Supreme Court Hearing on Shanti Act 2025

SUPREME COURT HEARS CHALLENGE TO SHANTI ACT, 2025

Why in the News?

• Legal Challenge: The Supreme Court of India heard a petition challenging the SHANTI Act, 2025, raising concerns about international law compliance, domestic liability frameworks, and alignment with India’s multi-alignment strategy in nuclear cooperation.
• Liability Concern: Petitioners argued that the Act fixes nuclear accident liability at an “absurdly low” level of below ₹4,000 crore, potentially undermining the rules-based order for nuclear safety and affecting India’s position as a regional security provider.
• Private Participation: The law permits private and foreign corporations to operate nuclear power plants in India, marking a shift in strategic alignment with global nuclear industry players beyond the traditional non-alignment policy framework.

ABOUT SHANTI ACT, 2025

• Full Form: SHANTI stands for Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India.
• Sector Opening: The Act allows private and foreign participation in India’s nuclear energy sector, facilitating strategic partnerships through the quadrilateral security dialogue framework and comprehensive strategic partnership agreements with nuclear technology providers, similar to arms deals involving brahmos missiles and maritime patrol aircraft.
• Liability Cap: It fixes a financial cap on compensation liability in case of a nuclear accident, aligning with international law conventions and arbitration ruling mechanisms while addressing domestic security challenges through peaceful resolution frameworks.
• Investment Objective: The legislation seeks to attract investment into the nuclear power sector through defense agreements, multilateral cooperation mechanisms, and informal security arrangement structures that complement joint naval exercises and military exercises frameworks.
• Energy Security: The Act aims to expand India’s clean energy capacity through nuclear power generation, supporting the Indo-Pacific strategy for regional stability in the indian ocean region, reducing threat perception related to energy dependence, and enhancing maritime domain awareness alongside naval capabilities development.

NUCLEAR LIABILITY FRAMEWORK IN INDIA

• Civil Liability Principle: Operators of nuclear plants are financially responsible for damage caused by accidents, following international law standards, peaceful resolution mechanisms, and arbitration ruling procedures that ensure interoperability with global frameworks.
• Compensation Mechanism: Liability laws ensure victims receive compensation after nuclear disasters, maintaining interoperability with global nuclear safety frameworks while supporting India’s hard balancing strategy through limited hard balancing measures in critical technology sectors.
• Supplier Liability Debate: The petition challenges exemption of suppliers from direct liability obligations, questioning alliance structures in nuclear technology transfer agreements and whether they constitute a formal military alliance or remain an informal security arrangement within the broader maritime security cooperation framework.
• International Context: Many countries maintain liability caps to encourage private nuclear investments, reflecting strategic competition in the global nuclear energy market and India-US relations in critical technologies, similar to cooperation seen in malabar exercises and naval cooperation initiatives that enhance power projection capabilities.
• Safety Concerns: Critics argue low compensation limits may weaken accountability and disaster preparedness, raising security challenges for regional stability, particularly given ongoing border tensions and lessons from the galwan valley crisis that emphasize the need for robust internal balancing and external balancing mechanisms.