The enactment of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, represents a significant shift in India’s nuclear policy since the 1960s. The Act received the assent of the President of India on December 20, 2025, repealing the long-standing Atomic Energy Act, 1962 and Civil Liability for Nuclear Damage (CLND) Act, 2010. The new legislation moves India away from a rigid state monopoly toward a regulated framework that invites private participation and modernised intellectual property standards. This transition is aimed at meeting India’s ambitious target of reaching 100 GW of nuclear capacity by 2047, a goal that necessitates a massive influx of private investment, international technology transfer, and, crucially, an inclusive system for protecting nuclear innovations.
For decades, the Indian patent regime operated under a strict prohibition regarding nuclear technology. Section 4 of the Patents Act, 1970, acted as an absolute bar, stating that no patents could be granted for inventions relating to atomic energy. The SHANTI Act has fundamentally altered this landscape by substituting Section 4 with a provision that finally allows for the patenting of nuclear-related inventions. This change is not an unregulated “open door” policy but rather a “qualified permissibility.” Patents may now be granted subject to the provisions of the Patents Act and, specifically, Section 38 of the SHANTI Act. This shift signals to the global R&D community that civilian and peaceful applications of nuclear technology, such as nuclear medicine, food irradiation, and Small Modular Reactors (SMRs), are now eligible for protection in India.
Under this new regime, the patent application process involves a specialised screening mechanism designed to balance commercial innovation with national security. When an inventor files a patent application related to nuclear energy, the Indian Patent Office must refer the matter to the Central Government or the designated Atomic Energy Authority. This authority evaluates whether the invention falls within the “peaceful use” category or if it touches upon strategic and defence-related areas. If the invention relates to sensitive “fuel cycle” activities, such as uranium enrichment, spent fuel reprocessing, or heavy water production, the government retains the right to block the patent or take control of the technology. However, for the vast majority of civilian innovations, the path to patent protection is now legally viable.
Security safeguards remain a cornerstone of the new law, ensuring that liberalised patenting does not lead to the leakage of sensitive data. Even though patents are now permitted, the government has a right to exercise control through Secrecy Directions under Section 35 of the Patents Act. If an invention is deemed relevant for defence or national security, the Controller of Patents can prohibit the publication or communication of the invention details. Furthermore, inventors must remain mindful of Section 39, which prohibits Indian residents from applying for patents directly in foreign jurisdictions without prior written permission from the Indian Patent Office. These provisions ensure that while the commercial potential of nuclear energy is being unlocked, the government retains control on the strategic implications of the underlying technology.
Beyond intellectual property, the Act addresses the long-standing hurdle of nuclear liability, which had previously deterred many international technology suppliers from entering the Indian market. The SHANTI Act introduces a tiered liability structure that replaces the older, flat-cap system. Under the new Third Schedule, liability is graded based on the thermal power of the facility. For large reactors with thermal power exceeding 3,600 MW, the operator’s liability is capped at ₹3,000 crore. This cap decreases for standard reactors and drops significantly to ₹100 crore for small reactors or research facilities with power below 150 MW. This graded approach is specifically designed to encourage the development of Small Modular Reactors, which are seen as a safer and more flexible alternative for private operators.
The legal framework for private sector entry is further clarified by narrowing the “Right of Recourse” against equipment suppliers. In the past, suppliers faced the risk of being sued by operators for damages in the event of an accident, even if the fault was not clearly theirs. The SHANTI Act clarifies that such recourse is available only if explicitly agreed to in a written contract or if the supplier acted with a specific criminal intent to cause damage. This brings India closer to international liability standards and provides the legal certainty required by global companies to participate in India’s nuclear journey.
The SHANTI Act 2025 establishes a dual-track system: the government maintains its monopoly over the strategic nuclear fuel cycle, while opening reactor operation, equipment manufacturing, and fuel fabrication to private entities and joint ventures. For companies and research institutions, this means that for the first time in Indian history, their nuclear R&D holds tangible commercial value. By allowing patents while maintaining necessary secrecy controls, India has crafted a middle path that seeks to fuel a clean energy revolution without compromising its national security interests.
Author: Joginder Singh
First Published by: Mondaq here