India Forward — 17 September 2025
What are the drivers and prospects for India’s Nuclear Energy Mission?
India must use a holistic approach to achieve its Nuclear Energy Mission goals.
By Mohd. Sahil Ali, Nishtha Jain, Gauri Jauhar, and Ashish Singla
Highlights
India aims to localize its nuclear value chain and use its vast thorium reserves to enhance domestic capacity building and technology transfer. Legislative reforms to liberalize the sector and introduce a transparent and simplified liability framework are anticipated by 2026–27.
Subsidized research and development, market guarantees, and viability funding support are indispensable for nuclear power growth, including for small modular reactors (SMRs). Steep learning in SMR technology and positive-sum bilateral cooperation frameworks will be key to the success of India’s Nuclear Energy Mission.
Nuclear development faces risks, such as geopolitical and geoeconomic uncertainties, competing technologies, unfavorable grid demand patterns, large subsidy requirements, and vulnerability to kinetic and cyber threats. A calibrated, holistic approach is essential to meet Nuclear Energy Mission goals.
In line with India’s commitment to achieve net-zero by 2070, India’s Nuclear Energy Mission set an ambitious goal: to develop 100 GW of nuclear capacity by 2047 from approximately 9 GW today. The 2025–26 budget allocated $2.3 billion for research and development as part of India’s Nuclear Energy Mission, matching the full budget allocation for the Green Hydrogen Mission in fiscal 2023. While India’s nuclear program has traditionally faced structural hurdles, the mission seeks to liberalize core nuclear activity and accelerate technology diffusion through bilateral partnerships. This opens the door for domestic and global firms in the nuclear energy sector, but structural changes in the ecosystem under the Nuclear Energy Mission will take longer than the official timelines indicate.
India’s nuclear energy program evolved with a vision of strategic autonomy
India established the Bhabha Atomic Research Centre in 1954 and began construction of its first boiling water reactor at Tarapur in 1964. The Atomic Energy Act of 1962 gave the government exclusive control over civilian and strategic nuclear development. The Nuclear Power Corp. of India Ltd. (NPCIL) was later founded in 1987 to design, build and operate nuclear power plants.
India’s quest for strategic security with nuclear testing in 1974 and 1998 led to US sanctions, including injunctions related to the supply of civilian nuclear energy technology and fuel. As a result, India sought to develop its own nuclear capabilities and supply chain. The Bhabha Atomic Research Centre remodeled Canadian Deuterium Uranium technology for the Indian pressurized heavy water reactor (PHWR). The PHWR relied on imported uranium, which raised questions of fuel security, such as the risk of sanctions from the Nuclear Suppliers Group.
Work began on a three-stage prototype fast breeder reactor program in the mid-2000s, aimed at utilizing domestic thorium reserves at cost parity with conventional PHWRs. Despite active private participation, long lead times in technology development were experienced. To overcome this, the nuclear energy mission specifically focuses on private capacity building through international partnerships and privatization in core nuclear activity to accelerate nuclear energy development.
Past policy uncertainty on nuclear energy reflects shifting priorities
Despite being recognized as a key civilian and strategic priority, India’s nuclear power program has not reached its full potential. Official nuclear targets have been revised many times. For example, in 2010, India aimed for about 63 GW of nuclear energy by 2031–32. Successive governments slashed targets by almost two-thirds. India’s Nuclear Energy Mission now calls for developing 100 GW of nuclear capacity by 2047, from approximately 9 GW today, and building at least five operational small modular reactors (SMRs) by 2033.
Nuclear energy comprises approximately 2% of India’s total generating capacity. Execution delays and long lead times between planning, construction, testing and commissioning have restricted nuclear energy’s contribution to the supply-side expansion required to fuel India’s electrification goals. While coal has consistently comprised about 75% of the supply, major policy emphasis has been placed on scaling up renewable energy, which has increased India’s dependence on intermediate capital goods from China. The Nuclear Energy Mission carves out space for India to diversify its energy supply chain, aiding energy autonomy.
According to S&P Global Commodity Insights data, India has added only about 4.1 GW of nuclear capacity since 2010, though a significant portion of backlog capacity is expected to be commissioned in the coming decade. About 5 GW is in advanced stages and expected to be commissioned by the early 2030s.
Over the next 15 years, India is set to add about 14.3 GW of nuclear capacity. Of this, 7 GW will be added in fleet mode, referring to installations that are equal in size (700-MW PHWR), technical design parameters and unit characteristics. While this tripling of additions indicates a pending shift in momentum, it also underscores the highly ambitious nature of India’s new nuclear target — 100 GW by 2047 — which will require more than 4 GW of additions per year.
India-US nuclear relationship enters a more focused phase
In 2008, India and the US negotiated the 123 Agreement, under which India agreed to place civilian nuclear facilities under International Atomic Energy Agency safeguards. The US amended its 1954 Atomic Energy Act to facilitate deeper cooperation with India. Following the deal, six 1,000-MW AP1000 reactors were to be developed by Westinghouse Electric Corp. with NPCIL.
However, the US-India partnership has faced unresolved liability and regulatory hurdles. The Indian Civil Liability for Nuclear Damage Act was passed in 2010 to establish a legal framework for liability and compensation in the event of a nuclear accident. It contains provisions on recourse liability for suppliers due to substandard or faulty equipment, potentially allowing the public to initiate liability. These provisions tempered global firms’ interest in the Indian nuclear market. The US government also reacted adversely, reinstating some of its previous restrictions over time.
Toward the end of the Biden administration, India and the US revitalized their civil nuclear cooperation. This momentum has continued under the Trump administration, with the Catalyzing Opportunities for Military Partnership, Accelerated Commerce and Technology (COMPACT) initiative signed in February 2025. Aside from defense and outer space cooperation, COMPACT aims to have US-designed advanced nuclear reactors built in India, including assistance with SMRs.
SMRs favored in India, but questions about commercial viability remain
India is especially interested in SMRs, including smaller non-modular reactors for captive industrial use, and has a domestic program building Bharat small reactors (BSRs) supported by public-private partnerships. India favors SMRs over conventional nuclear due to their advantages:
- Operational safety from advanced passive cooling features
- Fuel efficiency and waste minimization, which lower fuel management costs
- A decentralized and modular nature, which reduces grid congestion
- A reduced land and water footprint and the ability to relocate under stress
- Steady base load generation for continuous quality power requirements
Globally, more than 10 GW of SMRs are under various stages of development, with the US accounting for nearly half of total global capacity, according to S&P Global Commodity Insights data. The only commercially operating SMR plants are in China and Russia.
For the US, SMRs offer a path for clean technology exports, given the country’s saturated renewable supply chain. For the Indian power market, the main concern will be technological viability: While India’s conventional PHWRs cost about a third of US conventional light water reactors, imported or even codeveloped SMRs will be about three times more expensive for India. There are also uncertainties concerning the extent of technology diffusion, the time frame for technological maturity and commercial viability.
What synergies can we expect from new partnerships around India’s Nuclear Energy Mission?
Traditionally, the public sector has been responsible for nuclear development. Companies such as Larsen & Toubro, Tata Consulting Engineers and Reliance Infrastructure have supported noncore nuclear activities, providing construction, civil engineering, site preparation and limited maintenance support.
Under India’s Nuclear Energy Mission, NPCIL has committed to building 50 GW of the country’s 100-GW target. The largest national electricity generator, National Thermal Power Corp. (NTPC), has committed $62 billion to build 30 GW of nuclear capacity. NPCIL and NTPC are also cooperating through their joint venture, Anushakti Vidhyut Nigam Ltd. (ASHVINI). NPCIL has committed 5 billion rupees for a 51% stake. NTPC is investing 10 times that amount in the JV but remains a minority partner in compliance with the Atomic Energy Act.
Exploring private sector manufacturing and demand-side potential
In May 2025, NPCIL placed its largest purchase order, with Megha Engineering & Infrastructures Ltd., making Megha the first private company to receive an engineering, procurement and construction award for core components. The $1.5 billion order for the construction of two 700-MW reactors for the Kaiga power plant sets a precedent for how suppliers will be selected, balancing quality with cost. The aim is to further engage the domestic private sector in the core civilian nuclear supply chain.
On the demand side, NPCIL issued a request for proposals for two 220-MW BSRs for industrial captive consumption at the end of 2024. BSRs are smaller versions of the 700-MW PHWRs that are easier to site near industrial clusters and townships. They are envisaged to replace captive thermal plants with steady, predictable base-load power to help industrial decarbonization. Due to high interest and many inquiries, the request for proposals submission deadline was extended to September 2025.
Civil nuclear cooperation now includes the private sector
The government’s bilateral cooperation with several advanced nuclear markets has intensified in recent years. Key areas of technical assistance include core underlying technology without complete transfer, fuel procurement and spent fuel management. With India’s commitment to liberalizing the civilian nuclear sector, collaboration is taking shape between foreign and Indian private entities, particularly in advanced reactor and fuel technologies, including SMRs.
In late 2024, US-based Clean Core Thorium Energy offered its advanced nuclear energy for enriched life (ANEEL) fuel technology to improve reactor efficiency and allow the blending of abundant domestic thorium. ANEEL is formed by combining thorium with high-assay low-enriched uranium.
In March 2025, the US Energy Department approved Holtec International’s proposal to collaborate with Indian entities on the research and development of its SMR-300 light water reactor. Larsen & Toubro is the lead private sector partner, with the Indian Department of Atomic Energy steering the partnership with Holtec.
Additionally, Electricité de France SA has offered its NUWARD SMR for future codevelopment with Indian partners. International firms are expressing interest in exploring and tapping localization opportunities across the nuclear value chain, which aligns with India’s energy security and diversification vision.
Implementing India’s Nuclear Energy Mission requires changing existing laws
India is open to amending laws that have limited private and foreign participation in its nuclear sector. The Atomic Energy Act would need to be amended to allow private participation in core nuclear activities across the nuclear technology and fuel value chain, including owning or co-owning and operating nuclear plants. This forms the underlying premise on which incipient US-India private partnerships are being formed. A review and licensing board for such activities may become necessary, along with an independent regulatory body that can resolve disputes. Public-private partnerships, which are already encouraged in space-based development, could become a norm rather than an exception to build nuclear domestic capabilities.
The Civil Liability for Nuclear Damage Act caps the liability of the nuclear system operator at 15 billion rupees, or about $171 million, and limits the central government’s liability to up to 300 million special drawing rights, equivalent to approximately $410 million.
However, the key contention arises from the operator’s right of recourse to sue the technology provider without predetermined limits. The wording of the act suggests that it does not bar criminal proceedings against the supplier, which has discouraged foreign players. A detailed review is needed to address the law’s limitations and liabilities.
Looking forward
Implications for India’s net-zero pathway
The 100 GW by 2047 target signals that a big bet has been placed on nuclear power. The immediate focus is on tapping the industrial captive sector alongside the launch of India’s compliance carbon market and the EU’s Carbon Border Adjustment Mechanism. The long-term focus is on achieving India’s net-zero goal by supporting domestic nuclear capabilities through collaboration.
However, structural changes in civil nuclear policy will involve consensus-building and careful planning, which could take years. An official road map for nuclear development in India is still needed. External cooperation is key, but it is unclear how bilateral relations will develop under ever-changing geoeconomic and geopolitical circumstances. SMRs address many of the traditional constraints faced by nuclear power, but the technology is still under development and commercially unproven. Even with a generous estimate, their contribution to the 100-GW target will be relatively small.
In a high-effort scenario under India’s Nuclear Energy Mission, S&P Global Commodity Insights projects five SMRs to be operational by 2040, and the 100-GW target to be achieved by 2060. A delay of about five years in India’s current official target of 22.5 GW by 2031–32 is likely. Private sector additions in the form of SMRs will take place through the 2040s. After the 2040s, larger, privately owned nuclear plants will also be commissioned via both fleet and stand-alone modes. Fleet mode additions are expected to ramp up through the 2040s. The private sector is set to contribute at least 20 GW of total nuclear capacity by 2060. Compared with the pre-mission scenario, additional nuclear capacity under India’s Nuclear Energy Mission could displace 35 GW to 40 GW of coal capacity by 2060, a reduction of 20%-25%.
India’s Nuclear Energy Mission will benefit from a holistic approach
Aside from high initial costs, critical operational questions remain about how to integrate nuclear into the future power system, which will have a high share of variable renewables. India’s conventional nuclear fleet is not suitable for ramping, and while newer generation technologies have that ability on paper, it remains to be tested under Indian grid conditions. Storage-integrated renewables may be a cost-effective alternative by the 2030s, challenging nuclear deployment. The resilience of nuclear infrastructure to wartime threats will also factor prominently in system planning. Comprehensive avoidance and containment plans, along with outreach and confidence-building measures, can help mitigate these risks for stakeholders. Ultimately, the growth of Indian nuclear energy will require the continued navigation of evolving interests and priorities around energy, trade and security.
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This article was authored by a cross-section of representatives from S&P Global and in certain circumstances external guest authors. The views expressed are those of the authors and do not necessarily reflect the views or positions of any entities they represent and are not necessarily reflected in the products and services those entities offer. This research is a publication of S&P Global and does not comment on current or future credit ratings or credit rating methodologies.
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