Science & Technology
India Plans to Allow Private Sector Participation in Nuclear Energy
- 29 Nov 2025
- 14 min read
For Prelims: Nuclear Sector, Small Modular Reactors, Prototype Fast Breeder Reactor, Light Water Reactors (LWRs), Pressurised Heavy Water Reactor, Atomic Energy Regulatory Board (AERB), Nuclear Power Corporation of India Limited (NPCIL).
For Mains: Energy security: role of nuclear power in India’s Net-Zero 2070, Public-private partnerships
Why in News?
The Prime Minister of India announced that the country will soon open its civil nuclear power sector to private players, ahead of the Parliament’s winter session where the Atomic Energy Bill, 2025 will be introduced to expand nuclear capacity and attract private investment.
How can the Private Sector Strengthen India’s Nuclear Power Programme?
- India’s Ambitious Capacity Expansion: India plans to scale nuclear capacity from 8.8 GW to 22 GW by 2032 and 100 GW by 2047, but the sector is still dominated by Nuclear Power Corporation of India Limited (NPCIL), which lack the capital, manpower, and construction capacity needed to meet these ambitious targets.
- Private players can augment capital, skilled workforce, and Engineering, Procurement, and Construction (EPC) capabilities, making large-scale expansion feasible.
- Bridging the Massive Financing Gap: Reaching 100 GW of nuclear capacity by 2047 needs about Rs 15 lakh crore investment, but the 2025–26 Budget allocates only Rs 20,000 crore.
- Nuclear projects demand huge upfront costs, making limited public funds a major challenge and highlighting the need for private investment to mobilise long-term capital, reduce the fiscal burden, and diversify funding sources.
- Accelerating Project Execution: Many NPCIL projects, such as Kudankulam Units 3–6, have faced chronic delays due to procurement issues, slow construction, and administrative hurdles.
- Private players can help speed up projects through better project management and stronger supply-chain efficiency.
- Boosting Technology & Innovation: Private sector involvement can support the adoption of advanced reactor designs, small modular reactors (SMRs), and global collaborations, keys to scaling nuclear capacity and improving safety.
- Strengthening Uranium Supply Chains: Allowing private firms to mine, import, and process uranium can upgrade India’s limited domestic capability, reduce dependence on Government-to-Government (G2G) deals, and build strategic reserves for long-term nuclear fuel security.
- Enhancing India’s Energy Security & Net-Zero Pathway: Private participation helps accelerate low-carbon capacity growth, supporting India’s net-zero 2070 commitments.
- Private sector entry can deepen localisation of reactor components, boost domestic manufacturing, and integrate India into global nuclear supply chains.
India’s Nuclear Energy Landscape
- Nuclear Energy: It is a form of energy released from the nucleus, the core of atoms, made up of protons and neutrons.
- This source of energy can be produced in two ways: fission – when nuclei of atoms split into several parts – or fusion – when nuclei fuse together.
- It is a low-carbon, high-density energy source providing base-load power and contributing to energy security and sustainable development.
- Status in India: As of 2025, India’s current power capacity stands at 8.18 GW, with an ambitious target of 100 GW by 2047.
- Currently, India operates more than 20 nuclear reactors, all managed by Nuclear Power Corporation of India Limited (NPCIL), with over a dozen new projects planned.
- The Nuclear Energy Mission was launched in the Union Budget 2025-26 which is focused on research and development (R&D) of Small Modular Reactors (SMRs).
- India aims to develop at least five indigenously designed and operational SMRs by 2033.
- New technology developments include Bharat Small Reactors (BSRs), Small Modular Reactors (SMRs), Molten Salt Reactors, and High-Temperature Gas-Cooled Reactors.
What are the Major Barriers to Private Sector Participation in India’s Nuclear Power Sector?
- Nuclear Liability Concerns: Section 17(b) of the Civil Liability for Nuclear Damage Act (CLND), 2010 allows the operator a “Right of Recourse” against suppliers after a nuclear accident, unlike the CSC regime where liability rests solely with the operator.
- This potential supplier liability raises insurance costs and makes private participation financially risky.
- Financing and Cost Challenges: According to the Central Electricity Authority, the capital cost of a Pressurised Heavy Water (PHW) nuclear plant in India is expected to rise to around Rs 14 crore per megawatts (MW) by 2026–27.
- Despite its low-carbon profile, nuclear energy is not classified as “renewable,” making it ineligible for tax incentives and green financing, which further adds to its financial challenges.
- Unclear Ownership & Revenue Model: Atomic Energy Act, 1962 has historically restricted private firms from co-owning or operating reactors or selling nuclear-generated electricity, creating major uncertainty about their role and deterring private participation in the sector.
- Fuel Supply & Processing Restrictions: Domestic uranium reserves (approx 76,000 tonnes) can fuel around 10,000 MW for 30 years, but meet only 25% of future needs, making imports essential.
- Private players cannot mine, import or process uranium due to legal restrictions, limiting their ability to control a core project input.
- With India relying heavily on long-term uranium contracts from Kazakhstan, Canada and Uzbekistan, private firms face uncertainty in long-term fuel security if they enter the sector.
- Regulatory & Security Constraints: Nuclear installations have strict security and inspection standards under Atomic Energy Regulatory Board (AERB) and Department of Atomic Energy (DAE). Private firms can face compliance burdens far higher than in power, coal, or renewables.
What Steps Can Enhance India’s Nuclear Power Sector?
- Legislative Reforms: India needs to amend the Atomic Energy Act (1962) to permit private participation in nuclear power generation, and establish clear ownership models.
- Revise the CLNDA (2010) to limit supplier liability, and align with Convention on Supplementary Compensation (CSC, 1997) to enhance investor confidence.
- The government is preparing to introduce the Atomic Energy Bill, 2025 in the upcoming Winter Session of Parliament, which is a significant step in the right direction.
- Develop a Clear PPP Model: Establish transparent frameworks for co-ownership, tariffs, risk-sharing, and long-term power purchase agreements to attract private investment.
- Fuel Security: Strengthen fuel security by securing long-term uranium supplies from countries like Canada, Kazakhstan, and Australia, while accelerating R&D on thorium reactors such as BHAVINI’s PFBR.
- At the same time, build indigenous supply chains and develop nuclear industrial parks to localise critical technologies.
- Speed Up Project Execution: Adopt Engineering, Procurement, and Construction (EPC) -based contracts, improve procurement systems, and involve private EPC firms to avoid delays seen in projects like Kudankulam.
Conclusion
Opening India’s nuclear sector to private players could transform its clean energy landscape, but success will depend on resolving liability issues, clarifying ownership structures, and strengthening the regulatory framework. The Atomic Energy Bill, 2025 marks a major step, but the sector’s future will hinge on how well the policy balances safety, investment, and long-term energy security.
|
Drishti Mains Question: Examine the need for legislative reforms in India’s nuclear sector to enable private participation while safeguarding safety and liability? |
Frequently Asked Questions (FAQs)
Q. What is nuclear energy?
Nuclear energy is the energy released from the nucleus of an atom through fission (splitting) or fusion (combining), with all commercial electricity today produced through fission.
Q. Which isotope is primarily used as fuel in nuclear reactors?
Most reactors use Uranium-235, a fissile isotope that constitutes less than 1% of natural uranium.
Q. How does a nuclear power plant produce electricity?
Heat from fission converts water into steam, which spins turbines connected to a generator, producing electricity—similar to thermal power plants but with no CO₂ emissions from operation.
Q. What is the Nuclear Fuel Cycle?
It is the sequence of industrial processes from uranium mining → enrichment → fuel fabrication → reactor use → spent fuel storage → reprocessing or disposal.
Q. Why is uranium enrichment necessary?
Natural uranium contains only 0.7% U-235, which is insufficient for sustained fission; enrichment increases U-235 concentration to 3–5% for reactor fuel.
UPSC Civil Services Examination, Previous Year Question (PYQ)
Prelims
Q. In India, why are some nuclear reactors kept under “IAEA safeguards” while others are not? (2020)
(a) Some use uranium and others use thorium
(b) Some use imported uranium and others use domestic supplies
(c) Some are operated by foreign enterprises and others are operated by domestic enterprises
(d) Some are State-owned and others are privately owned
Ans: (b)
Q. Consider the following statements: (2017)
- The Nuclear Security Summits are periodically held under the aegis of the United Nations.
- The International Panel on Fissile Materials is an organ of the International Atomic Energy Agency.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (d)
Mains
Q. With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. (2018)
Q. Give an account of the growth and development of nuclear science and technology in India. What is the advantage of the fast breeder reactor programme in India? (2017)
