What structural changes does the SHANTI Act introduce?
The SHANTI Act marks a significant legislative shift, though it remains to be fully operationalised through detailed rules and implementation frameworks.
“In many ways, it seeks to do for the nuclear sector what India undertook in the infrastructure space in the late 1990s and early 2000s, a transition from a wholly state-driven model to a more structured, rules-based framework capable of supporting scale and attracting private investment,” says Hemant Sahai, founding partner at HSA Advocates.
One of the most important structural changes is a two-step approval process. “First, a licence from the Central Government to undertake specified activities in the nuclear sector, and second, a separate safety authorisation from the regulator,” Sahai explains. “From a project structuring standpoint, this separation introduces a degree of discipline and accountability that lenders and investors typically look for.”
On liability, the act introduces a tiered structure. “At the first tier, liability is channelled exclusively to the operator, with caps linked to the size and capacity of the nuclear installation, ranging from one billion rupees ($10.7 million) for smaller facilities to 30 billion rupees for large reactors,” he explains. Beyond that, the Central Government assumes responsibility for additional compensation up to a defined statutory ceiling, with a third layer accessible through mechanisms such as a Nuclear Liability Fund.
“Overall, the framework retains a significant role for the Government, but it is now far more structured and predictable, which is what ultimately drives investments,” he notes.