India grants retrospective custom duty relief on imports of select nuclear power generation equipment

The Union Government has granted retrospective customs duty relief on specified nuclear power generation equipment imported between April 1, 2019 and January...

What Happened

The Union Government has granted retrospective customs duty relief on specified nuclear power generation equipment imported between April 1, 2019 and January 31, 2026.
The move exempts eligible importers from any duty demands that may have arisen for this period, providing legal certainty and regularising past shipments used in nuclear power projects.
The relief applies to equipment categories covering critical components such as Reactor Pressure Vessels (RPVs), Steam Generators (SGs), Pressurizers, Turbines, and related equipment for Light Water Reactors set up with foreign cooperation.
This action follows Budget 2026-27, where the Finance Ministry extended prospective customs duty exemptions on nuclear power project imports until 2035 (for eligible imports registered up to September 30, 2035).
The combined effect — retrospective relief (2019–2026) plus prospective exemption (to 2035) — creates a long-term, stable duty regime for nuclear power project imports, reducing project costs and per-unit electricity costs.

Static Topic Bridges

Atomic Energy Legislation in India — From AEA 1962 to SHANTI Act 2025

For over six decades, nuclear energy in India was governed by the Atomic Energy Act, 1962, which restricted all nuclear power generation and related activities exclusively to the Central Government or government-owned companies. The Department of Atomic Energy (DAE) under the Prime Minister's Office held supreme authority. This architecture excluded private sector participation in nuclear power.

In December 2025, Parliament enacted the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025, which repeals the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, replacing both with a modernised, consolidated framework.

SHANTI Act, 2025 passed by both Houses of Parliament on December 18, 2025.
For the first time, private companies may build, own, operate, and decommission nuclear power plants in India under the SHANTI Act.
Core sovereign functions — enrichment of nuclear material, production of heavy water, management of spent fuel beyond on-site storage — remain with the Central Government (DAE).
The Atomic Energy Regulatory Board (AERB) receives formal statutory recognition as an independent regulator under SHANTI (it previously functioned under delegated authority of the AEA 1962).
Civil liability: SHANTI removes supplier liability (previously under CLND Act 2010), aligning India with the Vienna Convention on Nuclear Liability; plant operators alone bear compensation responsibility.

Connection to this news: The retrospective duty relief is consistent with the broader policy shift signalled by SHANTI — making nuclear power commercially viable by reducing capital costs, encouraging both public and newly eligible private investors to proceed with projects.

Nuclear Power Corporation of India Limited (NPCIL) and DAE

NPCIL, incorporated in 1987 under the Companies Act, is the primary government enterprise for nuclear power generation. It operates under administrative control of the DAE. As of early 2026, NPCIL operates 24 nuclear reactors at seven locations, with a total installed capacity of approximately 8,180 MWe (megawatt electric).

India's long-term nuclear capacity target: 100 GW by 2047 (Viksit Bharat energy vision), up from current ~8.2 GW.
Intermediate target: ~22.5 GWe by 2031 (reaffirmed by DAE in February 2025).
Reactor types operated by NPCIL: Pressurised Heavy Water Reactors (PHWRs) — indigenous design; and Light Water Reactors (LWRs) set up under bilateral cooperation (e.g., Kudankulam with Russia, Jaitapur with France).
BHAVINI (Bharatiya Nabhikiya Vidyut Nigam Limited) handles Fast Breeder Reactors (FBRs) — second stage of India's three-stage nuclear programme.
India's three-stage nuclear programme: Stage 1 (PHWRs using natural uranium) → Stage 2 (FBRs using plutonium + thorium) → Stage 3 (Advanced Heavy Water Reactors using thorium-U233 cycle). India is the only country with a thorium-based Stage 3 plan.

Connection to this news: Many of the nuclear projects importing equipment between 2019 and 2026 are NPCIL's expansion projects (e.g., Kudankulam Units 3–6, Gorakhpur HAPP). Retrospective duty relief directly reduces pending duty demands on these capital-intensive projects.

Customs Duty — Retrospective vs Prospective Relief

Customs duty in India is levied under the Customs Act, 1962 and the Customs Tariff Act, 1975, administered by the Central Board of Indirect Taxes and Customs (CBIC) under the Finance Ministry. Import duty on capital goods for power projects can significantly inflate project costs.

Retrospective exemption means the government waives duty demands already raised (or potentially raisable) for past imports — it cannot be used to claim refunds on duty already paid, but shields importers from pending or future demands for that period.
Prospective exemption (Budget 2026-27, extended to 2035): applies to new imports registered before September 30, 2035 for nuclear power projects.
Zero customs duty on nuclear power project equipment results in: (a) reduced capital expenditure per MW, (b) lower levelised cost of electricity (LCOE), and (c) improved project viability — critical when nuclear plants require 10–15 year gestation periods.
Equipment covered: Reactor Pressure Vessels, Steam Generators, Pressurizers, Turbines, and related LWR components (typically imported from Russia, France, South Korea, USA under bilateral civil nuclear agreements).

Connection to this news: The retrospective relief period (April 2019 – January 2026) corresponds to the active import phase for LWR projects under construction; the exemption removes the overhang of potential duty demands that had created uncertainty for project developers.

India's Civil Nuclear Agreements and Energy Security

India is a signatory to the Nuclear Non-Proliferation Treaty (NPT) — [Unverified: India has not signed the NPT; it is a de facto nuclear weapons state outside the NPT]. India's civil nuclear programme was brought into the international mainstream via the India-US Civil Nuclear Agreement (123 Agreement) of 2008 and the subsequent India-specific IAEA safeguards agreement, which granted India access to civil nuclear trade without being an NPT signatory.

India has bilateral civil nuclear agreements with USA, France, Russia, UK, Japan, Australia, Canada, South Korea, and others.
Nuclear fuel imports (uranium) are sourced from Russia, France, Kazakhstan, and other countries.
India is not a member of the Nuclear Suppliers Group (NSG), but trades under the 2008 NSG waiver.
Kudankulam Nuclear Power Plant (Tamil Nadu) — built with Russian VVER-1000 technology — is India's single largest nuclear power plant; Units 1 & 2 operational, Units 3–6 under construction.
Energy security rationale: nuclear power provides baseload electricity without carbon emissions, reducing dependence on coal (which is also substantially imported).

Connection to this news: Duty relief on imported nuclear equipment — which comes from countries with which India has civil nuclear agreements — reinforces the strategic logic of these bilateral deals by making the resulting projects cost-competitive.

Key Facts & Data

Retrospective duty relief period: April 1, 2019 to January 31, 2026
Prospective exemption (Budget 2026-27): imports registered up to September 30, 2035
SHANTI Act, 2025 passed: December 18, 2025 — repeals Atomic Energy Act, 1962 and CLND Act, 2010
NPCIL installed nuclear capacity (early 2026): ~8,180 MWe across 24 reactors at 7 locations
India's nuclear capacity target: 100 GW by 2047; intermediate target ~22.5 GWe by 2031
Equipment categories: Reactor Pressure Vessels, Steam Generators, Pressurizers, Turbines (LWR components)
Administering ministry: Department of Atomic Energy (under Prime Minister's Office)
Customs administration: CBIC under Ministry of Finance
India-US Civil Nuclear 123 Agreement signed: 2008
India-specific NSG waiver: September 2008
Three-stage nuclear programme: PHWRs → FBRs → Advanced HWRs (thorium cycle)