India Releases Draft Nuclear Power Rules Covering Licensing, Insurance, and Private Project Development

August 21, 2026

In August 2026, the Department of Atomic Energy released the draft SHANTI Rules, 2026, proposing the licensing, liability, financial-security, and procedural framework intended to support implementation of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025.

The draft rules arrived a day before Prime Minister Narendra Modi's Independence Day address, in which he announced that India aims to start five new nuclear reactors within this decade and reiterated the government's target of 100 GW of nuclear power capacity by 2047, up from roughly 8.78 GW today.

The SHANTI Act, which received presidential assent in December 2025, establishes a new legal framework for India's civil nuclear sector, replacing the earlier framework under the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. The Act creates a statutory pathway for private companies and joint ventures to build, own, operate, and decommission nuclear power plants under government licensing and regulatory oversight, marking a significant shift from India's historically state-led civil nuclear model.

India's draft nuclear power rules, which remain subject to finalisation, propose the operational procedures for licensing, financial security, and implementation of the liability framework that could shape how this legal opening translates into new nuclear projects.

What are India's New Draft Nuclear Power Rules?

The draft SHANTI Rules, 2026 are proposed subordinate regulations issued by the DAE under the SHANTI Act, 2025, and remain in draft form pending finalisation. They set out proposed procedures for licensing nuclear installations, financial-security arrangements, and implementation of the operator-liability framework established under the SHANTI Act.

The underlying Act continues to reserve certain sensitive nuclear activities, including uranium and thorium mining, enrichment and isotopic separation, spent-fuel reprocessing, high-level radioactive waste management, and heavy-water production, for the central government or authorised government entities. The draft rules propose the licensing and operating procedures for activities permitted under the Act, within these statutory boundaries.

What Licensing Framework is Proposed for Nuclear Power Projects in India?

Two provisions in the draft rules stand out for project developers. First, the draft proposes that the licensing authority may grant an in-principle approval even before an applicant has finalised its site or reactor technology. Once granted, the applicant could begin negotiating with reactor technology vendors and proceed with land acquisition and other infrastructure development in parallel, rather than needing every element locked down before formal engagement can begin.

Second, the draft proposes a single composite licence covering construction, ownership, operation, and decommissioning of a nuclear power plant or reactor, rather than requiring separate approvals at each project stage.

If finalised as proposed, the composite-licence model could change how statutory licensing is structured across the nuclear project lifecycle, although applicable safety authorisations, technical reviews, and regulatory requirements would still need to be satisfied.

What Insurance or Financial-Security Requirements Are Proposed for Nuclear Plant Operators?

The SHANTI Act establishes strict and no-fault operator liability for nuclear damage, including liability associated with the carriage of nuclear material, while the draft rules propose how operators would demonstrate the required financial protection. Draft Rule 77 proposes that operators maintain an insurance policy, financial security, or a combination of both, in accordance with the Act. The draft further proposes that this financial protection remain in place until all spent fuel has been removed from the relevant storage pool, extending the financial-security obligation beyond normal plant operations.

A separate provision in the draft would exempt nuclear installations owned by the central government from this insurance or financial-security requirement in specified cases, with the central government instead assuming liability for damages attributable to that operator. The draft rules also propose that the central government would constitute an expert group — including specialists in nuclear science and engineering, actuarial science, insurance, and law, alongside public-interest representatives — every five years to review the maximum limits of civil liability for nuclear damage and recommend amendments where warranted.

How Could the Draft Rules Affect Private-Sector Participation in India's Nuclear Power Industry?

The SHANTI Act establishes a defined operator-liability framework, while the draft rules propose greater procedural clarity on how operators would meet associated insurance and financial-security obligations. If finalised substantially as proposed, this could help private developers, lenders, and insurers assess liability exposure, long-term financial-security requirements, and project risk more clearly when evaluating private nuclear power projects in India.

At the same time, the strict no-fault liability framework under the Act, together with the financial-security obligations proposed in the draft rules, would need to be incorporated into project economics and long-term financial planning. The framework could therefore create a clearer pathway for private-sector participation in India's nuclear power industry without necessarily reducing the technical, financial, regulatory, and risk-management requirements associated with developing nuclear projects.

What Do the Draft Rules Mean for Foreign Reactor Technology and Nuclear Project Development?

The draft rules propose specific conditions for foreign reactor technology in India. For reactors based on a foreign design, the design would need to meet the applicable regulatory approval or certification requirements specified under the proposed framework, including requirements relating to its country of origin and deployment history.

If finalised, these provisions could influence which international reactor technologies and vendors are eligible for future nuclear project development in India. Developers considering foreign reactor technology would therefore need to evaluate the design's regulatory status, operating track record, technical suitability, supply-chain support, and compatibility with India's nuclear regulatory requirements.

Alongside this, the government's Nuclear Energy Mission, announced in Union Budget 2025-26, has allocated INR 20,000 crore toward the design, development, and deployment of Small Modular Reactors (SMRs), with a stated target of at least five indigenously designed SMRs operational by 2033. This indicates that domestic reactor technology development is progressing in parallel with the potential pathway for foreign reactor technologies contemplated under the draft rules.

What Should Developers Evaluate When Planning New Nuclear Power Projects in India?

A more defined licensing and liability framework changes the regulatory starting conditions for nuclear project development in India, but it does not reduce the underlying technical complexity of a nuclear power plant. Site selection remains a rigorous, multi-factor process involving seismic assessment, water availability for cooling, population density and evacuation planning, and grid connectivity, factors that an in-principle approval, even if the draft rules permit it ahead of site finalisation, does not resolve on the developer's behalf.

Technology evaluation, particularly for a developer considering a foreign-designed reactor, needs to confirm the design and its country-of-origin regulatory approval meet the qualification standard the draft rules propose, before major vendor or project commitments are made. Regulatory planning also needs to account for the fact that these rules remain in draft form, meaning the finalised version could differ from what is currently proposed, and any project timeline built around the draft needs to account for that regulatory uncertainty.

Financing structures need to model the insurance and financial-security obligations the draft proposes, including their extension through the spent-fuel removal period, as a long-duration cost rather than a one-time compliance item. And safety engineering, infrastructure planning, and construction sequencing for a nuclear facility remain as demanding as they have always been, a composite licence structure changes how approvals are bundled, not the engineering standard a plant must meet to be licensed and operated safely.

India's SHANTI Act establishes a new liability and private-participation framework, while the draft SHANTI Rules propose a composite licensing structure, financial-security procedures, and conditions for foreign reactor technology. Whether these reforms translate into 100 GW of operating capacity by 2047 will depend on project-specific site, technology, financing, safety, engineering, and execution decisions.

IMARC Engineering’s Perspective

India's draft nuclear power rules represent a genuinely significant step toward defining how private capital, foreign reactor technology, and a modernised liability framework could combine to support the country's 100 GW by 2047 ambition, but as a draft, the framework is still subject to change, and even once finalised, it addresses regulatory structure rather than project engineering.

At IMARC Engineering, we see this as the moment where developers evaluating nuclear power plant development need to pair regulatory awareness with rigorous, independent engineering assessment: site feasibility studies that test seismic, water, and grid conditions against a specific candidate location; technology evaluation that verifies a reactor design's country-of-origin approval status against the qualification standard the draft rules propose; and infrastructure and safety engineering planning that begins well before a licence, in-principle or composite, is granted.

As India works to move from 8.78 GW toward its 2047 target, and as these draft rules move toward finalisation, the developers that undertake rigorous site, technology, infrastructure, regulatory, and feasibility work early may be better positioned to translate an emerging regulatory framework into bankable and executable nuclear projects.