India's Nuclear Sector Gets a New Rule That Could Change Operator Liability

NEW DELHI — In a major regulatory milestone aimed at expanding the nation's clean energy footprint, India’s Department of Atomic Energy (DAE) has officially released draft rules requiring all nuclear power plant operators to maintain comprehensive insurance cover, financial security, or a combination of both.

The newly notified guidelines, formulated under the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, establish rigorous liability frameworks and long-term safety mandates. As India targets an ambitious 100 gigawatts of nuclear power capacity by 2047, the new rules provide a structured framework to manage operational risks, decommissioning obligations, and radioactive waste management.

Strict Financial Security and Long-Term Safeguards

Under the proposed framework, nuclear operators must secure adequate insurance policies or financial instruments to cover potential civil liabilities for nuclear damage. Crucially, the rules stipulate that financial security must remain active throughout the plant's operational lifecycle and until all spent fuel has been completely removed from storage pools.

According to official DAE draft notifications and regulatory briefings:

• Periodic Liability Reviews: The Central Government is mandated to constitute a specialized group of experts once every five years to review and update the maximum limits of an operator’s civil liability.

• Foreign Reactor Standards: For nuclear power plants utilizing foreign designs, the technology must be formally certified by the regulatory body of the country of origin and proven operational either domestically or abroad.

• Single Composite Licensing: The regulatory framework implements a unified licensing structure covering construction, ownership, operation, and decommissioning without allowing separate or severed applications.

Official Sources Section

• Department of Atomic Energy (DAE) Official Portal: Official draft notifications, SHANTI Act regulatory frameworks, and nuclear safety guidelines.

• Ministry of Power, Government of India: National energy infrastructure expansion roadmaps and long-term generation targets.

Quote Section

According to statements released by atomic energy authorities and policy analysts reviewing the SHANTI Act framework:

"Mandating robust insurance cover and financial security for nuclear operators establishes a vital safeguard for public safety while building investor confidence as India scales its nuclear energy capacity."

Why It Matters

For private investors, energy conglomerates, and public stakeholders, the formalization of clear insurance mandates and liability caps removes long-standing ambiguity in India's civil nuclear sector. By addressing risk allocation and waste management obligations transparently, the framework paves the way for deeper private-sector participation and international technological collaborations under the nation's ambitious nuclear expansion mission.

Key Facts at a Glance

• Regulatory Milestone: DAE draft rules under the SHANTI Act, 2025.

• Mandatory Requirement: Insurance policies or financial security covering potential nuclear damage.

• Duration of Cover: Must remain in place until all spent fuel is cleared from storage pools.

• Review Mechanism: Expert group review of civil liability limits every five years.

FAQ Section

Why is the Indian government mandating insurance for nuclear operators? The requirement ensures rigorous financial accountability and risk management for nuclear damage, aligning with India's massive planned expansion of atomic energy capacity.

How long must financial security be maintained by operators? Financial security and insurance cover must remain active throughout the operational phase and continue until all spent fuel has been safely removed from storage pools.

How often will operator liability limits be reviewed? The Central Government is required to constitute an expert committee once every five years to review and adjust maximum civil liability limits.

What standards apply to foreign reactor designs under the new rules? Foreign-designed reactors must be certified by the regulatory body of their country of origin and already be operational in either their home country or another foreign jurisdiction.

Source: Department of Atomic Energy, Business Standard, The Week