For nearly seven decades, building a nuclear reactor in India was something only the government could do. The SHANTI Act has changed that and private companies can now enter a sector that was closed to them for as long as the sector has existed. Whether they actually will is a separate question and the arithmetic behind India’s 100-GW nuclear target explains why it is a difficult one.
India currently has 8.78 GW of nuclear power capacity, which the government expects to increase to around 22 GW by 2031-32 as projects already under implementation are completed. Nuclear Power Corporation of India Ltd (NPCIL) is then expected to add another 32 GW by 2047, taking its contribution to around 54 GW.
The remaining 46 GW is expected to come from other central and state public-sector companies, private players and joint ventures operating under different business models, according to the Department of Atomic Energy (DAE).
Private investment is therefore not expected to account for the entire 46 GW. But reaching the 100-GW target without substantial private capital will be difficult, particularly given the size and speed of capacity addition envisaged.
The passage of the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act has removed one of the biggest barriers by allowing wider private-sector participation in nuclear power. The next question is whether other compliance mechanisms have been eased around the projects to make them more commercially viable.
Multi-billion-dollar problem
Nuclear power is among the most capital-intensive forms of electricity generation.
Tata Consulting Engineers (TCE) managing director and chief executive Amit Sharma estimates investment at more than $3 million per MW, implying that a 2,000-MW nuclear facility could cost around $6 billion. As per Sharma, that investment threshold by itself limits the pool of companies capable of building conventional large reactors.
Sharma expects state-owned NTPC and perhaps one or two large corporate groups to have the financial strength required for such projects. TCE is already working with entities including JSW, Reliance Industries and the Bajaj Group group on feasibility studies and other nuclear-related work, he told PTI.
The financing challenge is compounded by long construction periods. DAE says nuclear power projects typically require 10-12 years for construction, meaning developers can spend years servicing debt before generating electricity and revenue.
For a private investor, delays in land acquisition, approvals, reactor construction or commissioning can therefore translate directly into a higher cost of power. This makes financing terms and risk-sharing particularly important.
The tariff question
The SHANTI Act may have opened the door, but several numbers needed to decide whether a project is commercially viable are still missing.
Industry participants are seeking clarity on how nuclear tariffs will be fixed, what returns developers can earn and what financial and technical qualifications operators will need to meet. Companies have also sought details on fuel arrangements, fuel reprocessing and exclusion-zone requirements.
These questions go to the heart of project financing.
A company committing billions of dollars to a reactor needs visibility on who will buy the electricity, whether long-term power purchase agreements will be available and how financing and construction costs will be reflected in tariffs.
The issue is particularly important because nuclear competes in an Indian electricity system where renewable-energy tariffs have fallen sharply over the past decade.
Nuclear offers something different: reliable, round-the-clock low-carbon electricity but private developers will still need sufficient certainty that revenues over the plant’s operating life justify the large upfront investment.
The rules governing India’s newly opened nuclear sector are currently under consultation. Industry participants have until September 4 to submit comments, with the final framework expected after the consultation process.
Until those commercial details are settled, expressions of interest may not necessarily translate into final investment decisions.
Fuel supply and regulatory clarity remain critical
Investors will also want certainty over something more fundamental: whether their reactors will have fuel throughout their operating lives.
Sharma told PTI that the government would need to ensure a steady supply of nuclear fuel for private projects, arguing that such assurance would be essential for companies committing large amounts of capital.
He also called for a more independent regulatory architecture, saying India needed to move beyond the existing Atomic Energy Regulatory Board framework.
These issues matter because a nuclear power plant differs from most conventional infrastructure projects.
A developer is dependent not only on construction approvals and electricity regulation but also on access to nuclear technology, fuel, specialised facilities and a tightly controlled supply chain.
That makes the role of the DAE particularly important even as private participation increases.
Sharma presented that the department should increasingly concentrate on strategic nuclear objectives while enabling private companies to take a larger role in electricity generation. “DAE was formed for national strategic objectives, not to produce electricity… It should retain that core identity and let the private sector completely work on nuclear (energy),” Sharma told PTI.
He then went on to compare the upcoming transition of India’s nuclear energy landscape with the space sector, where the government has increasingly tried to build a private ecosystem around the Indian Space Research Organisation. Facilities such as laboratories at the Bhabha Atomic Research Centre should also be made available to private players for testing technologies and concepts, he said.
Such access could become important if India wants private participation to extend beyond financing and construction into domestic nuclear technology and engineering.
SMRs could offer an easier entry
The first large wave of private nuclear investment may also not come through multi-gigawatt power stations.
Small modular reactors (SMR) could offer a more manageable entry point.
BARC is developing a 220-MW Bharat Small Modular Reactor and a 55-MW SMR, while the government wants at least five indigenous SMRs operational by 2033.
The DAE has explicitly identified the 220-MWe BSMR-200 and 55-MWe SMR-55 for applications including replacing retiring fossil-fuel generating capacity, captive generation for energy-intensive industries and off-grid applications in remote locations.
The estimated outlay for development and construction of the BSMR-200 is Rs 5,960 crore, while development and construction of two SMR-55 units is estimated at Rs 7,000 crore. The DAE estimates construction of these SMRs at 60-72 months from receipt of financial approval.
These are still substantial investments, but the smaller unit size could create different commercial models.
Consider a steel producer. Its primary business remains selling steel, not electricity. But steelmaking requires a large and continuous supply of power. A company considering a captive nuclear generating unit could therefore compare the cost of producing electricity for its own industrial operations with the long-term cost of buying electricity from the grid or generating it from other sources.
In that model, the nuclear facility is supporting the industrial business rather than being built primarily to sell electricity to a state distribution company.
Sharma told PTI that nuclear generating capacity of around 200-300 MW could also be relevant to captive-power users and data-centre operators. Separately, TCE says a hyperscale data centre can require roughly 100-300 MW of continuous power, illustrating why such loads could potentially be matched with smaller nuclear generating units.
The DAE is also considering smaller reactors for brownfield locations, including the repurposing of retiring fossil-fuel power sites. That could produce a very different private nuclear market from India’s existing model of large, predominantly state-developed nuclear power stations.
Sharma told PTI that capacity of around 200-300 MW could also interest captive-power users and data-centre operators. That could create a different private nuclear market from India’s existing model of large, predominantly state-developed nuclear power stations.
Technology could determine the pace
Capital is not the only constraint. Private developers will also need clarity on which reactor designs they can deploy. The government’s roadmap envisages a combination of indigenous 700-MW Pressurised Heavy Water Reactors, imported large reactors and smaller advanced technologies.
However, the draft regulatory framework requires imported reactor designs to have licensing and operational certifications from their country of origin, along with separate approval from India’s nuclear regulator.
Industry experts interviewed by Reuters have warned that such requirements could make it harder to introduce newer reactor technologies, particularly SMRs that have not yet accumulated a long commercial operating record internationally.
That creates a trade-off for policymakers.
Safety requirements for nuclear plants inevitably need to be stringent. But approval processes that become excessively long or rule out emerging technologies could push project timelines further out and raise financing costs.
Adding pressure on the situation, the problem comes with a demanding timeline set by the government. Nuclear power capacity is targeted to rise from 8.78 GW currently to 100 GW by 2047, while the DAE says nuclear power projects typically require 10-12 years for project development and construction.
Many of the projects expected to contribute to the 2047 target will therefore have to enter development well before that date.
Opening the sector was only the first step
India’s nuclear reforms have addressed an important structural constraint by creating a legal route for private participation in activities that had historically remained overwhelmingly under government control.
Corporate interest is already visible. But feasibility studies and expressions of interest are very different from financial closure.
Developers of large nuclear power projects will need greater certainty over tariffs, long-term electricity offtake, financing conditions, licensing timelines and the allocation of construction risk. Developers considering smaller captive nuclear facilities will additionally need workable arrangements for technology, fuel and access to India’s specialised nuclear infrastructure.
Most importantly, private companies are not being asked to fill the entire non-NPCIL capacity requirement themselves. The latest government roadmap envisages roughly 45 GW being developed collectively by other central and state public-sector enterprises, private companies and joint ventures.
The SHANTI Act has created the legal framework that allows private companies to participate. Whether significant private capital actually enters nuclear power will depend on whether the rules that follow can turn that permission into projects investors are willing to finance