India’s energy future received a key policy fillip with the passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill. This landmark legislation, enacted in 2025, thoroughly overhauls the nation’s nuclear governance by subjecting the entire value chain-from power generation to fuel-cycle services-to private participation for the first time. In so doing, the bill also recalibrates liability provisions, its motivation an attempt to assuage foreign suppliers and investors that had shied away from the sector.
The Global Push for Nuclear Power:
Nuclear energy is re-emerging as an indispensable part of the clean energy transition as nations race to slash greenhouse gas emissions and fight global warming. Today, nuclear power supplies around 9% of the world’s electricity and remains the world’s second-largest source of low-emissions power after hydropower. Its key advantage lies in its capacity for round-the-clock operation, delivering stable, carbon-free electricity and heat. Its consistent output makes it a vital complement to variable renewables like wind and solar, especially with grid stability a growing concern amidst the rising share of intermittent sources.
The International Energy Agency has forecast that the world’s nuclear electricity output in 2050 must be close to doubling in order to support the goal of achieving a net-zero emissions position. This means a huge increase from the level of some 2,700TWh registered in the year 2022 to a level of 6,000TWh in 2050.
India’s Ambition Meets Capital Reality
Despite this global shift, growth in the nuclear capacity in India remains stagnated. The nuclear capacity in India has only marginally improved from 4.8 GW as of March 2014 to 8.2 GW as of March 2024, mainly due to restrictive legislative policies adopted in the past. The Atomic Energy Act, 1962, essentially categorized nuclear activities in India as a domain exclusively within the public domain, whereas The Civil Liability for Nuclear Damage Act, 2010, set strict liability norms that had a negative impact on foreign suppliers of nuclear technology. Nuclear projects have inherently high capital and gestation costs. Construction durations globally average seven years and sometimes exceed ten years, in sharp contrast with two- and four-year timelines for solar and wind energy plants. This high gestation period with no revenue generation poses funding difficulties for the private sector that has short-term perspectives.
Navigating the Challenges Ahead:
The SHANTI Bill seeks to change the course by leveraging more capital and technology. But there are challenges that could impede a successful implementation of the bill. Besides changes in the regulatory framework, the success of the bill will depend on securing public support for nuclear energy, regulatory commitment, and institutional support. The dominance of public sector companies such as the Nuclear Power Corporation of India Limited (NPCIL) in the handling of the challenges and safety aspects could create a distinct environment for the newcomers.
The 360° Investment Outlook:
Bullish Case: The move brings India in line with the international community on the issue of achieving a net-zero future, meeting the key requirement concerning the need for a stable source of low-carbon electricity that can complement the fast-growing renewable energy sector. The involvement of private investment could lead to faster capacity expansion and innovation.
Bearish Case: Nuclear projects face immense capital intensity, long lead times, significant cost overrun risks, and stringent safety regulations. Private investors might remain wary of these prolonged risks and complex regulatory environments, despite eased liability provisions. Public perception and potential community opposition can also derail projects.
Skeptical View: While the policy is progressive, the actual implementation will be complex. Attracting sufficient private capital will require more than just legislative changes; it will depend on detailed regulatory frameworks, effective risk-sharing mechanisms, and demonstrating a clear path to profitability and timely project completion.
Data-Driven Insights: India’s current nuclear share (around 3%) lags behind global leaders like France (65%) and China (poised to overtake the US in capacity by 2030). The SHANTI Bill seeks to bridge this gap, but the long construction timelines and capital demands mean visible impact on the energy mix will take years.
