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OPINION DECEMBER 26, 2025 | The Indian Eye 10

Implications of Opening up

India’s Nuclear Energy Sector

DR AJEY LELE

ver the last few years, India
has gradually opened stra-
Otegic sectors to private in-
vestments. Sectors such as defence
manufacturing, space, civil aviation,
biotechnology and telecommunica-
tions are now open to private invest-
ment. A clear policy focus is evident
on liberalization in strategic sectors
through increased foreign direct
investment (FDI) limits, push for
indigenous manufacturing in the de-
fence sector, the opening of defence
corridors, and the opening of the In-
dian Space Research Organization
(ISRO) facilities to private players.
Also, private participation is encour-
aged in the mining and strategic min-
erals sectors.
The government has now taken
the next step towards a ‘transforma- installed power capacity stands at in many places) and other required was under international sanctions
tive’ overhaul of India’s nuclear en- 476 GW, led by 240 GW of thermal, clearances, the presence of a some- for many years, and in nuclear and
ergy sector. On 15 December 2025, 110.9 GW of solar, and 51.3 GW of what weak regulatory authority, such other scientific fields, no technology
the government tabled the Sustain- wind. In this power capacity mix, the as the Atomic Energy Regulatory transfer was possible. This forced
able Harnessing and Advancement nuclear component accounts for only Board (AERB), and structural and India to pursue a largely indigenous
of Nuclear Energy for Transforming 3 per cent. Investment in the nuclear financial challenges restricted the and resource-constrained nuclear
India (SHANTI) Bill 2025 in the Lok sector is expected to play a significant growth of the nuclear sector in the programme. Finally, the India–US
Sabha. This bill proposes a compre- role in advancing India’s decarbon- country. In the current era, given that civil nuclear deal (2008) broke the
hensive overhaul of India’s civil nu- ization goals and its commitment to the availability of strategic miner- impasse.
clear framework. For all these years, a sustainable future, particularly in als has become critically important, Over the last 10 to 15 years, In-
there has been a state monopoly in meeting the country’s global com- state control over the mineral sector dia has continued to face limitations
India’s nuclear energy sector. The mitment to achieve net-zero carbon is increasingly problematic, as it can in fully integrating into global nucle-
agenda is to ensure a level playing emissions by 2070. limit timely access to resources. ar commerce, including hurdles in
field for various private agencies when The SHANTI Bill, 2025, would The other bill, which requires a modern reactor technology transfers
investing in the nuclear industry. abolish the Atomic Energy Act, 1962 change, is India’s Civil Liability for and in attracting investment.
India aims to achieve 100 giga- and the Civil Liability to Nuclear Nuclear Damage Act (CLNDA), It is now expected that a shift
watts (GW) of nuclear power capac- Damage Act, 2010. The idea is to 2010. This act places its primary away from a tightly controlled,
ity by the centenary of its indepen- have a single, unified law for nuclear emphasis on ensuring prompt and state-dominated nuclear governance
dence in 2047. At present, the state energy. Both laws have outlived their assured compensation to victims of framework towards a more transpar-
operates 25 nuclear reactors with a original context and were framed a nuclear incident. As per the law, ent and investment-friendly regime
combined installed capacity of 8,880 for a different era and set of needs. there is a clear liability framework will enable the Indian nuclear indus-
megawatts (MW), and 17 addition- India’s Atomic Energy Act 1962 is centered on the operator. It requires try to prosper.
al reactors are under construction. widely regarded as having estab- financial security to ensure funds are
The near-term goal is to raise nucle- lished a state monopoly over nuclear available and provides for govern- Group Captain (Dr) Ajey Lele (Retd.) is
ar capacity to 22,000 MW by 2032. power. Obviously, this state domi- ment intervention beyond the opera- the Deputy Director General, MP-IDSA.
During the 2025 budget speech, Fi- nance has failed to attract significant tor’s liability cap. Here, the idea is to Views expressed are of the author and
nance Minister Nirmala Sitharaman foreign investment. The law restricts protect public interests in the event do not necessarily reflect the views of
unveiled a Rs 20,000 crore outlay reactor ownership to government en- of a significant accident. the Manohar Parrikar IDSA or of the
for the research and development tities such as the Nuclear Power Cor- India’s nuclear sector has faced Government of India.
of Small Modular Reactors (SMRs), poration of India Limited (NPCIL). persistent challenges owing to India
with a target to operationalize at There was limited scope for pri- being a nuclear-weapon state (NWS) This article first appeared in the
least five indigenously developed vate industry to meaningfully enter outside the Nuclear Non-Prolifer- Comments section of the website (www.
SMRs by 2033. Also, 49 per cent FDI the nuclear energy market. Owing to ation Treaty (NPT) mechanism. It idsa.in) of Manohar Parrikar Institute
has been allowed for this sector.[2] bureaucratic delays in land acquisi- has not been a part of the global nu- for Defense Studies and Analyses, New
As of June 2025, India’s total tion (mainly due to public opposition clear order for decades. The country Delhi, on December 17, 2025

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