India’s Department of Atomic Energy (DAE) has released draft rules relating to the 2025 Sustainable Harnessing & Advancement of Nuclear Energy (SHANTI) Act, which enables wider participation of private entities in nuclear power and other permitted nuclear activities under regulatory oversight. The draft rules establish a strict legal framework for nuclear liability, private sector integration, and long-term financial safety. DAE has invited comments and suggestions on the draft rules to be submitted by 4 September.
This regulatory overhaul aims support India’s target of achieving 100 GWe of nuclear power capacity by 2047 by encouraging domestic private investment. The rules lay out the regulatory framework for a wider nuclear power ecosystem, including private participation, captive nuclear generation, foreign reactor technology, licensing, safety oversight and nuclear liability. They introduce a modern “insurance-plus-fund” liability model and a single-window “composite licence” to replace old, complex regulatory hurdles.
Foreign nuclear technology sourced for a nuclear power plant or reactor must have its design certified or approved by the regulatory body in its country of origin and must already be operational there or in another foreign country. The rules define “the country of origin” as those countries which are self-reliant in nuclear reactor design and supply chain ecosystem whose regulatory approvals are trusted globally.
Technology providers must ensure availability of design support and all necessary permissions and supporting documents from the original technology developer unless there has been a complete transfer of technology. Otherwise, the person sourcing the technology must “ensure that all related Intellectual Property Rights vests with the technology developer”.
A key provision is the proposed “in-principle approval”, which the licensing authority may grant after admitting an application where the applicant has not yet selected a site or reactor technology. The draft defines it as a “statement of support to proceed towards applying for formal licence”, subject to specified conditions. “Upon receipt of a valid ‘in-principle approval’, the applicant may proceed with negotiation with reactor technology vendors and for acquiring the land and other necessary infrastructure,” the draft rules state.
However, the approval is not equivalent to a final licence. Moreover, an in-principle approval can be revoked if there is a supervening public interest or if material facts emerge indicating that the applicant is owned, controlled or dominated by entities considered inimical to defence and national security or public health and safety. It can also be revoked if obtained through misrepresentation or suppression of material facts.
On nuclear liability, operators would be required to maintain insurance or financial security for nuclear damage, with the financial security remaining in place until all used fuel is removed from the relevant storage pool. The draft also provides for a Nuclear Liability Fund, to be financed through a levy on operators. For specified government-owned installations, the Central Government would assume liability under the conditions set out in the rules.
Nuclear plant operators need to maintain an insurance policy, financial security or a combination of both for nuclear damage. According to the draft rules, the Centre every five years must constitute a group of experts to review the maximum limits of an operator’s civil liability for nuclear damage.
The draft rules provide for a single composite licence for building, owning, operating and decommissioning a nuclear power plant or reactor. “No licence shall be applied for, granted, divided, or severed … in respect of any of those activities separately,” the draft rules say. The composite licence streamlines development by bundling several project phases – including construction, ownership, operation, and decommissioning – into a single regulatory permission. This change is intended to help private financiers predict project timelines more accurately.
On tariffs, the rules alter the pricing and economic architecture of nuclear energy generation to incentivise heavy private balance sheets. Industrial users forming joint ventures or building dedicated installations – such as data centres, AI clusters, semiconductor fabs, and aluminium smelters – can consume self-generated nuclear baseload power directly. This effectively bypasses public grid tariff volatility.
However, the general issue of tariffs is still being debated. According to the draft rules, the Chairperson of the Central Electricity Authority is to be present in all review matters related to nuclear power tariff for the private operators. A Committee constituted by the Central Government will decide the norms and mechanisms for fixation of the tariff for supply of nuclear electricity from the NPPs set up by private players.
Tariffs of nuclear power generated by existing plants are decided by DAE along with the Central Electricity Authority. Tariffs for all other power generators fall under the jurisdiction of the Central Electricity Regulatory Commission (CERC). The Ministry of Power has been seeking control over tariff decisions for nuclear power by private players.
There has been growing demand from the industry to have freedom in deciding the tariff for the sale of nuclear power. Most players are saying the developer should have the freedom to the sale/use/supply of electricity generated as per the Electricity Act 2003 insisting that no DAE approval is required.
Meanwhile, Prime Minister Narendra Modi has said India aims to operationalise five new nuclear reactors during this decade as part of efforts to strengthen energy security and meet the 100 GWe target.
“Energy security is the demand of the time. With the SHANTI Act passed in Parliament, we have created the framework to achieve our goal. Our goal is to achieve 100 gigawatts of nuclear power capacity. We aim to start five new nuclear reactors in this decade,” he said.
He stressed the need for India to reduce dependence on other countries and strengthen domestic capabilities in line with the vision of an Atmanirbhar Bharat (Self-Reliant India) – the overarching economic vision driving India’s domestic manufacturing, energy security, and industrial localisation.
“It is our conviction that India must not be dependent on other countries. We must become self-reliant. We have to strengthen our capabilities and protect our national interests,” he said.
