India’s recent legislative changes are poised to dramatically reshape its energy landscape, opening the door to private and foreign investment in nuclear power generation. This landmark decision, approved by Parliament last week, signals a significant shift in government policy as the nation strives to increase its nuclear energy capacity and reduce its reliance on fossil fuels to meet ambitious climate goals. The move aims to unlock the substantial investment needed to achieve a tenfold increase in nuclear power, a critical step towards carbon neutrality.
A Transformational Moment for India’s Energy Sector
Prime Minister Narendra Modi hailed the new Atomic Energy Act as a “transformational moment” for India’s technology sector, emphasizing the “numerous opportunities” it creates for the private sector. Currently, India’s nuclear power capacity stands at around 7 gigawatts. The government’s ambitious target is to boost this to 100 gigawatts by 2047 – enough to power nearly 60 million homes annually and a cornerstone of its commitment to achieving net-zero emissions by 2070.
Reaching this goal requires an estimated 20 trillion Indian rupees (approximately $226 billion or €193 billion) in investment, a figure the government hopes to attract through private participation. Major Indian conglomerates, including Tata Power, Adani Power, and Reliance Industries, have already expressed keen interest in entering the previously tightly controlled civil nuclear power sector. This represents a fundamental change in how India approaches its energy future.
Unlocking Investment: The SHANTI Act and Foreign Participation
The legislation, officially dubbed “SHANTI” (Sustainable Harnessing of Advancement of Nuclear Energy for Transforming India), removes legal barriers that have historically hindered foreign involvement. Previously, companies from the US and France, in particular, were effectively excluded due to liability concerns. The new act aligns India’s nuclear liability framework more closely with international norms, making it more attractive to international investors.
Ajay Bisaria, a former Indian envoy to Pakistan, explained that this reform moves India-US nuclear cooperation “from political signaling to commercial reality.” He anticipates that joint statements regarding large reactors and Small Modular Reactors (SMRs) can now translate into concrete projects, further bolstered by anticipated improvements in Indo-US relations in 2026. However, he also cautioned about potential hurdles, including licensing timelines, localization requirements, and nuclear material safeguards.
Concerns and Challenges: Safety, Liability, and Oversight
While the government is optimistic, the reform hasn’t been without its critics. Experts have raised concerns about potential challenges related to liability caps, regulatory oversight, and maintaining stringent safety standards. The scale of potential accidents, as demonstrated by disasters like Fukushima and Chernobyl, raises questions about the adequacy of the proposed liability limit of 15 billion Indian rupees ($168 million, €143 million).
Opposition parties have also alleged that the legislation was expedited to accommodate US demands, pointing to the recent US National Defense Authorization Act (NDAA) which mandates a joint US-India consultative mechanism to align New Delhi’s nuclear liability rules. Jairam Ramesh, a senior member of the Indian National Congress party, claims recent changes were specifically designed to meet US interests.
Balancing Growth with Responsible Nuclear Energy
Despite these concerns, many believe the policy shift is a necessary step to unlock private investment. Sameer Patil, director of the security, strategy and technology center at the Observer Research Foundation, argues that it’s a crucial structural reform. However, he acknowledges the challenges, particularly the lack of a robust indigenous fuel supply, which could leave India vulnerable to geopolitical pressures. He also frames the debate around safety as a “trade-off between incentivizing commercial participation and imposing reasonable safeguards.”
A government official, speaking anonymously, expressed skepticism about the private sector’s long-term commitment, citing a history of abandoning capital-intensive, high-risk ventures. This highlights the need for careful monitoring and robust regulatory frameworks to ensure sustained investment in nuclear power.
Supply Chain and Implementation Hurdles
Beyond financial and regulatory concerns, significant implementation challenges remain. Anil Wadhwa, a former diplomat specializing in nuclear issues, points to issues with domestic uranium quality, a shortage of skilled workers, and insufficient manufacturing capacity for reactor components. He emphasizes the ongoing debate surrounding liability caps, the independence of the Atomic Energy Regulatory Board, and the crucial balance between commercial incentives and safety.
The previous Civil Liability for Nuclear Damage Act (CLNDA) of 2010, which allowed operators to sue suppliers for defects, differed from global norms. The new legislation aligns India more closely with international standards, capping foreign ownership at 49% while establishing pathways for participation that didn’t exist before. This represents a significant step forward, but successful implementation will be key to realizing India’s ambitious nuclear energy goals.
In conclusion, India’s decision to open its nuclear power sector to private and foreign investment is a bold move with the potential to significantly accelerate its transition to a cleaner energy future. While legitimate concerns regarding safety, liability, and implementation remain, the government is confident that the benefits of increased capacity and reduced reliance on fossil fuels outweigh the risks. The success of this ambitious undertaking will depend on careful planning, robust regulation, and sustained commitment from both the public and private sectors. The coming years will be crucial in determining whether India can successfully harness the power of nuclear energy to achieve its climate targets and secure its energy future.
