Seventeen years after the landmark U.S.-India civil nuclear deal, India is once again at the center of global attention—this time, not just for its nuclear ambitions, but also for the way it is balancing relations with two of the world’s most powerful nations: the United States and Russia. The passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act on December 19, 2025, marks a pivotal moment in India's energy and foreign policy, offering both opportunities and challenges as the country seeks to assert its autonomy amid a fractured global order.
The SHANTI Act, as reported by the Center for Strategic and International Studies, is India’s most significant move to date to unlock the potential of nuclear power. The new law opens the country’s tightly controlled nuclear market to private players and reforms a liability regime that had long deterred foreign investment, particularly from the United States. By capping operator liability at levels consistent with the Paris and Vienna conventions—ranging from about $12 million (₹100 crore) to $360 million (₹3,000 crore)—and effectively removing supplier liability except when specifically stated in contracts, India is signaling to U.S. and other foreign firms that the commercial risks of entering its nuclear market have dramatically diminished.
But why now? And what does this mean for India’s relationships with Washington and Moscow? The answer lies in the complex web of strategic, economic, and diplomatic calculations that define India’s foreign policy under Prime Minister Narendra Modi.
India’s ambition is clear: to install 100 gigawatts (GW) of nuclear energy capacity by 2047—a massive leap from the current 8 GW, especially when compared to the more than 250 GW of renewable energy already installed. Yet, as CSIS notes, the economics of nuclear remain challenging. Recent solar and storage auctions in India have yielded prices between ₹3.1 and ₹3.5 per kilowatt hour (kWh), while nuclear reactors cost around ₹6 per kWh. High capital costs and lengthy project timelines make nuclear a tough sell, even as India seeks to diversify its energy mix for security and sustainability.
Still, the SHANTI Act does more than just address commercial concerns. It also grants statutory authority to the Atomic Energy Regulatory Board, aiming to provide a more robust regulatory structure, and exempts research and development activities from licensing requirements to spur innovation. These reforms are designed to attract not only investment but also advanced nuclear technologies—like small modular reactors—from abroad.
For the United States, this is a long-awaited opening. The 2008 civil nuclear deal was supposed to usher in a new era of cooperation, but the 2010 Civil Liability for Nuclear Damage Act’s supplier liability provisions stalled progress. Attempts by the Obama administration to create a Nuclear Liability Insurance Pool in 2015 never gained traction, as industry players remained wary of the risks. Now, with those barriers largely removed, U.S. companies can finally compete for a share of India’s nuclear future—if they choose to seize the opportunity.
Yet, as the world’s geopolitical landscape grows increasingly polarized, India’s choices are shaped just as much by global politics as by domestic needs. According to The Sentinel Assam, India’s foreign policy under Modi is defined by a careful balancing act between the United States and Russia. The historical foundation of India’s relationship with Russia is deep and resilient, forged during the Cold War and sustained through decades of defense cooperation and political support. Even today, much of India’s military equipment is of Russian origin, and operational familiarity is not easily replaced.
Russia, under President Vladimir Putin, has adopted a confrontational stance toward the West, especially in the wake of the war in Ukraine. The United States, meanwhile, frames the Ukraine conflict as a defense of international law and expects its partners to align accordingly. India, however, has charted its own course—avoiding explicit condemnation of Russia, calling for dialogue and diplomacy, and continuing to purchase Russian oil at discounted rates to ensure energy security and social stability. This pragmatic approach has drawn criticism from some Western quarters, but as The Sentinel Assam points out, it reflects India’s need to prioritize economic survival and the well-being of its vast population.
Despite these differences, the United States has refrained from punitive measures against India, recognizing the strategic importance of the bilateral relationship. Over the past two decades, ties between New Delhi and Washington have expanded dramatically, encompassing defense cooperation, technology partnerships, education, trade, and people-to-people exchanges. The Indo-Pacific region has emerged as a central focus, with both countries sharing concerns about maritime security and regional stability—especially in the face of China’s rise.
India’s engagement with both Russia and the United States is not without its risks. As global confrontation intensifies, particularly between Washington and Moscow, India’s room for maneuver could narrow. Sanctions regimes, economic disruptions, and security crises may force difficult decisions in the future. Yet, Modi’s government appears willing to accept these risks in pursuit of a long-term vision: an India that neither blindly aligns nor reflexively opposes, but instead engages selectively and acts decisively when its interests are at stake.
One of the most striking features of the current moment is India’s assertion of strategic autonomy. As The Sentinel Assam observes, domestic sentiment strongly favors an independent foreign policy, shaped by memories of colonial subjugation and a desire to avoid becoming a junior partner in another power’s strategic agenda. Modi’s approach resonates with this sentiment, projecting India as a nation capable of making its own choices despite external pressures.
The SHANTI Act, in this context, is more than just an energy policy reform—it is a signal of India’s broader intent to shape its own destiny. By breaking the state monopoly on nuclear power generation, consolidating and capping liability, and elevating regulatory authority, India is not only opening its market to foreign investment but also asserting its capacity to set the terms of engagement. Yet, as CSIS cautions, the true impact of these reforms will depend on what happens next: India must strengthen regulatory independence, clarify rules, and consider establishing a Nuclear Liability Fund to cover damages that exceed liability caps.
India’s ability to navigate this complex landscape—balancing the demands of energy security, economic growth, and international diplomacy—will shape not just its own future, but also the broader contours of the global order. Whether the promise of a nuclear-powered India can be realized without crowding out investment in faster, cheaper renewables remains an open question. What is clear is that, for now, India is determined to keep all its options open, engaging with multiple power centers while steadfastly pursuing its own national interest.
As the world grapples with uncertainty and shifting alliances, India’s evolving approach—grounded in realism, shaped by history, and guided by a vision of autonomy—offers a glimpse of what a multipolar future might look like. The success of this strategy will depend not just on bold legal reforms, but on the ability to adapt, negotiate, and lead in an era where power, principle, and pragmatism must coexist.
