The government’s Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025, introduced in Parliament on December 15, seeks to fundamentally recast India’s nuclear liability regime, a long-standing barrier to private and foreign investment, as part of a broader push to scale up atomic power in the country’s clean energy transition.
At the core of the Bill is a reworked liability framework under Chapter III, which caps the maximum compensation for any single nuclear incident at 300 million Special Drawing Rights (SDRs), with the operator’s liability limited to installation-specific ceilings set out in the Second Schedule. Operators will be required to maintain insurance or other financial security equal to their liability exposure, covering decommissioning, radioactive waste disposal and compensation for radiation-related damage. Where multiple operators are involved and damage cannot be separated, liability will be joint and several, but within the overall cap.
The Bill also clearly defines the central government’s backstop role, making it liable for compensation beyond the operator’s cap, for government-owned installations, and for incidents arising from exceptional events such as grave natural disasters or armed conflict. Importantly, the operator’s right of recourse is tightly limited to cases explicitly provided for in written contracts or where nuclear damage results from intentional acts, replacing earlier uncertainty with a numerically bounded and predictable liability regime aimed at improving investor confidence.
The liability overhaul sits within a wider restructuring of India’s nuclear energy framework. For the first time since the Atomic Energy Act, 1962, the Bill creates a clear legal pathway for private companies and joint ventures to build, own, operate and decommission nuclear power plants, ending the de-facto monopoly of state-owned entities in power generation.
The reforms come as India seeks to meet its climate commitments, including a pledge to achieve 500 gigawatts (GW) of non-fossil fuel capacity by 2030 and net-zero emissions by 2070, even as electricity demand continues to rise sharply. While renewable energy capacity has expanded rapidly, policymakers increasingly see nuclear power as a source of firm, low-carbon electricity that can complement variable solar and wind generation.
With 24 reactors, India’s installed nuclear capacity currently stands at around 8.7 GW, accounting for less than two per cent of total power capacity. In her Budget speech earlier this year, Finance Minister Nirmala Sitharaman announced a target of scaling nuclear capacity to 22 GW by 2032 and 100 GW by 2047, positioning atomic energy as a pillar of long-term energy security and decarbonisation. The new Bill provides the legal foundation to pursue that ambition.
Institutionally, the legislation strengthens safety oversight by granting statutory backing to the Atomic Energy Regulatory Board (AERB), clearly defining its powers, staffing and enforcement authority. A new two-tier clearance system separates strategic licensing by the central government from technical safety authorisations issued independently by the regulator.
Even as the sector opens to private capital, the government has retained exclusive control over strategically sensitive activities, including uranium enrichment, isotopic separation, spent fuel reprocessing, high-level radioactive waste management and heavy water production, reflecting enduring national security and non-proliferation concerns.
The Bill also modernises the scope of nuclear law by explicitly recognising non-power applications in healthcare, agriculture, food safety, water management and industrial processes, and by creating regulatory space for research and innovation under supervision.
Energy analysts caution that the effectiveness of the reforms will depend on how quickly subordinate rules and financial mechanisms are notified, and whether private players are willing to invest in projects with high upfront costs and long construction timelines. Tariff design, waste management and public acceptance are likely to remain contentious.
Still, the legislation sends a clear signal: as India seeks to meet its climate targets while ensuring grid stability and energy security, nuclear power is being repositioned from a tightly guarded strategic domain to a regulated clean-energy option anchored by a reworked liability regime.