Govt Notifies SHANTI Act Rules; L&T, BHEL, MTAR Among Likely Beneficiaries

The government on Friday notified the draft rules for the SHANTI Act, a move that could create a sizeable equipment and EPC opportunity for companies such as Larsen & Toubro (L&T), BHEL, Power Mech, MTAR Technologies and Walchandnagar Industries, among others, as India opens its nuclear energy sector to private players for the first time.

The rules replace multiple older frameworks and lay down provisions for operator liability, financial protection, waste management and radiation protection, besides setting conditions for the deployment of foreign reactors.

India's current nuclear energy capacity stands at 8.78 gigawatts, according to official data. Several 700 MW and 1,000 MW indigenous reactors are being developed across the country, with capacity projected to cross 22 GW by 2031-32.

Boost For SMR Opportunity

The draft rules could materially accelerate India's small modular reactor, or SMR, opportunity by creating a framework for private participation in civil nuclear power generation, brokerage firm Elara Securities said, as reported by Business Today.

The brokerage said the proposed rules could expand the addressable market for industrial and commercial applications by allowing a single composite licence and wider use of nuclear power for captive generation, process heat and hydrogen production.

Elara added that the draft regulations could support the planned SMR ambitions of NTPC, Tata Power Company and Adani Power, while creating an EPC and equipment opportunity for companies including L&T, BHEL, Power Mech, MTAR Technologies and Walchandnagar Industries.

Calling the draft rules a watershed moment in India's nuclear policy, the brokerage said the framework's provision for approved domestic and foreign reactor technologies could facilitate technology partnerships and faster deployment. It added that stage-wise safety approvals, assured fuel supply, and waste management and decommissioning requirements could offer greater regulatory certainty through a project's lifecycle.

What The SHANTI Act Seeks To Do

The SHANTI Act aims to rapidly expand nuclear energy capacity in line with India's net zero target for 2070. It consolidates and updates the country's nuclear laws, with the long-term objective of reaching 100 GW of nuclear energy capacity by 2047.

The Act ends the government's longstanding monopoly over the sector, allowing private companies to participate for the first time in activities such as atomic mineral exploration, fuel fabrication, equipment manufacturing and certain aspects of plant operations. The government will continue to retain control over sensitive fuel cycle activities.

"The SHANTI Act is focused on the Nuclear Energy Mission of the Government of India, to achieve a target of 100 GW by 2047. This Act opens the nuclear energy sector to private participation," Union Minister Jitendra Singh told the Rajya Sabha in late July.

The Act also grants statutory recognition to the Atomic Energy Regulatory Board, strengthening its regulatory role.

Licensing And Financial Safeguards

The draft rules outline operator liabilities and financial safeguards for private companies. Foreign nuclear technology will need to have its design approved by a regulatory body in its country of origin, and must already be operational in that country or another foreign nation.

Entities seeking to set up a nuclear power plant or reactor will have to apply for a licence and undergo screening. They can begin negotiations with reactor technology vendors and set up infrastructure only after receiving an "in-principle approval," which can be granted even before the site or technology is finalised.

Financial security must remain in place until all spent fuel is removed from the storage pool, and operators must maintain insurance and financial security against nuclear damage. The Centre will constitute a group of experts every five years to review the maximum limits of an operator's civil liability for nuclear damage. A single composite licence will authorise the construction, ownership, operation and decommissioning of a plant or reactor.

The rules mandate strict record-keeping and inventory verification for nuclear substances, along with the appointment of an approved officer to oversee compliance. They also require protection of digital control systems, multi-layered physical barriers to prevent theft or sabotage, and regulated containment and disposal of radioactive waste.