Civil nuclear liability has historically been a barrier to foreign investment in India's nuclear sector. Critically analyse how the SHANTI Act, 2025 addresses this.

Q. Civil nuclear liability has historically been a barrier to foreign investment in India's nuclear sector. Critically analyse how the SHANTI Act, 2025 addresses this. (15 marks, 250 words)

The Civil Liability for Nuclear Damage Act (CLNDA), 2010, by channelling liability to the operator yet retaining a supplier recourse clause (Sec. 17), deterred foreign reactor vendors and stalled deals since the Indo-US nuclear agreement. The SHANTI Act, 2025 — which repeals both the CLNDA and the Atomic Energy Act, 1962 — recasts this regime to revive investor confidence [1][2].

How it eases the liability barrier - Removes supplier liability, aligning India with the international no-fault, operator-channelled norm and easing OEM apprehensions [2]. - Introduces a graded liability framework (operator caps of ₹100–3,000 crore by installation size; overall ceiling of 300 million SDR), replacing the earlier flat cap with predictable, risk-proportionate exposure [1]. - Grants statutory status to the AERB and permits private/JV and foreign entities to build, own and operate plants — pursuing the 100 GW-by-2047 target [2].

Critical assessment - Rules still un-notified (drafting stage, 2026), so private licensing is not yet operational — a live implementation bottleneck [1]. - Capped liability may under-compensate victims in a Bhopal-scale incident, raising equity concerns. - Liability extending to damage in a foreign state's territory adds cross-border complexity [2]. - Alignment with the Convention on Supplementary Compensation remains to be operationalised.

By trading the deterrent supplier clause for graded, internationally-aligned liability, the Act meaningfully lowers the investment barrier. Realising its promise now hinges on prompt, victim-sensitive Rules — balancing energy security and decarbonisation (2070 net-zero) with the constitutional duty to protect life under Article 21.

(~250 words)

Sources: 1. PRS Legislative Research — SHANTI Bill, 2025 (Bill Summary) — graded liability tiers, 300 million SDR cap, repeal of CLNDA/AEA, un-notified Rules 2. PIB — The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 — removal of supplier liability, statutory AERB, private-sector entry, 100 GW-by-2047, foreign-territory damage