Viksit Bharat: Why private participation is the key to India’s SMR story

When Reliance and Google activate their hyperscale data centres in Visakhapatnam, the local grid will encounter a thrice the regular demand that intermittent sources cannot satisfy. These facilities require a constant baseload supply, creating a significant challenge for Indian energy planners where international trade partners demand clean energy as a condition for market access, yet domestic sectors like semiconductor fabrication and green hydrogen require firm power to operate optimally. Solar and wind make 50% of India’s capacity mix, but their intermittency cannot alone sustain the precision required by the fourth industrial revolution. Here, nuclear energy fits the bill, delivering clean and uninterrupted baseload to anchor these emerging industries.

The government has taken a commendable first step through the SHANTI Act 2025, opening the space for private entities to build, own, and operate nuclear assets. This legislation signals a significant departure from decades of state-led deployment and provides the legal permission for industrial capital to enter the civil nuclear sector. By modernising the liability framework, the administration has laid the groundwork for a competitive nuclear ecosystem. This move must now be followed by a strategy that integrates Small Modular Reactors (SMRs) as a key technological pivot.  SMRs offer the modularity required for direct co-location with industrial clusters, making them the ideal vehicle for private participation.

A report, Powering the Next Billion, outlines the key constraints and the strategic roadmap for this transition. Currently, first-of-a-kind SMRs face a levelised cost of electricity of $120/MWh, which is approximately 50% higher than the average grid cost. 

What can be the solution?

To manage this disparity without over-reliance on Viability Gap Funding, the report recommends targeted fiscal incentives such as GST reductions, customs duty waivers for core components, and interest subvention for early movers. This framework is designed to move SMRs towards cost competitiveness with average grid prices. The report further recommends that India must aim for the commissioning of at least 25 SMR units to achieve the manufacturing cadence and learning-rate efficiencies necessary to sustain this competitive pricing in the long term. While legal barriers are falling, the physical and regulatory next steps are critical to maintain momentum. Site identification for greenfield projects is historically delayed by technical surveys and assessments that can span years. Therefore, we recommend that India view its hyperpolluting thermal as the low-hanging fruit for rapid nuclear expansion. Our report identifies 11.2 GW of capacity across ageing coal units as prime candidates for Small Modular Reactor transition. These sites already possess established grid interconnections and cooling water infrastructure which can significantly compress deployment timelines. To support this, the Atomic Energy Regulatory Board must implement a single-window clearance system with a strict 180 day timeline to ensure project predictability. Judicial predictability is equally vital because capital will remain on the sidelines if projects are vulnerable to open-ended litigation after securing all statutory clearances.

The path ahead

The ambition of achieving 100 GW of nuclear capacity by 2047 is a direct response to the demands of a high-growth economy that is crucial for the realisation of Viksit Bharat. Success will depend on the synergy between state oversight and the execution agility of the private sector. By creating a predictable regulatory environment and leveraging existing industrial sites, India can secure the firm and clean power required for its industrial ascent. Our report details the specific pathways to achieve these targets by framing private participation as the catalyst for rapid execution and financial depth. This strategic alignment will ensure that the journey towards a developed nation is powered by a reliable and sustainable energy foundation that can compete on the world stage. Ultimately, this nuclear pivot will do more than secure the grid as it establishes India as the defining global vanguard of a clean and prosperous industrial age.

The authors are Consultants at the Centre for Accelerating India’s Growth (CAIG) in the Nation First Policy Research and Change Foundation (NFPRC).

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.