Atomic Energy Amendment Bill, 2025
Content
- Introduction
- Rationale for Reformation
- Key Provisions of the bill
- India’s Long-Term Vision
- Small Modular Reactors
- Private Sector Interest
- Nuclear Liability Law
- Challenges and the Way Forward
Introduction
The Government of India has recently cleared the Atomic Energy Amendment Bill, 2025. It has renamed as the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill. The proposed legislation seeks to introduce structural reforms in India’s traditionally closed atomic energy sector by amending the Atomic Energy Act, 1962 and aligning it with prevailing global practices. A central objective of the Bill is to facilitate limited private and foreign participation in civil nuclear power generation.
The move is being viewed as a significant policy intervention aimed at strengthening India’s long-term energy security, meeting climate change commitments, and ensuring grid stability amid rising electricity demand.
Rationale for Reforming India’s Nuclear Sector
India’s energy transition has underscored the limitations of existing power generation strategies. Rapid expansion of renewable energy capacity, in the absence of adequate grid-scale energy storage, has contributed to increasing grid instability. At the same time, expansion of thermal power capacity has slowed due to environmental concerns, policy constraints, and political resistance to coal-based power generation. In this context, nuclear energy provides a reliable source of baseload power while also serving as a low-carbon alternative consistent with climate goals.
The renewed focus on nuclear reforms stems mainly from capital constraints rather than technological limitations. While India has developed mature nuclear capabilities, expanding nuclear capacity demands significant long-term investment. In this context, foreign sovereign wealth funds, particularly from West Asia, have shown interest in financing nuclear power projects in India.
The reforms also aim to unlock the long-pending commercial potential of the Indo–US Civil Nuclear Agreement, nearly two decades after its signing. The government is integrating these amendments into broader India–US trade and investment discussions, signalling a strategic shift in India’s nuclear engagement.
Key Provisions of the Atomic Energy Amendment Bill, 2025 (SHANTI Bill)
The Bill proposes to open India’s nuclear sector in a calibrated manner while retaining overall strategic control with the state. Key provisions include:
- Private companies may hold up to 49% minority equity in nuclear power projects.
- Entry of foreign entities is envisaged through partnerships, including those backed by global sovereign wealth funds.
The scope of private participation is proposed to be expanded beyond power generation to include:
- Exploration of atomic minerals
- Fuel fabrication activities
- Manufacturing of nuclear equipment
- Select components of nuclear plant operations
- Research and Development (R&D) in civil nuclear technologies, particularly Small Modular Reactors (SMRs)
SMRs are defined as nuclear fission reactors of less than 300 MW capacity, which are factory-built and transported to sites for installation, allowing faster and more flexible deployment.
Scaling Up Nuclear Capacity: India’s Long-Term Vision
India has set an ambitious target of achieving 100 GWe of nuclear power capacity by 2047, a substantial increase from the current level of approximately 8 GWe. In global terms, this would place India alongside major nuclear power producers such as the United States (around 100 GWe), France (approximately 65 GWe), and China (about 58 GWe).
To support this expansion, the government has announced a dedicated Nuclear Energy Mission, with a financial outlay of ₹20,000 crore for research and development in SMRs. The Mission aims to operationalise at least five indigenously developed SMRs by 2033, marking a major shift in India’s nuclear strategy.
Small Modular Reactors: A Strategic Shift
SMRs are emerging as a central pillar of India’s future nuclear roadmap. Their smaller size, modular construction, and reduced gestation periods make them suitable for a range of applications. SMRs are particularly well-suited for industrial decarbonisation, captive power supply for energy-intensive sectors such as data centres, steel, and cement, and for complementing renewable energy by providing carbon-neutral baseload power.
India’s indigenous SMR designs are being developed by the Bhabha Atomic Research Centre (BARC) and include:
- Bharat Small Reactor (BSR – 220 MWe), based on Pressurised Heavy Water Reactor (PHWR) technology
- Bharat Small Modular Reactor (BSMR – 200 MWe), based on Light Water Reactor (LWR) technology
- SMR-55 (55 MWe), also LWR-based
These designs are reported to be at advanced stages of development, with no foreign collaboration envisaged in the initial phase.
Private Sector Interest and Proposed Operational Model
Several major Indian corporations have expressed interest in participating in the SMR programme, including Reliance Industries, Tata Power, Adani Power, Hindalco, JSW Energy, and Jindal Steel & Power. The government has identified 16 potential sites across Gujarat, Madhya Pradesh, Odisha, Andhra Pradesh, Jharkhand, and Chhattisgarh for SMR deployment.
Under the proposed operational framework:
- The Nuclear Power Corporation of India Limited (NPCIL) will retain ownership and operational control of nuclear facilities.
- Private entities will finance the entire project lifecycle, including construction and decommissioning.
- In return, private investors will receive assured long-term captive power supply.
However, concerns have been raised regarding the ownership structure, cost recovery mechanisms, tariff determination, and the long-term commercial viability of such projects.
Nuclear Liability Law: A Critical Constraint
A major impediment to foreign participation remains the Civil Liability for Nuclear Damage Act, 2010 (CLNDA). The Act includes a provision for the “right of recourse”, enabling nuclear operators to seek compensation from equipment suppliers in the event of an accident. This provision has been consistently cited by foreign vendors such as Westinghouse and EDF/Areva as a significant investment deterrent.
To address these concerns, several workarounds are being explored, including:
- Capping supplier liability beyond a specified threshold
- Establishing a state-backed insurance mechanism or liability fund pool
- Aligning India’s liability framework with international nuclear liability conventions
Challenges and the Way Forward
- The proposed reforms have raised political and public concerns regarding nuclear safety. Strengthening independent nuclear regulatory oversight and promoting SMRs for controlled industrial use may help address safety and public acceptance issues.
- From the private sector perspective, clarity is required on risk-sharing arrangements, pricing, and long-term commercial returns. Strategically, the reforms also offer an opportunity to deepen nuclear cooperation with countries such as the United States, France, and Russia.
- India also faces scalability challenges due to its historically PHWR-dominated reactor fleet. A gradual transition towards globally prevalent LWR technologies, while retaining indigenous capabilities, will be essential.
- Crucially, any reform of nuclear liability provisions must ensure that victim compensation is not diluted, while also providing predictable and transparent regulatory frameworks to investors.
Conclusion
The Atomic Energy Amendment Bill, 2025 (SHANTI Bill) represents a significant departure from India’s long-standing state-centric nuclear policy. By moving towards a more open, investment-friendly, and climate-aligned framework, the Bill seeks to reposition nuclear energy as a key component of India’s energy transition. If implemented with adequate safeguards for safety, sovereignty, and accountability, the SHANTI Bill has the potential to become a foundational pillar of India’s energy security and net-zero strategy.
