INDIAN GOVT. OPENS UP NUCLEUR SECTOR FOR PRIVATE PLAYERS - Atomic Energy Bill 2025
For the past 60 years, the nuclear sector in India has been a government monopoly. Private players were only allowed to manufacture equipment; they could never open a nuclear plant, hold nuclear fuel, or operate in the field of nuclear reactors. The Shanti Bill, passed in the Winter Session, shifts the nuclear sector from the strict state control that has existed since 1962.
Nuclear energy has always been seen as a source of fear and anxiety in India. Any government trying to open up the nuclear sector inevitably faces deep-rooted public and political concerns around safety and national security.
India passed the Atomic Energy Act in 1962 during the Cold War. Under this Act, only the government could mine uranium, process it, enrich it, build reactors, and handle nuclear fuel. Private companies were allowed to participate only as contractors. For example, L&T manufactured pressure vessels, Godrej made other components, and similar companies supplied equipment. They built components, got paid, and that was the extent of their involvement. Ownership and control always remained with the government.
After India’s nuclear test in 1974, the world stopped supplying uranium and reactor technology to India. As a result, India was forced to build its nuclear program in isolation. In 2008, the India–US Nuclear Deal changed things. India received an exemption that allowed it to buy nuclear fuel and reactor technology from abroad.
In 2010, another major change came with the Civil Liability for Nuclear Damage Act. This law ensured that victims would be compensated if a nuclear accident occurred.
In most countries, the operator bears the liability, and suppliers are shielded. However, in India, suppliers were also held responsible for any incident, which were private companies, operator liability was capped at ₹1,500 crore, and operators were allowed to seek compensation from suppliers if equipment failure caused the incident.
Nucleur Sector so Far...
SHANTI BILL 2025
Under the new regime, the operator bears the real liability for damage. Suppliers can be sued only if they explicitly accept responsibility for a defect or mistake. This change allows foreign vendors to engage with India without the fear of open-ended legal scrutiny. The ₹1,500 crore liability cap has been removed, and liability is now graded based on reactor size. Smaller reactors will have lower exposure. For example, a private company willing to take a risk of only ₹100 crore can now also enter the reactor business.
The Bill opens the door for private companies to own reactor plants, though not completely. The government will continue to control the front end of the fuel cycle, uranium mining and milling and the back end, including fuel reprocessing and waste disposal.
Private participation is allowed in the middle part of the chain, where reactors are built and electricity is generated. This is the most capital-intensive part of the nuclear value chain.
Reactor fuel needs to be enriched, that is, the concentration of Uranium has to be raised to 3-5%. The same machines that enrich uranium to 5% can, if run longer, take it all the way to 90%. At that point, you have weapons-grade Uranium. It’s simply not acceptable for a private company to get there. Bill gives the government the power to decide how much of this work can be opened to private players.
The Department of Atomic Energy will still have the power to deny licenses to vendors that pose a national security risk. It can also shut down any facility if safety is compromised. In such cases, all assets will be transferred to the government, free from any claims by creditors.
The Atomic Energy Regulatory Board is now strengthened as a regulator. It can make binding regulations, conduct inspections, and impose penalties. Under the new regime, India is targeting 100 gigawatts of nuclear capacity by 2047, up from about 9 gigawatts today. A budget allocation of ₹20,000 crore has been made for small nuclear reactors.
