Regulatory systems are ultimately theories of risk. They encode assumptions about who may bear it, how it should be priced, and which institutions can be trusted to manage it. For much of independent India’s history, nuclear governance rested on a single premise: catastrophic risk must be contained through state monopoly and legal exceptionalism. The Sustainable Harnessing of Nuclear Energy for Transforming India (SHANTI) Act, 2025 marks a deliberate departure from this premise. Its significance lies less in its immediate impact on reactor capacity and more in how it redefines the relationship between the state, markets, and high-consequence technological risk.
The Statement of Objects and Reasons (SOR) makes this shift explicit when it acknowledges that India’s legacy legal framework had become a constraint on clean-energy expansion, private participation, and timely capacity addition. That acknowledgement is philosophically important. It recognises that the problem was not ambition or capability, but institutional design.
The Atomic Energy Act of 1962 reflected a distinctly postwar regulatory philosophy in which sovereignty was equated with ownership and centralised command. Safety, secrecy, and strategic autonomy were pursued by concentrating all operational, financial, and technological responsibility within a single public entity, leaving little room for institutional pluralism or external oversight. This framework assumed that dispersing activity across multiple actors would inevitably weaken control, increase security risks, and dilute accountability. As a result, monopoly was treated not merely as an administrative choice, but as an essential condition for governing a technology perceived to be uniquely dangerous and politically sensitive.
SHANTI rejects this equivalence. It recognises that modern states exercise control not primarily through ownership, but through licensing, standards, supervision, and liability design. SHANTI enables participation by both public and private entities. It still retains strict authorisation, safety, and security requirements. The Act shifts the locus of state authority from production to governance. As the SOR notes, the objective is to allow broader participation without compromising safety, security, or India’s self-reliance in the nuclear fuel cycle.
The state remains central, not as the sole operator, but as the architect and guarantor of the system within which multiple operators function. This aligns nuclear governance with India’s regulatory evolution in other strategic sectors, where the state has moved from monopolist to system regulator without surrendering sovereign objectives.
One of the most consequential changes introduced by SHANTI is its treatment of nuclear liability. The earlier regime under the Civil Liability for Nuclear Damage Act, 2010 relied on an expansive conception of supplier liability. While morally intuitive, it failed a basic test of regulatory design. It rendered nuclear risk uninsurable, capital unpriceable, and projects unbankable.
SHANTI replaces this moralised framework with explicit risk allocation. Liability is channelled, bounded, and supported by insurance mechanisms and sovereign backing, reflecting the SOR’s recognition that the existing liability framework discouraged investment and participation. The Act acknowledges a hard regulatory truth, i.e., lowprobability, high-impact nuclear accidents represent systemic risk, not firm-specific failure, and cannot be internalised by private balance sheets alone.
This is a correction of category error. Catastrophic technological risk belongs to the domain of public risk pooling and sovereign backstopping, not ordinary private tort law. Every country that has built nuclear capacity at scale has arrived at this conclusion through experience.
A key philosophical feature of SHANTI is the normalisation of nuclear power as infrastructure, without trivialising its risks. The Act does not collapse nuclear safety into generic industrial regulation. Instead, it adopts a tiered governance model. Exceptional safety oversight, emergency preparedness, and security protocols coexist with otherwise standard principles of procurement, financing, and participation.
This distinction matters. Regulatory exceptionalism, when taken too far, isolates sectors from innovation, capital, and learning. SHANTI signals that exceptional risk requires differentiated oversight, not permanent exclusion from the institutional mainstream. The SOR’s emphasis on licensing, safety authorisation, and dedicated dispute-resolution and claims mechanisms reflects this calibrated approach.
The older regulatory regime was shaped by a risk-avoidance mindset. The objective was to eliminate exposure by limiting actors and freezing institutional arrangements. The outcome was stagnation: delayed projects, technological lock-in, and an inability to scale nuclear capacity despite rising energy and climate imperatives.
SHANTI embodies a riskmanagement mindset. It accepts that some risks cannot be eliminated, only structured. The regulatory task becomes one of defining boundaries, aligning incentives, and ensuring that failure, if it occurs, remains governable. This marks a shift from symbolic safety to operational safety, grounded in institutions rather than intent.
Beyond nuclear energy, SHANTI offers a broader lesson in regulatory philosophy. As India confronts other highstakes domains, advanced reactors, space nuclear systems, synthetic biology, or frontier AI, the central challenge will not be the absence of risk, but the design of institutions capable of absorbing it.
SHANTI suggests that credible governance in such domains rests on three principles: clear allocation of catastrophic risk to the sovereign; disciplined private participation under enforceable standards; and regulatory institutions that privilege financeability and operational viability alongside safety.
SHANTI reflects a maturing state. One that no longer treats risk as a moral failure or private participation as a loss of control. Instead, it recognises regulation as an exercise in institutional design under uncertainty.
The Act does not promise riskfree nuclear power. No serious regulatory framework can. What it promises instead is coherence. The coherence between safety and finance, sovereignty and participation, ambition and realism. In that coherence lies its true regulatory significance.
* Aditya Sinha writes on geopolitical and macroeconomic issues.
