India has taken its biggest step in decades towards reshaping its nuclear power industry, with the Lok Sabha passing legislation that allows private Indian companies to build and operate nuclear plants for the first time.
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (Shanti) Bill, 2025 seeks to dismantle the legal framework that has kept nuclear power firmly under state control since the early years of the atomic programme. The government argues the shift is essential to scale clean, reliable power. Critics say it raises unresolved questions around safety, accountability and risk.
A single law for a closed sector
If enacted, the Bill will repeal the Atomic Energy Act of 1962 and the Civil Liability for Nuclear Damage Act of 2010, replacing them with a single, consolidated statute governing nuclear power generation, safety regulation, liability and compensation.
The law also covers non-power uses of nuclear and ionising radiation, including medical, industrial and research applications, reflecting the government’s push to expand nuclear technology beyond electricity.
Private entry, but not foreign control
The most consequential change is the end of the Nuclear Power Corporation of India’s effective monopoly over power generation.
Under the Bill, Indian private companies and Indian-incorporated joint ventures may apply for licences to build, own, operate and decommission nuclear power plants, subject to approval by the central government.
However, the opening stops short of allowing foreign control. Companies incorporated outside India, or controlled by foreign entities, are barred from holding nuclear operating licences. Foreign firms may participate only as technology partners, suppliers or service providers, working within Indian entities.
This structure reflects the government’s attempt to attract global expertise without ceding ownership of critical infrastructure. Reuters has previously reported that supplier liability and ownership restrictions were among the biggest deterrents for international nuclear vendors.
Liability rules rewritten
One of the Bill’s most debated provisions is its rewriting of nuclear liability rules.
The legislation retains no-fault liability, meaning victims of a nuclear incident do not need to prove negligence to claim compensation. Primary liability continues to rest with the operator, within limits set out in the law, with the central government stepping in beyond those caps in specified circumstances.
What changes materially is the removal of statutory supplier liability, introduced in 2010. Operators may now seek compensation from suppliers only if such rights are explicitly written into contracts or if damage results from a deliberate act.
Supporters argue this aligns India with international practice and makes projects bankable. Opponents say it weakens accountability in a high-risk sector.
Regulator strengthened, scrutiny questioned
The Bill gives statutory status to the Atomic Energy Regulatory Board (AERB), which until now has operated under executive authority.
The regulator will be empowered to set safety standards, issue authorisations, conduct inspections and suspend or cancel licences. Disputes would pass through a proposed Atomic Energy Redressal Advisory Council, with appeals ultimately reaching the Supreme Court.
Opposition lawmakers questioned whether the regulator would be sufficiently independent at a time when the government is also pushing rapid expansion.
Ministers have linked the reform to India’s broader climate and energy goals. Nuclear power currently contributes around 3% of India’s electricity, with just under 9 GW of installed capacity. The government has signalled ambitions to scale this sharply over the coming decades, alongside renewables, to ensure stable baseload power.
Speaking in Parliament, minister of state Jitendra Singh described the Bill as a “historic” step that would reduce reliance on fossil fuels and support India’s net-zero by 2070 target.
The opposition has been unconvinced. MP Shashi Tharoor warned during the debate that the Bill represented a “dangerous leap into privatised nuclear expansion”, arguing that commercial interests must not override public safety or environmental protection.
Others raised concerns over liability caps, regulatory independence and the pace at which private participation is being introduced.
What comes next
The Bill must still pass the Rajya Sabha before becoming law. Even then, much will depend on how licences are issued, how liability limits are enforced and whether the regulator can manage a more complex ecosystem of operators.
For investors, the message is cautiously clear: India is opening the door to private nuclear power — but on its own terms. For policymakers, the challenge will be proving that expansion and safety can move in step.