India's SHANTI 2025 Bill Shifts Liability to Spur Nuclear Investment

India introduced a landmark nuclear energy bill to parliament on Monday, aimed at reshaping its energy landscape and accelerating the development of nuclear power. The proposed legislation, known as the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) 2025, seeks to replace two outdated laws and introduce a more pragmatic civil liability regime. This reform will shift responsibility from suppliers to plant operators in case of incidents, while also allowing the government to establish a dedicated Nuclear Damage Claims Commission.

The new bill aligns India with global standards by capping liability for operators and limiting legal recourse to cases of intentional harm or negligence. It also aims to attract private and foreign investment by removing barriers that had previously deterred global suppliers from entering the Indian market. These changes are part of the government's broader strategy to expand nuclear power capacity to 100 gigawatts by 2047, a goal tied to the country's ambitions of becoming a developed economy by that year.

The introduction of the SHANTI 2025 bill marks a significant shift in India's nuclear policy, which had long been constrained by liability rules that exposed both suppliers and operators to litigation. By narrowing legal liability and limiting the jurisdiction of civilian courts over nuclear matters, the government is hoping to unlock capital and expertise from the private sector. The bill also introduces measures such as an Atomic Energy Redressal Advisory Council and a Nuclear Damage Claims Commission to handle disputes and claims in a more structured manner.

India's current nuclear energy capacity stands at just 8.8 gigawatts, far below the government's 2032 target of 22 gigawatts and the 2047 goal of 100 gigawatts. With coal accounting for nearly 70% of electricity generation, the government sees nuclear power as a crucial component of its clean energy strategy and net-zero ambitions by 2070. The SHANTI 2025 bill is part of a broader legislative agenda that includes opening the sector to private players.

The need for reform became evident as existing regulations failed to attract foreign investment. Companies such as General Electric and Westinghouse had been hesitant to engage in India's nuclear market due to the liability risks. The new law aims to address these concerns by isolating suppliers from legal action unless their actions were intentional or grossly negligent. This change is expected to make India a more attractive destination for global nuclear technology providers.

The SHANTI 2025 bill introduces a range of structural changes, including the creation of specialized tribunals and regulatory bodies to manage disputes and enforce compliance. For example, a Nuclear Damage Claims Commission will be established to adjudicate claims related to severe nuclear incidents, with claimants required to file within 10 years for property damage and 20 years for personal injury. This streamlined process is intended to reduce litigation delays and provide quicker resolution for victims of nuclear accidents.

Another key feature of the bill is the establishment of a Nuclear Liability Fund, which will cover damages exceeding the operator's liability cap or when the central government owns the facility involved in the incident. This fund may also access international compensation mechanisms like the Vienna-based Convention on Supplementary Compensation for Nuclear Damage. These mechanisms aim to provide a more predictable and transparent framework for managing nuclear liabilities.

Experts are closely watching how the new law will impact India's ability to attract investment and scale nuclear power production. The government estimates that achieving its 100 gigawatt target by 2047 will require $213 billion in funding, a significant portion of which will need to come from private and foreign sources. By lifting restrictions and introducing a more business-friendly environment, India hopes to tap into global nuclear technology markets that have remained largely closed to it for decades. The bill also addresses a major policy debate over the "right to recourse" for plant operators, a provision that had previously allowed operators to hold suppliers accountable for negligence. Under SHANTI 2025, this right is now limited to cases where the supplier or its employee acted with intent to cause damage. This shift is expected to reduce legal uncertainty for suppliers and encourage more partnerships with Indian operators.

The timing of the bill's introduction is significant, as it coincides with broader economic reforms and efforts to attract foreign investment in key sectors. The government also recently approved 100% foreign ownership in the insurance sector, signaling a broader shift toward market liberalization. Together, these reforms aim to position India as a more attractive investment destination and accelerate infrastructure development.

Despite the government's optimism, the success of the SHANTI 2025 bill will depend on its implementation and enforcement. The nuclear sector remains highly regulated, and shifting responsibility from suppliers to operators could create new challenges in managing risk and ensuring safety. There are also concerns about the capacity of Indian regulators and legal bodies to handle the complexities of a rapidly expanding nuclear program. Moreover, the global nuclear industry is itself facing challenges, including rising costs and delays in reactor construction. India's ambitious goals will require sustained investment, technological partnerships, and efficient project execution. The SHANTI 2025 bill is a critical first step, but its long-term success will hinge on how well it can attract capital and expertise to build a sustainable nuclear energy infrastructure.