With Parliament having passed the SHANTI Act, the debate over private participation in India’s nuclear power sector has shifted from whether it should happen to why it became unavoidable. The answer lies not in ideology, but in history. India’s nuclear programme, despite its early promise and long-term vision, has been unable to achieve its own ambitions. The SHANTI Act is less a radical departure than an adaptation to modern day realities.
India was among the first countries to recognise the strategic value of nuclear energy. Under the leadership of Homi J. Bhabha in the 1950s, the programme was conceived with an unusually long-time horizon. In contrast to countries where nuclear power development was driven primarily by electricity generation needs, India’s program was shaped by resource scarcity. Limited uranium reserves led to the formulation of the three-stage nuclear programme: pressurised heavy water reactors (PHWRs) using natural uranium in the first stage, fast breeder reactors to expand fissile material in the second, and thorium-based reactors in the third—leveraging India’s abundant thorium reserves.
This vision placed India decades ahead in conceptual thinking. Even in terms of technology, India has successfully designed and operated indigenous PHWRs, mastered complex fuel-cycle capabilities, and maintained a strong safety record. Yet, seven decades on, the pace of capacity addition and contribution has been more measured than what, one presumes, was originally envisioned. The installed capacity is about 8GW and nuclear power contributes barely 2% - 3% to India’s electricity mix. The failure is not technological.
From the outset, India’s civilian nuclear power sector was kept entirely within the state. NPCIL emerged as the sole owner and operator of nuclear power plants, responsible for planning, financing, construction and operation. This approach was shaped by the strategic sensitivities of the Cold War, reinforced by technology denial regimes, and sustained by a belief that nuclear power could not be separated from sovereign control.
Over the years, the limitation of relying on one public sector undertaking, to meet India’s nuclear energy needs became visible. This possibly was also the reason for recalibrating the nuclear capacity target from 60GW by 2032 to 22.5GW during the same period. While such recalibration is not uncommon across jurisdictions, but it is a reflection of the financial, managerial, and execution challenges inherent in large nuclear projects, a burden that a single public sector entity cannot indefinitely shoulder.
Recognizing this, the government, responded with the 2015 amendment, which allowed other Public Sector Undertakings such as NTPC to participate in nuclear projects. While a step in the right direction, the enactment of the SHANTI Act, appears to be a recognition of the fact that wider participation in the sector is required to achieve India’s long-term ambitions. The scale of growth required to reach the newly announced 100 GW target by 2047 marking 100 years of India’s independence demanded a more comprehensive framework for private participation, a gap that the SHANTI Act now addresses.
India’s energy system today faces a dual challenge: decarbonisation and reliability. Renewable energy has expanded impressively, but its intermittency places growing strain on the grid. Coal continues to provide baseload power, but at rising environmental and health costs. Nuclear power remains the only proven source of firm, low-carbon electricity capable of operating at scale without land-intensive deployment.
Opening the nuclear power sector to private participation allows firms to operate in non-strategic areas under regulation. Privatizing nuclear power can give India’s civilian nuclear program a distinct identity from its strategic program, boosting public support.
This is where the SHANTI Act marks a structural shift. By enabling structured private participation while retaining state oversight over strategic assets, the Act acknowledges that the monopoly model has become a bottleneck. Most significantly, it accords the Atomic Energy Regulatory Board, established in 1983, a statutory footing for the first time, addressing a long-standing institutional gap in India’s civilian nuclear architecture. Its significance lies not in dismantling public control, but in recognizing that the existing monopoly model has become a constraint on capacity expansion.
International experience underscores the point. The United States provides a clear example of how private participation can accelerate nuclear growth: reactors are owned and operated by regulated private utilities, which has allowed for both innovation and steady capacity expansion. China’s rapid nuclear expansion, by contrast, is driven primarily by large state-owned enterprises, and its highly centralized political system allows the government to enforce expansion in ways that would be difficult in a democratic, federal system like India’s. This makes the US model of regulated private-sector participation more relevant for India’s context. India’s insistence on exclusive state operation has increasingly set it apart from these global competitors, and not to its advantage.
In practice, however, the shift has been more legislative than operational. The rules governing private licensing are still at the drafting stage and are yet to be notified. No applications from private operators will be accepted or reviewed until the rules are notified. That being said, corporate interest has already started making significant moves in the anticipation of the rules. Corporate houses like Adani, Tatas, Reliance and Jindal have all signaled their intent to enter the nuclear operations market. Similarly, foreign suppliers, no longer concerned about damage liability, have also indicated interest in working in the sector.
Concerns about safety often dominate resistance to reform. But safety is a function of regulation, design and operational culture, not ownership. A strong statutory regulator, transparent oversight and clear liability rules matter far more than whether capital is public or private. India already possesses the technical competence and operational experience; what it has lacked is institutional flexibility.
The irony is hard to miss. India began its nuclear journey with extraordinary strategic foresight. But, over time, caution has hardened into governance and legislative inertia. The SHANTI Act represents an overdue course correction, not a rupture.
India did not open its nuclear power sector because it wanted to. It did so because the old model was not sufficient to deliver capacity, credibility or climate alignment. If the country is serious about energy security and decarbonisation, the real test now lies in implementation, i.e. ensuring that private participation strengthens, rather than dilutes, the original vision that launched India’s nuclear programme.
— The authors, Advocate Ayush Agarwala, Partner, Bombay Law Chambers, and Rama T. Ponangi, Research Associate at SIPA Center on Global Energy Policy, Columbia University.
Disclaimer: The views expressed above are the author’s own. They do not necessarily reflect the views of Free Press Journal.
