWRX-300 remain in the design-certification phase in their home jurisdictions and therefore do not yet meet the operational test. The clause effectively narrows the field of immediately eligible foreign SMR suppliers.
Russia already has an established presence through the Kudankulam Nuclear Power Project in Tamil Nadu, where Units 1 and 2 use VVER-1000 reactors. Discussions have covered serial construction of higher-capacity VVER-1200 units and possible deployment of Russian SMRs, including floating solutions presented to Indian partners in 2024. Cost comparisons place indigenous pressurised heavy water reactors at roughly Rs 18 crore per MW-electric, Russian designs at about Rs 34 crore per MW-electric, and Western light-water reactors at still higher levels. Capital cost and construction duration remain the dominant factors in overall project economics.
In-Principle Approval and Project Pipeline Flexibility
Where an applicant has not yet selected a site or reactor technology, the licensing authority may grant in-principle approval. This is described as a statement of support that allows the applicant to proceed with negotiations with technology vendors and to acquire land and other infrastructure. It is not equivalent to a final licence and can be revoked on grounds of public interest, material facts indicating ownership or control by entities inimical to defence, national security or public health and safety, or if obtained through misrepresentation or suppression of material facts.
Tariff Framework and Private Sector Interest
Tariff determination for nuclear power generated by private operators involves the Chairperson of the Central Electricity Authority in all review matters. A committee constituted by the Central Government will decide norms and mechanisms for fixation of tariffs from nuclear power plants set up by private players. Existing plants continue under arrangements involving the Department of Atomic Energy and the Central Electricity Authority. Industry voices have sought greater freedom for developers to sell or supply electricity under the Electricity Act, 2003 without additional departmental approvals.
Major industrial groups including Vedanta, Adani, Tata Power and Reliance Industries have been reported as positioning themselves for opportunities in the emerging nuclear market. The combination of composite licensing, clarified liability and the removal of supplier liability is intended to make project finance more predictable for these and other private participants.
Strategic Context and Next Steps
Prime Minister Narendra Modi has stated that India aims to operationalise five new nuclear reactors during the current decade as part of the effort to reach 100 GW. He has linked the SHANTI framework to energy security and the broader goal of self-reliance, emphasising that India must strengthen domestic capabilities and protect national interests.
The draft rules represent the first major set of subordinate legislation under the SHANTI Act. They attempt to balance two objectives simultaneously: attracting private capital and foreign technology to scale nuclear capacity rapidly, while retaining clear lines of financial responsibility, government control over sensitive fuel-cycle activities and regulatory oversight through a strengthened Atomic Energy Regulatory Board.
Because the documents remain in draft form, the final notified rules may incorporate changes arising from the public consultation that closes on 4 September 2026. Stakeholders have been invited to submit comments and suggestions through the channels specified by the Department of Atomic Energy.
The framework seeks to answer two practical questions that have long constrained India’s nuclear expansion. How can the country build far more nuclear capacity with private and international participation? And how can it ensure that the financial consequences of that expansion – both during operation and decades later during decommissioning – are clearly assigned and adequately secured? The draft SHANTI Rules 2026 provide the government’s proposed answers. Their final shape will influence the pace, cost and risk profile of India’s nuclear trajectory for decades to come.
FAQs
1. What is the SHANTI Act, 2025 and why were the draft rules released?
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 consolidates India’s nuclear laws into a single statute. It repeals the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. The Act opens limited private sector and joint-venture participation in nuclear power generation, operations, manufacturing and certain fuel-cycle activities while keeping sensitive functions such as spent-fuel management, reprocessing and heavy-water production exclusively with the Central Government. It also grants statutory status to the Atomic Energy Regulatory Board. The Department of Atomic Energy released the draft SHANTI Rules, 2026 on 14 August 2026 to provide the detailed regulatory framework for implementing the Act. Public comments are open until 4 September 2026.
2. Who pays if a nuclear accident occurs under the new rules?
Liability rests primarily with the operator of the nuclear installation and is strict (no-fault). Claimants do not need to prove negligence. Operators must maintain insurance, financial security or a combination of both; this protection remains in force until all spent fuel is removed from the storage pool and must be irrevocable. A Nuclear Liability Fund financed by an operator levy (subject to parliamentary approval) is proposed. An expert group reviews liability limits every five years. For specified government-owned installations the Central Government assumes liability and no separate insurance is required. Supplier liability has been completely removed.
3. What is the single composite licence and what activities does it cover?
The draft rules introduce one single composite licence that authorises building, owning, operating and decommissioning of a nuclear power plant or reactor. The licence cannot be applied for, granted, divided or severed for any of those activities separately. This replaces earlier fragmented permissions and is intended to give private developers clearer project timelines. The same framework also covers wider applications beyond grid electricity, including captive power for industry and data centres, process heat, hydrogen production, medical isotopes, research and training.
4. What conditions apply to foreign reactor technology under the draft rules?
Foreign nuclear technology must be design-certified or approved by the regulatory body in its country of origin and must already be operational either in that country or in another foreign country. “Country of origin” is defined as nations that are self-reliant in nuclear reactor design and supply-chain ecosystems and whose regulatory approvals are trusted globally. Technology providers must ensure continued design support and necessary permissions unless there has been a complete technology transfer. Only two small modular reactors currently meet the operational test worldwide (Russia’s Akademik Lomonosov and China’s HTR-PM), which has implications for the near-term supplier field.
5. What are India’s nuclear capacity targets and how do the rules support private participation?
India aims to raise nuclear capacity from the present 8.78 GW to 100 GW by 2047, with an intermediate projection of about 22.38 GW by 2031-32. A Nuclear Energy Mission has allocated Rs 20,000 crore for the development of at least five indigenous small modular reactors by 2033. The draft rules support this expansion by clarifying liability, introducing the composite licence, allowing in-principle approvals before site or technology selection, and enabling private companies and joint ventures to participate under regulatory oversight. Major industrial groups have shown interest, while sensitive fuel-cycle activities remain under Central Government control.
