The government is likely to announce a dedicated Production Linked Incentive (PLI) scheme for manufacturing critical nuclear components, in the upcoming Union Budget, as part of efforts to strengthen India’s domestic nuclear supply chain and support long-term capacity expansion, a government official said on the condition of anonymity.
People aware of the discussions said the incentive outlay being examined is in the range of ₹18,000-20,000 crore, though final approvals, timelines and eligibility criteria are yet to be firmed up.
The move follows opening up of the sector to the private sector via the recently enacted Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, with caps on accident-related penalties on equipment suppliers.
The proposed PLI scheme is expected to focus on heavy forgings, reactor pressure vessels, specialised steel alloys and other high-integrity nuclear components, which currently face long gestation periods due to limited domestic manufacturing capacity.
“The objective is to address supply-side constraints in nuclear manufacturing and build domestic capabilities required to support India’s long-term nuclear programme,” the official said, adding that existing domestic capacities are not adequate for large-scale or fleet-mode expansion.
The scheme is expected to focus on localisation, capacity creation and reducing lead times for critical nuclear equipment, which are currently key bottlenecks in project execution.
India has outlined 100 GW of nuclear power capacity by 2047 as part of its long-term clean energy and energy security strategy. Officials said strengthening domestic manufacturing is seen as critical to achieving this target, given the scale of equipment and component requirements involved.
“Incentivising the domestic supply chain is necessary if nuclear capacity is to scale meaningfully over the coming decades,” the official said. “Without adequate manufacturing depth, project timelines and costs remain exposed.”
Focus on supply chain and SMRs
According to the official, the proposed PLI would enable Indian manufacturers to scale production, reduce dependence on imports and shorten execution timelines. The move is also aligned with India’s plans to expand deployment of Small Modular Reactors (SMRs), which require standardised manufacturing and a reliable vendor ecosystem.
“At present, capacities for nuclear-grade components are limited. A structured incentive framework is being examined to enable industries to invest with long-term visibility,” the official said.
The intent, the official added, is to transform India from a buyer of nuclear equipment into a manufacturing base capable of supplying domestic projects and global markets.
Policy backdrop: SHANTI Act
The proposed incentive is being discussed alongside the SHANTI Act, which provides a long-term policy framework to strengthen India’s nuclear power ecosystem. The Act aims to improve regulatory clarity, support capacity expansion across the nuclear value chain and reinforce nuclear energy’s role in India’s clean energy and energy security strategy.
Industry participants said that if a manufacturing-focused PLI for nuclear components is implemented alongside the SHANTI Act, it could accelerate localisation of critical equipment, reduce execution risks and provide the demand visibility required for domestic manufacturers to invest in nuclear-grade production capabilities.
Industry view
KL Bansal, chairman and managing director of DEE Development Engineers, said the proposed PLI could mark a turning point for the sector.
“The PLI support for nuclear power could be a defining inflection point for India’s nuclear manufacturing ecosystem. Large-scale, long-term visibility on demand will encourage domestic fabrication, localisation of critical components, and capacity expansion across the supply chain. Alongside this, policy signals such as the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act reinforce the government’s long-term commitment to the sector and help build industry confidence around sustained investment and participation.”
Bansal added that engineering-led industries require clarity and scale to commit capital.
“For engineering-led industries, such a move would encourage investments in high-integrity manufacturing, specialised materials, and advanced fabrication capabilities that are essential for nuclear applications. More importantly, a well-structured PLI framework can reduce entry barriers for new participants, crowd in private investment, and help India build a globally competitive nuclear manufacturing base aligned with the country’s energy security and decarbonisation goals.”
Next steps
The official said discussions on the implementation of the PLI scheme are ongoing, and details relating to structure, eligibility and timelines will be finalised following inter-ministerial consultations.
If implemented, the nuclear components PLI would mark a shift towards a manufacturing-led approach to nuclear expansion, aligned with India’s long-term energy security and decarbonisation objectives.