What Happened
- Seema Jain, Member (Finance) at the Department of Atomic Energy (DAE), stated that banking finance and FDI for nuclear power projects are in active planning, with innovative financing measures to ensure adequate capital for the sector.
- The development follows the enactment of the Sustainable Harnessing and Advancement of Nuclear Energy (SHANTI) Act, 2025, which opened India's nuclear sector to private participation and, for the first time, enabled FDI up to 49% in nuclear power projects through joint ventures.
- The Nuclear Energy Mission announced in the Union Budget 2025-26 committed central government funds to develop at least five Small Modular Reactors (SMRs) to be operational by 2033.
- Historically, FDI in atomic energy was prohibited under government policy, making this a transformational shift in India's nuclear financing architecture.
- Innovative financing measures being explored include viability gap funding, green bonds linked to nuclear projects, and public-private partnership structures for new reactor construction.
Static Topic Bridges
India's Nuclear Power Sector — Institutional Architecture
India's nuclear energy sector is governed by the Atomic Energy Act, 1962, which vested all rights over nuclear materials and fissile material in the Central Government. This gave the government and its entities an effective monopoly on nuclear power. The Department of Atomic Energy (DAE) is the nodal department under the Prime Minister's Office. Under it function the Nuclear Power Corporation of India Ltd (NPCIL) — which builds and operates nuclear power plants — and the Atomic Minerals Directorate for Exploration and Research (AMD), Bhabha Atomic Research Centre (BARC), Indira Gandhi Centre for Atomic Research (IGCAR), and others. The Atomic Energy Regulatory Board (AERB) is the independent safety regulator.
- Atomic Energy Act, 1962: prohibits private ownership of nuclear materials; vests ownership in Central Government
- DAE: under PMO; the nodal ministry for nuclear policy
- NPCIL: Government of India enterprise (fully owned); operates 24 nuclear reactors with installed capacity of 7,480 MW (as of 2025)
- India's nuclear power as % of electricity generation: approximately 3% (far below global average of ~10%)
- India's target: 100 GW nuclear capacity by 2047 (Viksit Bharat goal)
- Three-stage nuclear programme (Homi Bhabha Plan): Stage I (Pressurised Heavy Water Reactors using natural uranium), Stage II (Fast Breeder Reactors using plutonium), Stage III (Thorium-based reactors)
- India has the world's largest thorium reserves (~25% of global reserves)
Connection to this news: The planned banking finance and FDI are enabled by a fundamental legislative change — the SHANTI Act breaks the exclusive government monopoly established by the 1962 Act, making it possible to bring private capital into nuclear projects.
The SHANTI Act, 2025 — Transformational Legislative Change
The Sustainable Harnessing and Advancement of Nuclear Energy Act, 2025 (SHANTI Act) was passed by Parliament in December 2025 (Rajya Sabha on December 18, Lok Sabha on December 17) and received Presidential assent on December 21, 2025. It fundamentally restructures India's nuclear energy governance. Key changes: (1) allows private sector participation in nuclear power generation (joint ventures with NPCIL or Government entities); (2) enables FDI of up to 49% in nuclear power projects through JVs; (3) separates the Atomic Energy Regulatory Board (AERB) from DAE, making it a truly independent safety regulator (it was previously under the DAE Secretary's oversight — a conflict of interest noted by international experts); (4) creates a framework for licensing private operators.
- SHANTI Act passed: December 2025 (Rajya Sabha Dec 18; Lok Sabha Dec 17; Presidential assent Dec 21)
- FDI permitted in nuclear power: up to 49% (through JV route, requires government approval)
- AERB: to become independent of DAE under SHANTI Act (previously under DAE — conflict of interest)
- India's nuclear power liability: governed separately by the Civil Liability for Nuclear Damage Act, 2010 (CLND Act) — limits operator liability, provides recourse against suppliers
- CLND Act Section 17(b): gives operator right of recourse against supplier in case of nuclear incident — a provision that had deterred US suppliers
Connection to this news: Banking finance for nuclear projects requires lenders to be comfortable with asset security, regulatory clarity, and liability frameworks — all of which the SHANTI Act attempts to address, making it a prerequisite for the DAE's planned financing measures.
Small Modular Reactors (SMRs) — The Next Generation of Nuclear Technology
Small Modular Reactors (SMRs) are advanced nuclear reactors with an electricity output of up to 300 MWe (compared to conventional large reactors of 1,000–1,600 MWe). SMRs are designed to be factory-manufactured and modular, reducing construction timelines and upfront capital costs — two traditional barriers to nuclear expansion. They can be deployed in locations unsuitable for large reactors, including industrial clusters needing process heat and remote areas. India has a domestic SMR design programme — Bhabha Atomic Research Centre (BARC) has designed a 220 MWe Advanced Heavy Water Reactor (AHWR) and is working on compact SMR designs.
- SMR capacity definition: up to 300 MWe (some define up to 1,000 MWe as small/medium)
- Nuclear Energy Mission (Budget 2025-26): target of 5 SMRs operational by 2033
- BARC SMR programmes: AHWR (thorium-based), Compact High Temperature Reactor (CHTR)
- Global SMR leaders: Rolls-Royce (UK), NuScale (US), CANDU Energy (Canada), Rosatom (Russia, RITM-200)
- India-US 123 Agreement (2008) enabled civil nuclear cooperation, lifting technology restrictions post-Pokhran tests
- India's nuclear capacity target: 100 GW by 2047
Connection to this news: The planned FDI and banking finance are critically important for SMR deployment — the upfront capital for 5 SMRs by 2033 would run into tens of thousands of crores, requiring diverse financing sources beyond government budgetary support.
Key Facts & Data
- SHANTI Act: passed December 2025; enables private participation and up to 49% FDI in nuclear power via JV
- India's current nuclear capacity: 7,480 MW across 24 reactors (NPCIL, as of 2025)
- India's nuclear energy as % of total power generation: ~3%
- India's nuclear target: 100 GW by 2047 (Viksit Bharat goal)
- Nuclear Energy Mission (Budget 2025-26): at least 5 SMRs operational by 2033
- India's thorium reserves: ~25% of global reserves (largest in the world)
- AERB: safety regulator (to be made independent of DAE under SHANTI Act)
- CLND Act, 2010: governs nuclear damage liability; Section 17(b) allows operator recourse against suppliers
- Atomic Energy Act: 1962 (now substantially amended by SHANTI Act 2025)
- India-US 123 Agreement (Civil Nuclear Cooperation): 2008