India’s ambitious target of achieving 100 GW of nuclear energy capacity by 2047, as announced in the recent Union Budget, marks a significant shift in the country’s energy strategy. The government’s plans include encouraging private sector participation, fostering the development of small modular reactors (SMRs), and strengthening regulatory and financial frameworks to enable large-scale deployment. Industry experts share their views on the opportunities, challenges and the future of nuclear energy in India…
What are your views on the 100 GW target for the nuclear energy segment announced in the recent budget?
Kaveri Ashok
The target of 100 GW of nuclear energy by 2047 is ambitious and crucial for India’s energy security and decarbonisation. It also demonstrates the political will to support public-private partnerships (PPPs) in the development and deployment of SMRs. However, private sector participation hinges on a clear regulatory framework, risk-mitigating financial instruments and transparent liability provisions. While the Bharat Small Reactor (BSR) initiative is a step forward in fostering a favourable ecosystem, we must look at adapting financing mechanisms, such as long-term power purchase agreements and green bonds, which enable renewable energy deployment at scale, specifically for nuclear projects.
In the short to medium term, regulatory clarity, investment incentives and efficient project execution will determine the pace of nuclear expansion and its role in India’s energy transition. Public perception towards nuclear energy remains a significant hurdle and can make or break the vision, as we have seen in countries such as Germany. Proactive engagement, clear safety protocols and education on nuclear power’s role in mitigating climate change can prove to be crucial. Further, nuclear energy, particularly from SMRs, can complement renewables by providing stable baseload power, mitigating intermittency issues and enabling a hybrid energy portfolio. With competitive tariffs, priority despatch policies and innovative financing, India can accelerate nuclear adoption and position it as a key pillar of its energy transition.
“Regulatory clarity, investment incentives and efficient project execution will determine the pace of nuclear expansion and its role in India’s energy transition.”
Anish De and Abirbhav Mukherjee
The targets are crucial for the nation to not only achieve its climate goals but also for energy adequacy. However, to meet these targets, India must install more than 4 GW of new nuclear power plants within a relatively short span of 22 years, which is very ambitious, considering the complexities of nuclear energy. In 2024, India had a nuclear power capacity of 8.1 GW. Fortunately, the country has a plethora of new actors eager to contribute, such as the 18 GW and 20 GW nuclear capacity targets set by the Jindal Group and NTPC respectively. This marks a promising beginning.
We will also witness the emergence of partnerships. A positive step in this direction is the recent request for proposal by Nuclear Power Corporation of India Limited (NPCIL) to set up 220 MW of SMRs, proposing to operate these SMRs to comply with the clauses in the Civil Liability for Nuclear Damage (CLND) Act, 2010. However, this is merely a temporary measure and focuses solely on the captive power requirements of industries. An amendment to the CLND Act is imperative, a notion acknowledged by the union finance minister during her budget speech for FY2025-26.
It is also crucial to create a robust development ecosystem on both the supply side and the demand side. Nuclear energy can efficiently provide not only electricity but also heat, particularly for energy-intensive industries such as steel, chemicals and aluminium. The importance of skill development in this sector cannot be overstated. These are often specialised skills, exemplified by the rehiring of retired nuclear power plant professionals in the US.
“Nuclear energy can efficiently provide not only electricity but also heat, particularly for energyintensive industries such as steel, chemicals and aluminium.”
Harsh Kanani
India currently has 23 functional nuclear reactors and a total installed capacity of 8 GW. The total share of nuclear energy’s contribution to India’s generation stands at a mere 4 per cent.
As per the budget, the government plans to allocate Rs 200 billion for the research and development (R&D) and the installation and operationalisation of five SMRs by 2033. The government has proposed to develop SMRs that can conventionally run on uranium as the primary fuel. While the step taken towards increasing nuclear power capacity is in the right direction, its growth in India has been sluggish due to the key reasons below:
Centralised control: NPCIL and the Department of Atomic Energy have been the primary stakeholders driving nuclear development, interfacing directly with the Indian government.
Lack of policy amendments: India has remained outside the Treaty on the Non-Proliferation of Nuclear Weapons due to its weapons programme, leading to over 30 years of exclusion from trade in nuclear plants and materials, which hampered the development of civil nuclear energy. In the past 15 years, a fundamental mismatch between India’s civil liability law and international conventions has limited the provision of foreign technology.
Lack of financing support: The development of nuclear capacity in the country has been through limited budgetary allocations and policy support.
High-priced low quality uranium: India has a meagre 1-2 per cent of the world’s uranium deposits. The majority of high-grade nuclear fuel is sourced from Kazakhstan, Canada and Russia, with India spending an average of Rs 6 billion for 1,000 tonnes of uranium, which is still cheaper than domestically sourced nuclear fuel.
“The role of nuclear power in the overall energy mix needs to be defined clearly to increase focus on the objectivity of implementation and improve the planning of the Indian power system.”
Somesh Kumar
The 100 GW target for nuclear energy by 2047 is ambitious yet necessary to enhance the country’s energy security, diversify the energy mix and support industrial decarbonisation goals. This target aligns with India’s net zero 2070 commitment and reflects a strategic shift towards reliable, baseload clean power to complement intermittent renewables such as solar and wind. However, achieving this scale will require a massive ramp-up in reactor construction, indigenous technology development and robust financial mechanisms. Currently, India’s installed nuclear capacity is 8.2 GW, with 15.3 GW under construction. Even with the fleet-mode deployment of 700 MW of pressurised heavy water reactors (PHWRs) and proposed SMRs, the growth rate must accelerate significantly to meet the target.
A phased approach will be essential, focusing on streamlining regulatory approvals, expanding the domestic manufacturing of reactor components, and securing long-term fuel supply agreements. Additionally, nuclear’s high upfront capital requirements necessitate innovative financing models, such as blended finance, and international collaborations. The government’s initiative to fast-track approvals, increase uranium fuel security, and encourage private sector involvement in manufacturing and supply chains will be crucial in achieving this milestone.
“Encouraging PPPs in nuclear component manufacturing, SMRs and hydrogen production will also be key to ensuring a sustainable and investable nuclear sector.”
Amit Sharma
The government’s 100 GW target for nuclear energy is a bold and necessary move to strengthen India’s energy security while reducing dependence on fossil fuels. Nuclear power offers a reliable, low-carbon baseload energy source, complementing the renewable energy expansion. This ambition aligns well with the country’s net zero goals, ensuring long-term sustainability and energy resilience. The focus on scaling nuclear capacity also presents significant opportunities for technology innovation, localisation and skill development in the sector.
Tata Consulting Engineers (TCE) welcomes this aim and is well positioned to support nuclear projects through engineering, project management and advanced technology solutions.
Union Budget 2025-26 announced a target to set up 100 GW of nuclear power capacity by 2047, including through private sector participation, to meet the energy transition goals. Further, the Nuclear Energy Mission was announced the promote the R&D of SMRs. An outlay of Rs 200 billion has been budgeted to operationalise at least five indigenously developed SMRs by 2033. The Nuclear Energy Mission is expected to support the country in moving towards the clean energy goals. While large investments are under way in the solar and wind power sectors for meeting these goals, scaling up the nuclear power capacity will enable the grid to meet the base load demand without the requirement of large storage capacities.
“The government’s 100 GW target for nuclear energy is a bold and necessary move to strengthen India’s energy security while reducing dependence on fossil fuels.”
Vikram V.
India has installed a nuclear power capacity of 8.2 GW, entirely led by government-owned NPCIL under the DAE. Given the large capital investment associated with these projects, the targeted scale-up of nuclear capacity requires private sector participation. This necessitates suitable amendments to the Atomic Energy Act, 1962, as well as to the CLND Act, 2010. This apart, clarity is required on the policy front and the tariff framework for awarding such projects to the private sector.
Currently, NPCIL has three projects under active construction with an aggregate capacity of 4,800 MW, as well as projects aggregating 9,000 MW at various stages of development. This includes projects proposed to be developed by NPCIL in the joint venture with NTPC Limited. The government aims to commission the majority of these projects by 2032. However, delays cannot be ruled out given the execution challenges faced by these projects.
The capital cost of these projects is expected to remain high at over Rs 15 billion per MW, necessitating investments of over Rs 250,00 billion over the next five to seven years. Apart from the high capital cost, these projects remain exposed to significant execution risks, which have led to delays in implementation in the past. Moreover, given the high capital cost, the tariff for these projects remains high, especially during the initial years of operations. Nonetheless, the long life of these assets, spanning over 40-50 years, enhances tariff competitiveness in the long term.
“The capital cost of nuclear projects is expected to remain high at over Rs 15 billion per MW, necessitating investments of over Rs 250,00 billion over the next five to seven years.”
What are some of the issues and challenges that need to be addressed to attract private sector participation in the nuclear segment?
Anish De and Abirbhav Mukherjee
Legal and regulatory challenges: The objective should be to remove legal hurdles and address concerns about the imposition of unprecedented damage liabilities on private players. Suggestions include:
- Revamp of the CLND Act, especially Sections 4 and 17, and the review of the shareholding requirements for participating companies.
- Expand the government investment programme (GIP) pool and provide sovereign guarantees in the GIP, instead of being restricted to PPPs, to assuage the fears of private players.
Reducing permitting delays:
- There is a need to adopt a proactive approach for granting permits, as delays in this regard can derail the development of nuclear energy.
- Technologies such as Generation IV (Gen-IV) reactors should be deployed due to their sustainability, recyclability and passive safety. However, these are usually developed by start-ups without experience in nuclear, and therefore, could face delays in approvals. There need to be suitable amendments in this regard.
- India should monitor developments in the UK and the US, where efforts are under way to overcome regulatory delays, especially for superior Gen-IV technologies.
Reducing reliance on PHWRs:
- Despite its success, overreliance on just one technology is risky and can hinder innovation and efficiency improvements. It is also essential to consider the flexibility and load following capabilities.
- India must focus heavily on Gen-IV technologies, many of which can be advantageous due to their sustainability characteristics, promoting self-reliance in energy and minerals.
Developing domestic manufacturing capabilities:
- Gen-IV SMRs may be superior to PHWRs in terms of manufacturing and not require excessive on-site construction, thus supporting the manufacturing ecosystem.
- India must provide initial financial and fiscal aid to boost the manufacturing of SMRs, as seen in the case of mobile phone manufacturing, solar PV manufacturing, etc.
Skill development for the nuclear workforce:
- Dedicated skilling opportunities are needed to cater to the demand of the emerging nuclear industry.
- Foreign collaborations and partnerships to this end may initially help until a knowledge-based ecosystem is developed domestically.
- India has successfully developed domestic capabilities and expertise, as seen in the success stories of the Delhi metro and the growth of the metro rail ecosystem. However, replicating this achievement in a highly regulated industry like nuclear, and that too within a span of 22 years, remains a significant challenge.
Promoting exports:
- Focusing on the export market can help India foster a skilling and innovation ecosystem, as demonstrated by the success of nuclear power plant exporters such as South Korea, Japan and Russia, and emerging exporters like China.
- An export-oriented focus has helped these countries in reducing lead times for nuclear development.
- The US, the UK and the UAE are developing ecosystems and knowledge bases to become leading players in the global nuclear market and cater to other countries’ requirements.
- An export-oriented approach aligns with India’s push for Make in India.
Harsh Kanani
India implemented the Atomic Energy Act, 1962 to safeguard national security, ensuring central control of reactor development, operations and the material supply chain to promote the peaceful development of nuclear capacities. Due to the act’s nature, which limited government control, private sector/non-government sector involvement was hampered. To achieve the goal of 100 GW of nuclear capacity, key areas that need to be streamlined include:
Regulations: The CLND Act, 2010 currently complicates liability concerns. Therefore, developing a comprehensive framework to address these issues would enhance confidence in private investment.
Supply chain development: India has developed an indigenous supply chain for various critical nuclear components; however, technology transfer from global players will be essential to enhance our design capabilities and operational efficiency.
Planning for the overall energy mix: The role of nuclear power in the overall energy mix needs to be defined clearly to increase focus on the objectivity of implementation and improve the planning of the Indian power system.
Technology testing: Accelerating SMR deployment will ensure early proof of concept, encouraging organisations across the industry to collaborate in forming commercial programmes for the testing phase. Further, current retired or soon-to-be-retired thermal assets could be assessed for the deployment of smaller reactors since the fundamental concept of electricity generation does not change. Government incentives, tax credits and start-up incubation programmes would help diversify operations and maintenance contracts, expand the pool of nuclear-grade suppliers, and thus, accelerate nuclear development in the country.
Increased financing: If private sector participation grows, the financing and lending communities will need to be strengthened for technology evaluations, operations and capital deployment tracking to avoid cost runs. Private sector financing and international capital will need to be mobilised through bilateral agreements.
Waste disposal: Current waste disposal methods are expensive and time-consuming. With the increase in nuclear power capacity, more aggregated waste disposal techniques will need to be adopted. India must also have dedicated waste disposal zones across the country.
Skill development: Globally, most of the expertise required to operate nuclear power plants is in the European nations, Canada and Russia. In India, there is a significant talent gap in the design, development, erection and commissioning of nuclear power stations. With the development of SMRs, a large pool of a technically skilled workforce within the country will be necessary. Further, strategic planning to enhance the talent base will be critical.
Somesh Kumar
Private sector participation in India’s nuclear energy sector faces regulatory, financial and technological challenges. India’s Atomic Energy Act, 1962 currently restricts nuclear power generation to government-owned enterprises, allowing only NPCIL and BHAVINI to develop and operate plants. While the 2016 amendment permitted public sector joint ventures, direct private sector and foreign investment in nuclear power generation remains prohibited.
Key challenges include:
Regulatory reforms: Amending the Atomic Energy Act to allow controlled private sector involvement in areas such as reactor construction, fuel cycle services and project financing
is necessary.
High capital costs and long payback periods: Nuclear projects have long construction timelines and high interest costs, making them financially less attractive without government-backed risk-sharing mechanisms and financing incentives.
Technological barriers and supply chain constraints: While Indian firms such as Larsen & Toubro, Bharat Heavy Electricals Limited and Tata Projects contribute to nuclear infrastructure, scaling up the indigenous manufacturing of reactor components and developing advanced reactor designs such as SMRs will require technology transfer partnerships and R&D investments.
Nuclear liability concerns: The CLND Act, 2010 places liability on plant operators, deterring potential investors. Revising liability provisions to introduce shared responsibility models can encourage private participation. To attract private sector involvement, the government must provide financial incentives (for instance, viability gap funding and tax breaks), create a robust regulatory framework, and support R&D in next-generation nuclear technologies. Encouraging PPPs in nuclear component manufacturing, SMRs and hydrogen production will also be key to ensuring a sustainable and investable nuclear sector.
Amit Sharma
While the nuclear sector holds immense potential, unlocking private sector participation will require key regulatory and financial reforms, such as:
Longer project timelines: Nuclear power plants take years to develop, from planning and approvals to construction and commissioning. Speeding up approvals and adopting modular construction techniques can help reduce timelines.
Regulatory approvals: The nuclear sector operates under strict regulatory oversight to ensure safety and compliance. Streamlining approval processes while maintaining safety standards will be essential.
Supply chain readiness: Expanding nuclear capacity will require a strong domestic supply chain for reactor components, fuel and specialised equipment. Encouraging local manufacturing and technology partnerships will be crucial.
Skilled workforce: Nuclear power requires highly specialised skills in design, construction, operation and safety. Large-scale expansion will necessitate investments in training and skill
development.
Public perception and awareness: Nuclear energy has historically faced concerns regarding safety. Transparent communication, awareness programmes and community engagement will be important to gain public trust and support.
Availability of suitable land/sites for nuclear power installations: Identifying and securing land requires strong policy support from both central and state governments, along with local community acceptance, to ensure smooth project execution.
Availability of water for nuclear power plant operations: Since nuclear power plants require a continuous water supply for cooling, coastal locations should be considered to mitigate water availability concerns.
Long-term fuel purchase agreements: Ensuring a stable supply of uranium through agreements with international suppliers and promoting the early adoption of thorium-based reactors will be essential for sustained nuclear power generation.
Enhanced participation of private players: Greater involvement of private companies in technology development, construction and operations will accelerate progress towards nuclear capacity targets. Policy and regulatory frameworks should be designed to facilitate private sector participation while maintaining safety and security standards.
The BSR is a promising development in this direction. SMRs like BSR can help accelerate private sector participation by offering scalable, cost-effective and safer alternatives to conventional large-scale nuclear plants. These reactors have shorter construction timelines, lower financial risks and flexible deployment options, making them a viable choice for decentralised power generation and industrial applications.
What is your outlook on the project pipeline, financing and implementation of nuclear projects in the short to medium term?
Anish De and Abirbhav Mukherjee
It is premature to comment on the project’s outlook at this stage until tangible actions are taken to address legal concerns, particularly the amendment to the CLND Act. Additionally, projects will significantly depend on the cost of funds. According to the International Energy Agency, financing costs for nuclear projects remain prohibitively high on a global scale, with a weighted average cost of capital of 8 per cent. It is essential to maintain the levellised cost of electricity from nuclear power at levels comparable to alternatives to maintain acceptability within the industry. That said, it must be recognised that various forms of energy are complementary, and the decision should not be based solely on costs. We need regulatory and procurer maturity to achieve a balanced approach.
De-risking is essential to bring costs down. The government should intervene by providing sovereign guarantees or de-risking mechanisms for new build-outs or innovative nuclear technologies. We can draw lessons from the burgeoning green hydrogen sector, which is progressing well in Oman, where the government is actively providing sovereign equity infusion to facilitate green hydrogen projects. The federally supported hydrogen hub model in the US has also proven successful, attracting private sector interest in developing a comprehensive hydrogen value chain. Similarly, Japan’s Contracts for Difference (CFD) proposal is aiding Japanese companies in establishing overseas green hydrogen facilities, ensuring a market in Japan with government support. The UK’s Offshore Wind CFD is another exemplary case. Such de-risking mechanisms should be promoted for the Indian nuclear industry as well.
Harsh Kanani
India has now entered the second stage of its three-stage nuclear programme. In March 2024, the country witnessed the historic unveiling of its first fast breeder reactor (FBR) of 500 MWe capacity. Upon approaching criticality, it will contribute to the country’s energy generation. Two more reactors featuring Russian technology are expected to be commissioned in 2025.
NTPC has planned a 30 GW capacity expansion with a whopping $62 billion investment. Following the recent budget announcement, the government is also expecting an influx of private investments totalling $26 billion, which are expected to come from Reliance Industries, Adani Power, Tata Power, Vedanta Limited and other corporate giants. With these companies pledging an estimated $5.3 billion each, India expects to add 11 GW to its installed capacity
by 2040.
Indian companies have made bold financial commitments to sustain the momentum around nuclear energy. To support these initiatives, significant amendments to the CLND Act, 2010 have been proposed under the budget, which would attract greater foreign and private investment in the
nuclear sector.
India is advancing SMR technology, but exploring micro-modular reactors could be transformative. Imagine a truck-sized reactor, installed in an office basement, supplying uninterrupted power for years without human intervention – a game changer for decentralised energy!
Somesh Kumar
In the short to medium term (2024-35), India’s nuclear power expansion will be driven by the fleet-mode deployment of 700 MW PHWRs, technology exploration for SMRs, and early-stage policy development to enable private sector participation. The current pipeline includes 15.3 GW under construction, with projects such as Kaiga 5 and 6, Gorakhpur, Kudankulam 3-6, and Mahi Banswara 1-4 progressing at various stages.
Key trends shaping the sector:
Fleet-mode deployment: The 2017 decision to build 10 PHWRs in the fleet mode will reduce costs and accelerate implementation, benefiting from economies of scale and standardised designs.
Financing challenges and solutions: Nuclear projects remain capital-intensive, requiring sovereign-backed loans, blended finance and international collaborations (such as with Russia, France, the US and Japan). The government could explore low-cost credit mechanisms through institutions such as the Indian Renewable Energy Development Agency and REC Limited, and global climate finance funds.
Exploration of SMRs: The government is actively evaluating SMRs, which offer lower capital costs, modular scalability and enhanced safety features. These reactors can support industrial decarbonisation and hydrogen production, creating new investment opportunities.
Regulatory evolution and private participation: While full private ownership of nuclear power plants is unlikely in the near term, incremental reforms may allow greater private sector involvement in supply chains, construction and new reactor designs.
While India’s nuclear sector is poised for significant growth, overcoming regulatory, financial and technological challenges will be critical to meeting the 100 GW target. A stronger policy push, financial innovation and increased private sector collaboration will determine the success and pace of nuclear power expansion in India.
Amit Sharma
In the short to medium term, we expect:
- A growing pipeline of projects, with an increased focus on indigenous nuclear technology, including PHWRs and SMRs like the BSR.
- Policy-driven financing mechanisms, including PPPs, multilateral funding, and green finance instruments to de-risk investments.
- Technological advancements and digitalisation to improve project efficiency, safety and life cycle
cost management.
TCE has been an engineering partner in India’s nuclear programme for decades, and we remain committed to supporting the development of next-generation nuclear technologies. Our expertise in design, safety and project execution positions us well to contribute to India’s nuclear energy transition.