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Introduction
India's energy market is poised for significant growth, with clean energy playing a pivotal role in meeting rising demand and achieving decarbonization goals. Globally, nuclear energy is recognized as a clean and green source of electricity. However, India's existing framework under the Atomic Energy Act, 1962 (AEA) and the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) had notable gaps, including weak safety mandates, limited regulatory capacity, and lack of proactive measures to accelerate nuclear sector growth.
The new reform aims to revive long-stalled nuclear projects involving foreign partners such as Westinghouse (U.S.) and EDF (France). It will also advance India's clean energy targets through Bharat Small Reactors (BSR), Small Modular Reactors (SMR), and large-capacity nuclear plants with private participation. This article highlights the differences between the old and new nuclear regimes.
Limitations of the Existing Regime
India's nuclear power program was governed by the AEA, which provided the legal framework for atomic energy development for peaceful purposes. However, the AEA restricted nuclear activities to the Central Government and its entities such as Nuclear Power Corporation of India Limited (NPCIL), Nuclear Fuel Complex (NFC), and Atomic Mineral Division (AMD).
The Atomic Energy Regulatory Board (AERB) was created by an executive order under the AEA, lacking statutory status and comprehensive safety coverage across the nuclear lifecycle. Regulatory independence was not ensured.
The CLNDA, introduced separately, defined liability and compensation for nuclear accidents. Although based on the Convention on Supplementary Compensation (CSC), 1997, it was not fully aligned with global norms. India ratified CSC in 2016 and adheres to principles of the Vienna Convention (1963), Paris Convention (1960), and Brussels Supplementary Convention (1963). Misalignment with CSC norms limited India's ability to access additional funds under the CSC mechanism.
Operator's Liability under CLNDA, 2010
The CLNDA imposed strict, no-fault liability on operators, capped at USD 225 million (approximately INR 1,500 crore) per incident. If claims exceeded this amount, the Indian Government assumed responsibility, capped at 300 million SDRs (approximately INR 2,100–2,300 crore). The CLNDA also established a Nuclear Damage Claims Commission for fair compensation and dispute resolution.
Supplier's Liability under CLNDA, 2010
Unlike global frameworks such as CSC, India's CLNDA introduced supplier liability under Section 17(b), allowing operators to seek recourse against suppliers for defective equipment or sub-standard services. This provision, along with Section 46, which allowed proceedings under other laws, raised concerns about unlimited liability and discouraged foreign participation.
Convention on Supplementary Compensation for Nuclear Damage (CSC), 1997
The CSC, established under the IAEA, created a global liability regime for civil nuclear damage and supplemented national mechanisms with additional funds for major accidents. Membership is open to IAEA states and parties to the Vienna or Paris Conventions. Non-party states like India can join if their national laws align with CSC principles.
Key Concerns with CLNDA
Sections 17(b) and 46 of CLNDA created ambiguity around supplier liability, deterring foreign and private participation in India's nuclear sector. These provisions were seen as obstacles to implementing nuclear deals with countries like the U.S. and France.
Reform in the Form of SHANTI Act, 2025 – A Structural Shift
The SHANTI Bill, 2025 introduces a single comprehensive law consolidating regulation, enforcement, civil liability, and dispute resolution. Key features of new law include:
- Expanded Participation: Allows government companies, private firms, and joint ventures to build, operate, and decommission nuclear plants.
- Clear Licensing Regime: Defines eligibility for nuclear facility operations.
- Safety in Core Functions: Fuel enrichment and spent fuel reprocessing remain under exclusive government control.
- Statutory Status for AERB: Grants independent authority for inspections and enforcement.
- Liability Framework: Caps government liability at 300 million SDRs, with operator liability based on reactor capacity.
- Alignment with Global Norms: Removes operators' right to recourse against suppliers, aligning with CSC principles.
- Lifecycle Safety Oversight: Embeds continuous safety compliance across the facility lifecycle.
- Claims Mechanism: Establishes two different claim mechanisms, one by Nuclear Damage Claims Commissioner and other by Nuclear Damage Claims Commissions jurisdiction of each based on the value of claims for speedy and fair compensation.
Conclusion
The SHANTI Bill aligns India's nuclear liability regime with global norms, easing supplier concerns while ensuring fair victim compensation. It positions India to revive stalled nuclear projects, attract foreign and private investment, and advance clean energy goals. By granting statutory status to the regulator and prioritizing safety, the reform strengthens accountability and accelerates nuclear sector growth.
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