SHANTI Act and Small Modular Reactors: Why India May Keep Strict Nuclear Safety Rules

Current event: The government is preparing rules, regulations and policies under the SHANTI Act, 2025. A newspaper report says India’s top nuclear regulator is expected to maintain the same rigorous safety and licensing approach for Small Modular Reactors as for larger nuclear reactors.

Regulatory question: The debate is not whether India should use SMRs. The real question is whether SMRs should get special regulatory relaxations because they are smaller and often use passive safety designs.

UPSC angle: This issue connects science and technology, energy security, climate mitigation, private sector participation, regulatory governance, public safety, liability, federal land-use concerns and India’s clean-energy transition.

Full form: SHANTI stands for Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India.

Legal purpose: The Act provides for promotion and development of nuclear energy and ionising radiation for nuclear power generation and non-power applications such as healthcare, food, water, agriculture, industry, research and environment. The official Gazette text also describes it as a framework for robust and secure utilisation of nuclear energy and radiation technologies.

PRS Legislative Research

Replacement of older laws: PRS notes that the SHANTI Bill replaces the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. The 1962 law governed development and use of atomic energy, while the 2010 law governed liability and compensation in case of nuclear incidents.

PRS Legislative Research

Policy shift: The Act marks a major shift because India’s civil nuclear sector was historically dominated by state-controlled institutions, especially NPCIL. The new framework allows wider participation, but under licensing, safety authorisation and strategic control.

Private participation: The Department of Atomic Energy has stated in Parliament that the SHANTI Act allows private sector participation for setting up a nuclear facility or carrying out activities related to production, use and disposal of nuclear energy, under a licence from the Central Government and safety authorisation from the Regulatory Board.

Press Information Bureau

Indian incorporation condition: PRS notes that, for specified activities, licences may be granted to companies other than companies incorporated outside India, joint ventures between government entities and private companies, and other persons expressly permitted by the Central Government.

PRS Legislative Research

Strategic control: The Act does not mean complete deregulation. Sensitive nuclear domains remain subject to government control, security, safeguards and strict authorisation.

Regulatory logic: Nuclear energy is a dual-use sensitive technology. Therefore, the State retains strong control even while expanding industrial participation.

Basic meaning: Small Modular Reactors are nuclear reactors with smaller power capacity than conventional large reactors. Many definitions internationally consider SMRs as reactors of up to about 300 MWe per unit.

Small: They produce less electricity per unit compared to large reactors, making them potentially suitable for industrial clusters, remote locations, captive power, hydrogen production and phased capacity addition.

Modular: “Modular” means that major components may be factory-built and assembled at site. This can reduce construction time if standardisation and supply chains mature.

Reactor: Like other nuclear reactors, SMRs generate heat through nuclear fission. This heat is used to produce steam, run turbines and generate electricity.

UPSC relevance: SMRs are important for GS3 under science and technology, energy security, climate change mitigation, industrial policy and strategic technology.

Clean baseload power: Solar and wind are important but intermittent. Nuclear power can provide round-the-clock low-carbon electricity.

Industrial decarbonisation: Energy-intensive sectors such as steel, aluminium, cement, chemicals, refineries and large data centres need reliable power. SMRs are being discussed as a possible clean power source for such sectors.

Land and siting flexibility: Smaller reactors may require less land per unit than large nuclear complexes, though siting, exclusion zones, water availability and emergency planning remain crucial.

Private investment: SMRs are being linked to private sector participation because smaller unit sizes may reduce project scale and allow modular deployment.

Energy security: India imports large amounts of fossil fuels. Expanding nuclear power can support long-term energy independence.

Budget announcement: The Union Budget 2025-26 announced a Nuclear Energy Mission for Viksit Bharat, with focus on R&D of SMRs. PIB states that the mission has an allocation of ₹20,000 crore and aims to develop at least five indigenously designed and operational SMRs by 2033.

Long-term target: The government has set a target of 100 GW nuclear power capacity by 2047, and nuclear energy is being positioned as a pillar of India’s clean energy strategy.

Policy linkage: The mission, the SHANTI Act and private sector participation together show that India wants to move from a state-led nuclear model towards a more innovation-driven and industry-supported civil nuclear ecosystem.

Nuclear risk is not only about size: A smaller reactor may reduce some accident consequences, but safety also depends on design, fuel type, containment, cooling system, seismic safety, operator training, cybersecurity, emergency planning and waste management.

Technology-neutral framework: The Department of Atomic Energy has told Parliament that AERB requirements are generally entity-neutral and technology-neutral, so the same framework can be used for any nuclear power project, whether private or public.

SMR ecosystem is still nascent: India does not yet have a mature domestic SMR deployment ecosystem. New entrants may lack operating experience in nuclear facilities.

Public trust: Nuclear power is sensitive because of radiation, waste and accident concerns. A perception of relaxed safety rules can weaken public acceptance.

International best practice: Nuclear regulation generally follows a graded but risk-informed approach. It may adapt requirements to design-specific risks, but does not remove the need for rigorous safety review.

Institution: The Atomic Energy Regulatory Board is India’s nuclear and radiation safety regulator. AERB’s mission is to ensure that use of ionising radiation and nuclear energy does not cause undue risk to people and the environment.

AERB

Existing statutory basis: PIB states that AERB was constituted by a statutory order under the Atomic Energy Act, 1962 to enforce safety and regulatory provisions.

Press Information Bureau

Under SHANTI Act: The Gazette text states that the AERB constituted under the Atomic Energy Act is deemed to have been constituted under the SHANTI Act. The Act provides for a Chairperson, a Whole-time Member and part-time members, with appointments made by the Central Government.

Regulatory functions: AERB lays down safety codes, standards and guides, conducts safety reviews, grants regulatory consents, monitors compliance and conducts inspections.

Press Information Bureau

Multi-stage review: AERB reviews nuclear power plants through stages such as siting, construction, commissioning, operation and decommissioning.

Operating licence: After satisfactory review of siting, construction and commissioning stages, AERB issues a licence for operation, valid for a period of up to five years.

Periodic review: During operation, plants must undergo safety reviews and regulatory inspections. PIB states that plants also undergo Periodic Safety Review every ten years.

Corrective powers: If deviations are noticed, AERB can enforce corrective or remedial measures.

Press Information Bureau

Passive safety: Passive safety means a reactor can use natural physical processes such as gravity, natural circulation and convection to maintain cooling or shutdown functions without heavy dependence on active pumps or external power.

Safety advantage: Passive systems can reduce human error and mechanical failure risks, especially during emergency conditions.

Limitations: Passive safety does not eliminate the need for design review, emergency planning, quality control, waste management, cybersecurity and operator training.

UPSC point: Passive safety is an important technical term, but it should not be misunderstood as “zero risk”.

Current backbone: India’s nuclear power programme has been largely anchored in indigenous Pressurised Heavy Water Reactors.

PHWR design: PHWRs use heavy water as moderator and coolant and can use natural uranium fuel. They fit India’s three-stage nuclear strategy and domestic technological experience.

SMR promise: SMRs may use different designs, including light-water reactors, heavy-water designs, high-temperature gas-cooled reactors or fast reactor concepts, depending on the technology provider.

Regulatory implication: Because SMR designs can vary widely, AERB cannot adopt one blanket relaxation for all SMRs. Each design needs safety evaluation.

Graded liability: The Department of Atomic Energy has stated that the SHANTI Act provides a pragmatic and graded approach for nuclear damage liability, ranging from ₹100 crore to ₹3,000 crore based on the type of nuclear facility.

Operator principle: The Act follows prompt payment by the operator with strict and no-fault liability, according to the parliamentary reply.

Government liability: Above operator liability, Government of India’s liability is up to 300 million Special Drawing Rights, after which India can seek support under the Convention on Supplementary Compensation, as per the same reply.

UPSC angle: Liability is central to the balance between investment attraction and victim compensation.

Safety capacity: Private companies may have capital and project-management capability, but nuclear operations require specialised safety culture, training and long-term accountability.

Technology dependence: If firms depend heavily on foreign or domestic technology providers, regulators may require strong arrangements for design support, operator training and technology transfer.

Conflict of interest: Strong independent regulation is essential because commercial incentives may push for faster approvals or lower compliance costs.

Public acceptance: Nuclear projects often face public concerns over radiation, land, waste and emergency preparedness. Transparent regulation is essential for trust.

Technology partnerships: India is exploring nuclear cooperation with countries and companies that have advanced reactor designs. This may include the United States, France, Russia and others.

Export control context: Nuclear technology is governed by safeguards, export controls and non-proliferation commitments.

IAEA role: The International Atomic Energy Agency provides safety standards, peer review mechanisms and guidance, although domestic regulators remain responsible for national licensing.

Strategic importance: A domestic SMR ecosystem can support India’s clean-energy diplomacy, industrial manufacturing and strategic technology ambitions.

Regulatory readiness: India must frame clear rules under the SHANTI Act without weakening safety.

Technology maturity: Many SMR designs globally are still under development, demonstration or early deployment.

Cost uncertainty: SMRs may reduce construction risk through modularity, but first-of-a-kind projects can be expensive.

Fuel and waste: Fuel supply, spent fuel management and radioactive waste disposal remain core challenges.

Human resources: Operators, regulators, emergency responders and supply-chain firms need specialised training.

Public trust: Nuclear expansion needs transparency, local consultation and credible safety communication.

GS3 relevance: Energy security, nuclear technology, clean energy transition, industrial policy, climate change mitigation and disaster risk.

GS2 relevance: Regulatory governance, statutory bodies, liability framework, Centre-state coordination and public accountability.

Prelims relevance: SHANTI Act, AERB, SMR, PHWR, IAEA, nuclear liability, SDR, passive safety, three-stage nuclear programme.

Mains relevance: The topic can be used in answers on balancing innovation and regulation, private participation in strategic sectors, clean energy transition and institutional reforms.

Adopt a risk-informed regulatory framework for SMRs that recognises design-specific safety features without diluting core licensing safeguards.

Finalise SHANTI Act rules with clear separation between policy promotion by the government and independent safety review by the regulator.

Require technology providers to give long-term design support, operator training, spare-parts assurance and safety documentation before any licence is granted.

Build a specialised SMR evaluation cell within AERB with expertise in passive safety systems, advanced fuels, cybersecurity and modular manufacturing.

Create transparent public communication protocols for radiation monitoring, emergency planning, exclusion zones and waste management.

Encourage indigenous manufacturing of nuclear-grade components through strict quality assurance and certification systems.

Strengthen India’s nuclear liability and insurance ecosystem so that investment promotion does not weaken victim compensation.

Use SMRs first in carefully chosen demonstration projects before scaling up for industrial clusters or captive power.

Align India’s SMR strategy with IAEA safety standards, India’s non-proliferation commitments and domestic climate goals.