Finance Minister Nirmala Sitharama on Saturday proposed the setting up of 100 gigawatts (GW) of nuclear power capacity with focus on developing small modular reactors (SMRs) in the Union Budget for FY26 as the government aims to create a larger non-fossil fuel power capacity.

This also aligns with one of the 10 broad areas of focus for the government—energy security—in the Union Budget for FY26. These areas focus on Garib (poor), Youth, Annadata (farmer) and Nari (women).

“Development of at least 100 GW of nuclear energy by 2047 is essential for our energy transition efforts. For an active partnership with the private sector towards this goal, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be taken up,” Sitharaman said in her budget address.

A Nuclear Energy Mission for research & development (R&D) of Small Modular Reactors (SMR) with an outlay of ₹20,000 crore will be set up. At least 5 indigenously developed SMRs will be operationalized by 2033, the Finance Minister added.

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Anujesh Dwivedi, Partner at Deloitte India, said the budget announcement provided the much-awaited push for Nuclear Power development in the country. The announcement of 100 GW Nuclear power generation capacity by 2047 shows a clear policy shift towards the choice of nuclear power in the long-term for meeting base load as an alternative to fossil fuel based thermal sources, aligned with the country’s 2070 Net Zero ambition.

“The ₹20,000 support for setting-up of 5 SMR projects by 2033 will act as a catalyst for creating the much-needed ecosystem, while the country adds 80 GW of thermal generation capacity by 2032 to meet the sharp growth in electricity demand in the interim,” he added.

Suddhasatta Kundu, Director at Nangia Andersen, said that domestic manufacturing of grid scale storage, wind turbines, solar modules, EV batteries will be promoted through government schemes.

Besides, the proposals will also help in development of indigenous technology creating opportunities for the private sector to bring in more investment and accelerated growth in the nuclear segment, he added.

Ashwin Jacob, Partner and Leader (Energy, Resources & Industrial Industry) at Deloitte India, the Finance Minister announced the thrust on Nuclear Power in the vote-on-account at the same time last year and built on that in the July Budget of 2024, which had sparked significant interest in the private sector.

“Today’s announcement of ₹20,000 crore support to R&D for SMRs, coupled with the government’s intent to amend the Indian Atomic Energy Act and Civil Liability for the Nuclear Damage Act in order to provide an enabling legal and policy environment, will go a long way towards enabling Final Investment Decisions (FIDs) in this space,” he added.

While There is a need to study the fine print, Deloitte India expects several industries—both traditional hard-to-abate sectors and also the new-age users of power—Data centres to start evaluating investments in this space, Jacob said.

Published on February 1, 2025