India's Nuclear Liability Reforms: A Catalyst for Foreign Capital and Clean Energy Innovation

India's energy transition has long been constrained by its rigid nuclear liability framework, a policy relic of the 1962 Atomic Energy Act that deterred foreign suppliers and stifled technological collaboration. But in late 2025, a seismic shift occurred. The government passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, a landmark piece of legislation that caps supplier liability, permits 49% foreign direct investment (FDI) in nuclear projects, and dismantles decades of state monopolies in the sector according to Energetica India. This reform, coupled with a $2.4 billion Nuclear Energy Mission, signals India's intent to become a global nuclear energy hub while accelerating its clean energy ambitions as reported by the Ministry of Power. For foreign investors and technology firms, the implications are profound: a $214 billion market is now open for business according to oilprice.com.

A New Legal Framework for a New Era

The SHANTI Bill addresses a critical bottleneck in India's nuclear expansion: the 2010 Civil Liability for Nuclear Damage Act, which imposed unlimited liability on foreign suppliers in the event of an accident. This provision, rooted in the trauma of the 1984 Bhopal disaster, effectively barred U.S. and European firms from entering the Indian market according to Reuters. The new law caps supplier liability at the value of their contract and shields operators from damages caused by events like terrorism or civil unrest, aligning India with international norms that place safety responsibility on plant operators as explained by Livemint.

According to a report by Energetica India, the SHANTI Bill's FDI provisions are a game-changer. By allowing private and foreign ownership in nuclear projects, the government is inviting capital from global players like General Electric and Westinghouse, which had previously shied away from India's risk-averse legal environment as reported by Energetica India.

The Nuclear Power Corporation of India Limited (NPCIL) will retain operational control, but private firms will now participate in fuel fabrication, reactor design, and equipment manufacturing-a shift that could unlock $2.31 billion in nuclear equipment demand by 2033 according to Nuclear Business Platform.

Strategic Partnerships and Technology Transfer

India's reforms are not merely legal but geopolitical. The U.S.-India 123 Civil Nuclear Agreement, long stalled by liability concerns, is now fully operational. In 2025, a landmark technology transfer agreement between Flowserve Corporation and Indian firm CORE Energy Systems enabled the local production of Primary Coolant Pumps (PCPs), a critical component for reactor safety according to World Nuclear News. This deal, authorized by the U.S. Department of Energy under 10 CFR Part 810, marks the first U.S. technology transfer to India under the "Make in India" initiative and underscores the growing trust between the two nations as reported by NEI Magazine.

France, too, has deepened ties. A 2025 letter of intent with Areva and other French firms focuses on co-developing Small Modular Reactors (SMRs) and advanced reactor designs according to Nuclear Business Platform. India's Nuclear Energy Mission, with its $2.4 billion budget, aims to operationalize five SMRs by 2033, leveraging foreign expertise while building domestic manufacturing capacity as reported by PIB. These partnerships are not one-sided; India's vast market and engineering talent offer foreign firms a gateway to scale their technologies in a country targeting 100 GW of nuclear capacity by 2047 according to World Nuclear Organization.

Challenges and the Road Ahead

Despite these strides, hurdles remain. Land acquisition for new reactors remains contentious, and regulatory bottlenecks-such as delays in licensing and site approvals-could slow progress according to Vajira Institute. Critics also argue that capping supplier liability undermines accountability, a concern amplified by India's history of industrial disasters as reported by Reuters. Yet, the government's calculus is clear: without foreign capital and technology, India's goal of reducing coal dependence and achieving net-zero emissions by 2070 is unattainable according to Modern Diplomacy.

The SHANTI Bill's passage has already triggered a wave of interest. Six major Indian conglomerates-Tata, Reliance, Adani, and others-have submitted bids for SMR sites, signaling a domestic-private sector alignment according to World Nuclear Organization. Meanwhile, U.S. firms like Holtec International are collaborating on spent fuel storage solutions, and Larsen & Toubro (L&T) is positioning itself as a global supplier of nuclear equipment according to Nuclear Business Platform.

Conclusion: A Win-Win for India and Global Investors

India's nuclear liability reforms represent more than a policy tweak-they are a strategic pivot toward energy security and climate resilience. By harmonizing its legal framework with international standards, India is not only attracting foreign capital but also becoming a testbed for next-generation nuclear technologies. For investors, the rewards are clear: a market poised to grow 12-fold in the next two decades, with India's state-owned and private sectors acting as dual engines of growth. As the world grapples with energy transitions, India's bold move offers a blueprint for how regulatory innovation can unlock clean energy's full potential.