Context / Why this is in news

0.1 Parliament has passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, marking a decisive step in India nuclear energy reform.
0.2 This is the largest reform in the nuclear sector since the Atomic Energy Act, 1962.
0.3 The objective is to enable private sector participation in civil nuclear power to support clean energy goals, energy security, and baseload electricity.

What the SHANTI Act changes

0.1 Earlier, nuclear power generation was largely under a state monopoly.
0.2 The Act introduces a licence-based framework allowing private companies to participate.
0.3 The Atomic Energy Regulatory Board (AERB) is granted clear statutory status as the sector regulator.

Civil nuclear liability reform

0.1 Nuclear projects are long-term and capital-intensive, making legal certainty essential.
0.2 Under the earlier Civil Liability for Nuclear Damage Act, 2010, operators could seek recourse against suppliers.
0.3 This created open-ended liability risks, discouraging foreign and private suppliers.
0.4 The SHANTI Act limits supplier liability strictly to contractual terms, aligning India with international nuclear norms.

Areas where clarity is still lacking

0.1 The law does not clearly define “sensitive activities”, “strategic nature”, and related security exceptions.
0.2 Investors may remain uncertain whether facilities could later face stricter regulatory control.
0.3 Such ambiguity can delay investments, especially in new technologies like small modular reactors (SMRs).

Regulatory structure concerns

0.1 Members of the AERB continue to be selected through committees under the Department of Atomic Energy.
0.2 This raises concerns because the same department handles both promotion and regulation of nuclear power.
0.3 Greater institutional independence would improve regulatory credibility and investor confidence.

Nuclear power pricing and tariff issues

0.1 Nuclear power involves high upfront costs, making electricity generation expensive.
0.2 Pricing is currently determined through government-administered tariffs, not market mechanisms.
0.3 This means prices are fixed by the state, rather than by supply and demand.

Why administered pricing creates problems

0.1 State electricity distribution companies (discoms) are already under financial stress.
0.2 Mandatory purchase of high-cost nuclear power can worsen their finances.
0.3 This reduces demand for nuclear electricity and discourages private investment, undermining India nuclear energy reform.

What Section 37 implies in practice

0.1 Section 37 gives the central government authority over pricing and sale of nuclear electricity.
0.2 This allows the government to override normal electricity market arrangements.
0.3 As a result, direct contracts between private producers and consumers become difficult.

Alternative demand-side approach

0.1 Large consumers such as data centres, industrial clusters, SEZs, and commercial users need reliable, clean power.
0.2 These users are willing to pay a premium for round-the-clock non-fossil electricity.
0.3 Allowing direct commercial contracts can improve the financial viability of nuclear projects.

Way forward

0.1 Expansion of nuclear power should be driven by commercial agreements, not forced procurement.
0.2 Reducing excessive government control over tariff setting will improve investment prospects.
0.3 Clear rules on regulation, pricing, and contracts are essential for successful India nuclear energy reform.

Core takeaway

0.1 India has taken a decisive legal step towards expanding nuclear energy.
0.2 The success of this reform now depends on clarity, regulatory independence, and flexible pricing, not legislation alone.