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The Lower House of the Indian Parliament, the Lok Sabha, yesterday passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025 (the SHANTI Bill) with the intent to consolidate the legal framework governing civil nuclear activities in India. The Bill is slated for discussions before the Rajya Sabha today.
You can access the Bill here.
What the Bill Proposes: Notably, the SHANTI Bill addresses some important aspects of nuclear power generation in India:
- Comprehensive legal framework: It consolidates the regulatory framework under one legislation, proposing to repeal the Atomic Energy Act, 1962 (the AEA) and the Civil Liability for Nuclear Damage Act, 2010 (the CLND Act).
- AERB: It grants a statutory status to the Atomic Energy Regulatory Board, which till now functioned under an executive order.
- Private sector participation: The nuclear power sector, thus far reserved only for the central government and government owned companies, namely Nuclear Power Corporation of India Limited has been opened up to the private sector, with Indian companies being allowed to procure licenses to operate nuclear installations.
- Graded liability limits for Operators: The SHANTI Bill Operator liability introduces graded liability caps linked to the size and category of nuclear installations, with higher limits specified for larger reactors. As proposed, the liability caps are as follows:
|
Category of Nuclear Installation |
Limit of operator's liability |
|
Reactors having thermal power above 3600 MW |
INR 3000 Crores/340 Million USD |
|
Reactors having thermal power above 1500 MW and up to 3600 MW |
INR 1500 Crores/170 Million USD |
|
Reactors having thermal power above 750 MW and up to 1500 MW |
INR 750 Crores/85 Million USD |
|
Reactors having thermal power above 150 MW and up to 750 MW |
INR 300 Crores/34 Million USD |
|
Reactors having thermal power up to 150 MW, fuel cycle facilities other than spent fuel reprocessing plants and transportation of nuclear materials |
INR 100 Crores/11 Million USD |
- Supplier Liability: the SHANTI Bill proposes
two major deviations from the CLND Act:
- It omits the statutory "right of recourse" against suppliers that existed under the CLND Act and the Civil Liability for Nuclear Damage Rules, 2011 (CLND Rules) and retains only the Operators right of recourse in instances where there is either an express provision to this effect in a written contract or where the nuclear incident occurs as a result of intentional omission/commission of an inpidual.
- Unlike the CLND Act which preserved the operator's potential liabilities under other applicable laws, lending credibility to the argument that the supplier liability may, in effect, not be limited, the SHANTI Bill purports to override all other enactments.
What this means for Foreign Investors and Suppliers:
- Investors: While theSHANTI Bill does allow for private participation in nuclear power generation, the Indian foreign exchange control regulations currently prohibit any foreign investment in atomic energy. Requisite amendments to these laws will have to be enacted before foreign investors can invest in this sector.
- Suppliers: While prima facie the SHANTI Bill purports to address supplier concerns relating to unlimited exposure for nuclear incidents, a comprehensive review of the Bill as passed by the Rajya Sabha and assented to by the President of India and the operational provisions of the yet to be formulated rules would need to be undertaken to determine whether the SHANTI Bill adequately addresses concerns around supplier liability
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