The Department of Atomic Energy has released draft regulations under the SHANTI Act, 2025, requiring nuclear plant operators to maintain insurance against potential damage. This change supports the government’s plan to open the nuclear sector to private companies, ending the state-led monopoly. Investors may now monitor how these long-term liability costs influence the financial feasibility of nuclear projects for new private entrants.
The Department of Atomic Energy has released new draft regulations under the Sustainable Harnessing and Advancement of Nuclear Energy (SHANTI) Act, 2025. These rules introduce a significant structural change in the Indian nuclear sector by mandating that all plant operators must secure continuous insurance or financial protection against potential nuclear damage. This coverage is required to remain in force throughout the operational life of the plant and must continue until all spent nuclear fuel is safely removed from storage pools.
This move marks a shift from the traditional state-led model, where nuclear power generation was solely the domain of public sector entities like the Nuclear Power Corporation of India (NPCIL). The SHANTI Act is designed to encourage private sector participation to help reach the country's capacity targets. For companies considering entry into this capital-intensive sector, these rules establish the framework for financial responsibility and safety compliance.
Simplifying the Licensing Process
To attract private capital, the government has introduced a streamlined licensing framework. Applicants can now receive "in-principle approval" before finalizing specific sites or technology providers. This allows companies to begin preliminary negotiations and land acquisition with more certainty. Furthermore, the draft rules replace the multi-stage licensing process with a single, composite license. This license covers the entire lifecycle of a nuclear facility—from construction and ownership to operation and eventual decommissioning. While this simplifies the regulatory process, it also means that a private operator takes on the full responsibility for the project's entire lifespan, from start to finish.
Financial and Operational Implications
For potential investors, the requirement for insurance and periodic liability reviews introduces new cost variables. The draft rules propose that a group of experts will review the maximum civil liability limit every five years. This periodic adjustment means that operators must be prepared for potential changes in their financial obligations over time. Additionally, any foreign reactor designs used in India must be certified by the regulatory body in their country of origin. This ensures that only proven technologies with established safety track records are deployed.
While the prospect of private participation creates new opportunities for engineering, procurement, and construction companies, the sector remains complex. The financial risks involve the high capital required for initial setup, the long gestation periods typical of nuclear energy, and the long-term obligation to manage insurance costs and spent fuel storage. Investors may follow the finalization of these rules and the subsequent response from private utilities and manufacturers, as these will determine the speed at which private investment enters the nuclear energy market.