Making the SHANTI Act deliver

This article is authored by Amit Kapur and Sugandha Somani Gopal, partners, JSA Advocates & Solicitors.

The enactment of the Sustainable Harnessing and Advancement of Nuclear Technology for India Act, 2025 (“Act”), marks a definitive step towards repositioning nuclear energy as a credible pillar of India’s energy security and energy transition paradigm. The Act provides a comprehensive framework for opening the sector to private sector participation, modernizing regulatory processes, and fostering research and technology adoption. Yet enacting the law is only the beginning. The true test lies in is implementation--how its legislative intent is translated into operational reality.

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We attempt here the critical implementation imperatives to catalyse India’s nuclear sector.

An immediate task is the framing of robust yet nimble subordinate legislation to govern licensing procedures, safety standards, siting and design norms, waste management, decommissioning, emergency response and claims processes. Robust rules governing eligibility conditions, approval timelines and tariff principles would help mitigate risks relating to regulatory uncertainty for investors, technology providers and lenders while signalling seriousness about safety and accountability. Yet, they must remain adaptable to evolving technological and geopolitical realities.

Equally important is strengthening the nuclear regulatory architecture. The entry of diverse reactor designs and private operators amplifies regulatory complexity and calls for deeper technical capacity, stronger institutional independence and internationally benchmarked standards. Given the economic and technical complexity of nuclear tariffs, the proposed Atomic Energy Redressal Advisory Council (AERAC), tasked with reviewing tariff-related grievances should have multidisciplinary expertise spanning engineering, finance, economics and law--with an in-built R&D perspective in its DNA. The regulatory architecture must also systematically capture and retain institutional memory through standardised processes, documented precedents, and transparent decision-making, which will reduce interpretational variability, enhance policy certainty.

The SHANTI Act seeks to rebalance civil nuclear liability in line with international norms, and its success will depend on clear operational guidance. Liability caps, recourse mechanisms, indemnities, insurance pools and sovereign backstops must be unambiguously defined. For liability caps to be functional, the Indian Nuclear Insurance Pool must expand its offerings to provide graded products for different reactor sizes—from Small Modular Reactors to large nuclear plants. Risk allocation in standard contracts must recognise the distinction between the nuclear island and the conventional island. A calibrated approach, supported by deeper liability insurance markets, will be essential to attract credible private players across the value chain.

Nuclear power projects are characterised by high upfront costs, long construction periods and extended payback horizons. Addressing these challenges requires moving from ad hoc structuring to standardised, financeable models. Well-designed EPC contracts, backed by completion guarantees and milestone-linked payments, can mitigate construction risk, while long-term fuel supply and O&M arrangements stabilise operating costs. On the revenue side, projects require long-term visibility—often spanning decades—through long-term power purchase agreements, tariff stabilisation mechanisms or regulated asset base-type models that allow cost recovery during construction and early operations. Recognising the grid-stabilising role of nuclear power, including ancillary services, will further support bankability.

Given their capital-intensive and long-gestation nature, nuclear projects require financing innovation beyond traditional project finance. Viability gap funding, capital grants and blended finance structures can bridge affordability constraints alongside private capital. Patient long-term investors—such as pension funds, insurance companies and sovereign wealth funds—will be critical, as will long-tenor debt from development finance institutions and export credit agencies. Positioning nuclear energy within climate finance and energy transition frameworks could further enhance bankability. Recognition as a low-carbon or transition technology would enable access to green or transition-linked finance, lower the cost of capital and broaden the investor base.

Integration of nuclear expansion with power markets and energy planning will be critical. Nuclear power’s role in providing baseload supply, grid stability and complementarity with renewables must be reflected in market design and tariff structures. Tariff frameworks must accommodate its long capital recovery period while recognising the ancillary services and grid support it provides. Deliberate market integration will be key to commercial viability.

The Act’s emphasis on advanced technologies, including Small Modular Reactors, also demands attention to technology readiness and indigenous capability building. A regulatory sandbox—a supervised, time-bound framework allowing pilot-scale deployment of emerging technologies—would enable policymakers to test new licensing norms, liability structures and public-private partnership formats with calibrated risk, generate operational and safety learnings, and progressively evolve a fit-for-purpose regulatory architecture. Parallel investments in domestic manufacturing, skills development and research collaboration will be essential to reduce long-term costs and strengthen energy security.

Institutional coordination between the Centre and states will be key to seamless rollout. Nuclear projects intersect with land, water, environmental approvals and local governance—domains where states play a decisive role. Single-window clearances, facilitation cells and early stakeholder engagement can minimise delays and build local acceptance.

The SHANTI Act offers India a strategic opportunity to anchor nuclear energy within its clean energy and industrial policy framework. Well-orchestrated execution—grounded in regulatory clarity, institutional credibility, financial innovation and market integration—can light up a new phase in India’s energy transition and decarbonisation journey.

This article is authored by Amit Kapur and Sugandha Somani Gopal, partners, JSA Advocates & Solicitors.