What Happened
- The Union Budget 2026-27 extended the basic customs duty (BCD) exemption on imports of capital goods required for nuclear power projects until 2035, covering all nuclear plants regardless of capacity.
- The exemption reduces BCD to zero on goods under HS codes 8401 30 00 (non-irradiated fuel elements/metal cartridges with fissile material) and 8401 40 00 (control rods, protection absorber rods, burnable absorber rods — critical reactor components).
- This duty exemption is accompanied by the recently enacted SHANTI Act (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India), 2025, which opens the nuclear sector to private participation for the first time.
- The combined measures aim to accelerate India toward its target of 100 GW of nuclear capacity by 2047.
- Previously, the exemption applied only to specific projects; the expansion now covers all nuclear plants including small modular reactors (SMRs) and large reactors.
Static Topic Bridges
India's Three-Stage Nuclear Programme
India's civil nuclear programme is structured around a unique three-stage strategy developed by Dr. Homi J. Bhabha in the 1950s to utilise India's abundant thorium reserves while managing its limited uranium deposits. The programme is implemented by the Department of Atomic Energy (DAE) and its constituent organisations.
- Stage 1: Pressurised Heavy Water Reactors (PHWRs) using natural uranium fuel; produce plutonium as a by-product
- Stage 2: Fast Breeder Reactors (FBRs) using plutonium from Stage 1 as fuel; breed more fissile material (including U-233 from thorium blanket); Prototype FBR at Kalpakkam (PFBR) — India's first FBR
- Stage 3: Advanced Heavy Water Reactors (AHWRs) or thorium-based reactors using U-233 bred in Stage 2; India's thorium reserves (~25% of world's known reserves) provide near-unlimited fuel
- Department of Atomic Energy (DAE): Established 1954 under direct charge of the Prime Minister; administers NPCIL, BHAVINI, BARC, AERB
- Nuclear Power Corporation of India Limited (NPCIL): Operates all commercial nuclear plants in India (22 reactors, ~7.5 GW installed capacity as of 2025)
- Atomic Energy Commission (AEC): Apex policy body under DAE; Chairman = Secretary, DAE
- Atomic Energy Regulatory Board (AERB): Independent nuclear regulator; given statutory recognition by SHANTI Act 2025
Connection to this news: The duty exemption and SHANTI Act together signal a policy pivot from the slow, state-dominated Stage 1/2 progression toward aggressive capacity addition — incorporating SMRs and large reactors in parallel — to hit the 100 GW target.
SHANTI Act, 2025 — Opening Nuclear to Private Participation
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act, 2025 is landmark legislation that replaced the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act (CLNDA), 2010. It fundamentally restructures India's nuclear legal framework.
- Repeals: Atomic Energy Act, 1962 and Civil Liability for Nuclear Damage Act, 2010
- Private sector entry: Allows private companies to participate in plant operations, power generation, equipment manufacturing, and fuel fabrication (uranium enrichment up to a threshold; sensitive activities remain under government)
- Liability framework: Replaces fixed statutory cap on operator liability with a graded liability structure based on plant type and capacity
- AERB given statutory recognition: Previously a subordinate body under DAE; now has independent statutory basis
- Civil liability reform: Removed the controversial Clause 17(b) of CLNDA that allowed operators to sue suppliers — a key obstacle to US and foreign nuclear suppliers entering India
- Relevant to Indo-US civil nuclear cooperation (123 Agreement, 2007): Resolves a long-standing liability deterrent for US companies like Westinghouse
- India's Small Modular Reactor (SMR) mission: Part of the broader nuclear push; SMRs have lower capital costs and faster deployment timelines
Connection to this news: The custom duty exemption makes capital goods cheaper for both public-sector NPCIL projects and new private players entering under the SHANTI Act. Together they constitute the "hardware + software" of India's nuclear expansion policy.
India's Nuclear Energy Targets and Energy Mix
India's energy mix is dominated by thermal (coal) power, but nuclear is identified as a key baseload option for decarbonisation, alongside renewables. Nuclear is also critical for industrial process heat, AI data centres, hydrogen production, and semiconductor manufacturing — all energy-intensive sectors in India's growth plan.
- Current nuclear capacity: ~7.5 GW (22 reactors operational as of 2025)
- Target: 100 GW nuclear by 2047 (India@100)
- India's NDC (Nationally Determined Contribution) under Paris Agreement: 50% of cumulative electricity from non-fossil sources by 2030; net-zero by 2070
- Nuclear's share in electricity mix: ~3% currently — to grow substantially under the 100 GW target
- Tarapur Atomic Power Station: India's oldest; commissioned 1969
- Kudankulam Nuclear Power Plant (KNPP): Russian-designed VVER reactors; largest nuclear plant in India
- PFBR Kalpakkam: Stage 2 reactor; commissioning delayed to 2025-26
- INDCs and nuclear: Nuclear recognised as clean energy in India's climate commitments
Connection to this news: The duty exemption removes a cost barrier for capital-intensive nuclear projects at exactly the moment when the legal framework (SHANTI Act) enables faster scale-up. Both are needed to move from 7.5 GW to 100 GW.
Key Facts & Data
- Customs duty exemption: Extended to 2035; applies to all nuclear plants (not just specific projects)
- HS codes covered: 8401 30 00 (fuel elements) and 8401 40 00 (control and absorber rods)
- SHANTI Act 2025: Replaces Atomic Energy Act 1962 and CLNDA 2010
- India's current nuclear installed capacity: ~7.5 GW (22 reactors)
- Target: 100 GW nuclear capacity by 2047
- NPCIL: Operates all commercial nuclear plants; government-owned
- DAE established: 1954; under direct charge of Prime Minister
- PFBR (Stage 2): Prototype Fast Breeder Reactor at Kalpakkam — first of its kind in India
- India's thorium reserves: ~25% of world's known thorium (for Stage 3 programme)
- Nuclear's share in India's electricity mix: ~3% (as of 2025)
- Nuclear Energy Mission (earlier): Limited to SMRs; Budget 2026 extension covers all reactor sizes