New Delhi: Rules that will follow the proposed Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025, SHANTI, are expected to open space for foreign funding in India’s nuclear power sector, as the government moves to ease long-standing legal and liability hurdles that have kept overseas investors away.
The Bill, tabled in Parliament on Monday, seeks to repeal the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. It comes at a time when India is looking beyond domestic resources to scale up nuclear capacity, driven by the need for reliable base load power as an alternative to coal and the requirement for large volumes of long-term capital.
Foreign investors, including sovereign funds from West Asia, have shown early interest in part-financing India’s nuclear expansion plans. These include participation across the manufacturing value chain of small modular reactors, or SMRs, which are increasingly seen as critical for keeping nuclear power commercially viable in the long term.
Government sources indicated that the equity participation framework under the new regime would be aligned with existing foreign investment guidelines applicable to other sectors, in line with norms set by the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry.
The proposed changes to the two core nuclear laws aim to bring India’s legal framework closer to global practice, addressing investor concerns that have persisted since the civil nuclear liability law came into force. No foreign nuclear vendor has invested in an Indian project since then.
Among the most significant changes is the proposed dilution of Section 17(b) of the Civil Liability for Nuclear Damage Act. The provision allowed nuclear plant operators, after paying compensation, to seek recourse against suppliers if an incident resulted from defective equipment or sub-standard services. This clause, unique to India, has been cited by foreign vendors as a major deterrent due to the uncertainty and duration of liability exposure.
Smaller Indian vendors had also flagged concerns over the broad interpretation of the term supplier, fearing exposure to liability even for minor contracts. SHANTI introduces graded liability caps for nuclear power operators based on the size of their orders, offering clearer risk boundaries.
Under existing rules, the definition of supplier was detailed in Rule 24 of the Civil Liability for Nuclear Damage Rules, which covered manufacturers, designers and quality assurance service providers. While this was interpreted to mean system designers or technology owners, ambiguity remained over whether it also applied to smaller component suppliers. The proposed amendments clarify liability based on the scale and exposure of individual contracts.
The new Bill also revises the framework around the right of recourse, replacing it with a more flexible arrangement. All entities involved in nuclear energy production will be required to secure safety authorisation from the Atomic Energy Regulatory Board. The regulator will retain the power to require explicit contractual provisions on recourse while clearing future projects.
Officials said the capping of vendor liability and clearer definitions are intended to balance safety oversight with investment certainty. Together, these changes are expected to strengthen India’s position in ongoing international negotiations and revive interest from global nuclear equipment makers and financiers.
BI Bureau
