13 Feb 2026·Source: The Hindu

5 min

EconomyScience & TechnologyPolity & GovernanceEXPLAINED

SHANTI Act: Concerns over nuclear liability, safety, and accountability

The SHANTI Act opens nuclear sector to private entities, raising safety concerns.

Photo by Satyajeet Mazumdar

Background Context

The Civil Liability for Nuclear Damage Act (CLNDA) was enacted to ensure swift compensation to victims in the event of a nuclear accident. However, it also aimed to balance the interests of operators and suppliers. One of the key challenges was addressing the concerns of international nuclear suppliers, particularly from the U.S., who were hesitant to participate in India's nuclear program due to liability concerns. These suppliers sought indemnity from potential liabilities arising from accidents caused by defective equipment. The SHANTI Act represents an effort to address these concerns and encourage private sector participation in the nuclear energy sector. It modifies the liability framework under the CLNDA, which has sparked debate regarding safety and accountability.

Why It Matters Now

The SHANTI Act is relevant now because it has the potential to reshape India's nuclear energy landscape by encouraging private investment. However, it also raises critical questions about safety standards and victim compensation. With India aiming to increase its nuclear energy capacity to 100 GW by 2047, the role of private players becomes crucial. The Act's provisions on liability and supplier indemnity will significantly influence the risk assessment and operational strategies of these private entities. The ongoing debate surrounding the Act highlights the need for a robust regulatory framework that balances economic growth with public safety and environmental protection.

Key Takeaways

•The SHANTI Act allows private entities to operate nuclear plants.
•It indemnifies nuclear suppliers by channeling liability to the operator.
•The Act omits the 'right of recourse' for operators to sue suppliers.
•Operator liability is capped between ₹100 crore and ₹3,000 crore.
•Total liability is capped at ₹3,900 crore.
•Clause 46 of the CLNDA, allowing victims to invoke other laws, is omitted.
•The Act limits the independence of the Atomic Energy Regulatory Board.

Different Perspectives

•Proponents argue it encourages private investment and aligns with international norms.
•Critics worry about reduced accountability and potential moral hazard.
•Some believe the liability cap is insufficient compared to potential damages.
•Others argue it is necessary to protect private operators from adverse financial consequences.

Related Concepts

Civil Liability for Nuclear Damage Act (CLNDA)Nuclear Liability Supplier Indemnity Atomic Energy Regulatory Board Fukushima Disaster Chernobyl Disaster Moral Hazard

The SHANTI Act, passed in Parliament, allows private entities to operate nuclear plants and alters the liability framework under the Civil Liability for Nuclear Damage Act (CLNDA). The Act indemnifies nuclear suppliers by channeling liability to the operator and omits the "right of recourse" that allowed operators to sue suppliers for accidents caused by defective equipment. The operator’s liability is capped between ₹100 crore and ₹3,000 crore, while the total liability is capped at ₹3,900 crore.

The Act also omits Clause 46 of the CLNDA, which allowed victims to invoke other laws. Safety experts have warned of design defects playing a role in major accidents. The U.S.

National Defense Authorization Act seeks that India align domestic nuclear liability rules with international norms favorable to suppliers. The liability cap under the SHANTI Act is significantly smaller than the potential damage seen in accidents like Fukushima and Chernobyl. Protecting agents from consequences creates a “moral hazard” and reduces the industry’s incentive to establish resilient plants.

Nuclear energy accounts for about 3% of India’s electricity generation, but the Act creates commercial opportunities for private corporations and multinational suppliers.

Key Facts

The SHANTI Act opens the nuclear power sector to private entities.

The Act indemnifies nuclear suppliers by channeling liability to the operator.

The operator’s liability is capped between ₹100 crore and ₹3,000 crore.

The total liability for an accident is capped at ₹3,900 crore.

UPSC Exam Angles

GS Paper II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Connects to the syllabus by addressing energy security, environmental impact, and international relations.

Potential question types include analyzing the impact of the SHANTI Act on nuclear liability and safety, and evaluating its alignment with international norms.

Practice Questions (MCQs)

1. Consider the following statements regarding the SHANTI Act and the Civil Liability for Nuclear Damage Act (CLNDA): 1. The SHANTI Act allows private entities to operate nuclear plants in India. 2. The SHANTI Act removes the 'right of recourse' for operators to sue suppliers for accidents caused by defective equipment. 3. The total liability under the SHANTI Act is capped at ₹3,900 crore. Which of the statements given above is/are correct?

A.1 and 2 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: D

All three statements are correct. The SHANTI Act does allow private entities to operate nuclear plants. It also omits the 'right of recourse,' preventing operators from suing suppliers. The total liability is indeed capped at ₹3,900 crore, as stated in the summary. Therefore, option D is the correct answer.

2. Which of the following is NOT a concern raised regarding the SHANTI Act?

A.Indemnification of nuclear suppliers
B.Omission of Clause 46 of the CLNDA
C.Increased public participation in nuclear plant operations
D.Capping of operator liability

Show Answer

Answer: C

The concerns raised regarding the SHANTI Act include indemnification of nuclear suppliers, omission of Clause 46 of the CLNDA, and capping of operator liability. Increased public participation in nuclear plant operations is not a concern; in fact, a lack of public participation and transparency is often cited as a problem. Therefore, option C is the correct answer.

3. Consider the following statements regarding the international conventions on nuclear liability: 1. The Vienna Convention on Civil Liability for Nuclear Damage establishes a uniform legal framework for nuclear liability and compensation. 2. India is a signatory to the Vienna Convention on Civil Liability for Nuclear Damage. 3. The Paris Convention on Third Party Liability in the Field of Nuclear Energy is another key international agreement on nuclear liability. Which of the statements given above is/are correct?

A.1 and 2 only
B.2 and 3 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: C

Statement 1 is correct: The Vienna Convention on Civil Liability for Nuclear Damage does establish a uniform legal framework. Statement 2 is incorrect: India is NOT a signatory to the Vienna Convention. Statement 3 is correct: The Paris Convention is another key agreement. Therefore, option C is the correct answer.

4. Assertion (A): The SHANTI Act caps the operator’s liability for nuclear damage at a relatively low amount compared to international standards. Reason (R): The Act aims to attract private investment in the nuclear energy sector by limiting potential financial risks for operators. In the context of the above, which of the following is correct?

A.Both A and R are true, and R is the correct explanation of A
B.Both A and R are true, but R is NOT the correct explanation of A
C.A is true, but R is false
D.A is false, but R is true

Show Answer

Answer: A

Both the assertion and the reason are true. The SHANTI Act does cap the operator's liability at a relatively low amount. This is done to attract private investment by limiting the financial risks for operators. Therefore, R is the correct explanation of A.