SHANTI Act marks a significant policy shift and may prove a game-changer for India's nuclear energy sector
THE recently enacted SHANTI Act (Sustainable Harnessing and Advancement of Nuclear Energy Transforming India Act, 2025) is a game-changer for India’s nuclear energy sector. It allows foreign private entities to invest, marking a significant policy shift. The Act aims to boost nuclear capabilities, foster international collaboration, and accelerate advanced nuclear technology deployment. By facilitating private investment, it intends to improve energy security and support sustainable energy goals.
The initial legislative framework for atomic energy was established in 1948, but it remained largely inactive for many years. The scenario changed significantly in 1954 with a presidential directive that formally created the Department of Atomic Energy, placing it directly under the Prime Minister’s jurisdiction. The subsequent establishment of the Atomic Energy Commission in 1958, following another presidential order, marked a pivotal move in the institutional framework for nuclear governance. However, it wasn’t until 1962 that a robust and comprehensive legal regime was implemented in this sector.
Although India’s nuclear energy programme commenced in early 1950s, with significant progress made by 1962 when the Atomic Energy Act was enacted. This legislation mandated stringent confidentiality protocols and established that all nuclear operations would be under the exclusive oversight and regulatory control of the Central Government, ensuring that sensitive information and activities aligned with national interests and security considerations.
Prior to the Indo-US Nuclear Deal in 2008, this legislation was infrequently discussed in public forums, as advancements in the nuclear programme progressed predominantly out of the spotlight. In 1974, then Prime Minister Indira Gandhi garnered international attention by presiding over India’s inaugural nuclear test at Pokhran, titled “Smiling Buddha”. The advancement of India’s nuclear programme continued incrementally, culminating in a significant milestone in 1998 when a series of nuclear tests were conducted under the leadership of Prime Minister Atal Bihari Vajpayee as part of “Operation Shakti”.
This initiative was spearheaded by APJ Abdul Kalam, whose expertise was instrumental in establishing India’s missile development programmes. Due to his pivotal contributions to the country’s defence capabilities, he earned the sobriquet “Missile Man” and subsequently held the office of President of India from 2002 to 2007.
Public Engagement
Discussions surrounding India’s nuclear and foreign policy are predominantly confined to elite circles and decision-making bodies. Consequently, marginalised groups, including Dalits, tribal communities, and backward classes, often find themselves excluded from these critical dialogues. These communities, preoccupied with immediate socio-economic challenges and various forms of systemic discrimination, frequently lack the bandwidth to engage with policies that have far-reaching implications for the country’s trajectory. It is imperative to broaden the scope of discourse on these pivotal issues to facilitate greater public engagement and enhance understanding of national security and foreign policy among diverse segments of the population. Such inclusivity is essential for fostering informed decision-making that reflects the interests of all citizens.
Despite its significance, the SHANTI Act, passed on 17–18 December 2025, received minimal discussion in Parliament. Altogether both houses of Parliament debated this Act for hardly eight to nine hours, while a needless ‘Vande Mataram’ controversy consumed more than 20 hours of precious legislative time. The media also failed to generate any meaningful public discourse, treating the important law as a routine event even as this legislation carries deep historical significance and raises important concerns regarding internal security. Besides, it is closely linked to India’s foreign policy.
Indo–US Nuclear Deal
The 2008 Indo–US Nuclear Deal remains vivid in public memory. Despite lacking a thorough debate in Parliament, the deal faced significant public opposition, leading to a no-confidence motion against the Manmohan Singh government, which narrowly survived. Allegations emerged that considerable amount of money was spent to keep the government in power, with reports of ten BJP Members of Parliament voting in its favour. At that time, a critical question loomed: why was the United States so heavily invested in this agreement?
Once the agreement was approved, India was decisively admitted into the Nuclear Suppliers Group, a strategic move that enabled the United States and its allies to sell nuclear reactors and vital raw materials to India. This development received endorsement from international nuclear watchdogs, even though India has deliberately chosen not to sign the Nuclear Non-Proliferation Treaty (NPT). It is important to note that Israel, Pakistan, and South Sudan have also refrained from signing the treaty, enabling them to develop nuclear weapons without requiring international consent.
In Asia, North Korea’s withdrawal from the NPT and Iran’s ongoing threats to do the same are critical factors in this context. Today, India and Pakistan are recognised nuclear powers, while Israel, although widely believed to possess nuclear weapons, has never formally acknowledged it. Against this backdrop, global acceptance and commendation of India’s nuclear programme became an undeniable reality only after the transformative 2008 deal.
In 2010, India enacted a law that placed full liability for nuclear accidents on the companies operating nuclear facilities. In 2016, another significant piece of legislation granted the United States the authority to station its military aircraft in India. This arrangement allowed for maintenance, spare part replacements, and refuelling without any set time limit, provided that any permanent US military base is not allowed. No other country enjoys such extensive privileges in India or operates under such relaxed conditions.
Liability Law
The SHANTI Act effectively dismantles the 2010 liability law and significantly undermines the original Atomic Energy Act of 1962. Consequently, regulatory bodies and the Atomic Energy Commission have become largely ineffective. Domestic and international private companies are now allowed to establish nuclear facilities, generate electricity, and sell it to the government at prices they set. The government will provide small-scale Modular indigenous reactors (SMR); however, in the event of an accident or technical failure, the liability of these companies will be substantially limited. Compensation for such incidents is capped at a maximum of ₹3,000 crore, depending on the size of the company involved.
The imposition of a liability cap is deeply concerning, especially given the severe consequences associated with nuclear incidents. The 1986 Chernobyl disaster in Ukraine resulted in an estimated economic impact of approximately $700 billion and had far-reaching effects on nearly half a million residents within a 30-km radius. Compared to a liability cap of ₹3,000 crore, this amount is almost negligible. Furthermore, the 1984 Bhopal gas tragedy serves as a stark reminder of the systemic neglect experienced by victims once corporate interests are prioritised and financial settlements are finalised.
Energy Demands
The government argues that this legislation is essential to meet India’s growing energy demands. At present, India generates less than nine gigawatts of nuclear power, aiming to increase this capacity to 100 gigawatts by 2030. However, the country’s total electricity requirement is approximately 476 gigawatts, meaning nuclear energy currently accounts for less than two per cent of the overall energy mix. Most electricity is still produced from coal (thermal energy), followed by hydropower, solar energy, and wind power. Even if the ambitious target is achieved, nuclear power would account for less than ten per cent of total energy demand. It is unlikely that reliance on coal will decrease significantly while renewable energy development still remains at its infancy.
Current estimates suggest that India’s nuclear expansion will require an investment of about $126 billion. The Adani Group is aspiring to invest around $60 billion, leveraging foreign partnerships mainly from the United States. Other major companies, such as Jindal, Reliance and Tata, are also expected to increase their investments through various international collaborations.
This evolution prompts critical inquiries regarding the underlying motivations for these expansive initiatives. Are they fundamentally designed to address escalating energy demands, or do they signal more profound political and strategic ambitions?
Security Dynamics
India’s role as a primary ally of the United States and Europe in the Asian geopolitical landscape is particularly noteworthy, given the strategic geographic position that insulates it from prominent adversarial states like China and Russia. India’s proximity to multiple Muslim-majority countries, including Pakistan, Afghanistan, Iran, the Arabs and Gulf states, and Turkey, adds layers of complexity to its security dynamics.
For several decades, the US Department of Defence has advocated for India to deepen its dependence on American military and strategic support, particularly concerning internal security frameworks. This trend has amplified significantly since the 1990s, aligning with broader US strategic imperatives in the region.
This evolving relationship necessitates a thorough and critical evaluation of India’s alignment with US strategic objectives, especially in the context of countering Chinese influence. The pivotal inquiry emerges: does this strategic alignment truly propel India’s long-term national interests, or does it potentially jeopardies its autonomy and regional equilibrium?
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Dr Tasleem Ahmad Rehmani is president of Muslim Political Council of India and a prominent political analyst. The views expressed here are the author’s own and Clarion India does not necessarily subscribe to them.
