Explainer: Breakthrough in India-US nuclear deal and country’s growing nuclear energy sector
Two notable developments over the last four weeks have given an impetus of India’s nuclear energy programme. On March 29, decks were cleared for American firm Holtec International for designing and building nuclear reactors in India. Barely a month earlier, Finance Minister Nirmala Sitharaman — while presenting the Union Budget — had outlined a significant push towards nuclear energy as part of India's long-term energy transition strategy.
In accordance with the latest development in the Indo-US nuclear deal, that was inked nearly two decades ago but remained in limbo, US-based Holtec will share the small modular reactor (SMR) technology with three Indian private firms — Holtec Asia, Larsen and Toubro Limited and Tata Consulting Engineers Limited.
The technology, meant for constructing reactors for civilian purposes, however, is at present not being made available to key Indian government agencies like the Atomic Energy Regulatory Board, Nuclear Power Corporation of India Limited and the National Thermal Power Corporation Limited as India — an undeclared nuclear weapons state — has not yet provided non-proliferation assurances for them.
The framework for the India-US Civil Nuclear Agreement was laid out in July 2005, with a joint statement by then Prime Minister Manmohan Singh and then US President George W Bush, under which India agreed to separate its civil and military nuclear facilities and place all its civilian facilities under the purview of the International Atomic Energy Agency safeguards. In return, the US agreed to full civil nuclear cooperation with India.
The technology transfer is being viewed as a major breakthrough. Also referred to as the 123 Agreement as it falls under Section 123 of the United States Atomic Energy Act of 1954, titled Cooperation with Other Nations, the deal had its ups and downs over diplomatic, political and regulatory issues.
Nuclear power is the seventh-largest source of electricity in India after coal, solar, wind, hydro, gas and biomass. At present, India has 24 nuclear reactors in operation in eight nuclear power plants, with a total installed capacity of 8,180 megawatts (MW), accounting for about three per cent of total power generation in India.
With a population of about 1.4 billion and a fast-growing economy, energy demand is expected to grow more in India than any other country over the next decade. While coal will remain the largest energy source until at least the middle of the century. The contribution of clean energy, including nuclear power, is growing.
From 4,780 MW in 2013-14, nuclear capacity has surged by over 70 per cent to reach 8,180 MW at present. Annual electricity generation from these plants has increased from 34,228 million units in 2013-14 to 47,971 million units in 2023-24, according to data available with the Department of Atomic Energy. This will grow substantially with 21 new reactors totalling 15,300 MW under various stages of construction.
The department’s over budget allocation for 2025-26 is Rs 37,482.93 crore compared to the revised estimates of Rs 36,564.24 crore for the 2024-25 fiscal. The capital outlay for power projects for 2025-26 is Rs 3,658.54 crore, up from the revised estimates of Rs 2,908 crore for 2024-25.
India has a largely indigenous nuclear power programme. As India is not part of the Nuclear Non-Proliferation Treaty due to its weapons programme, it was for 34 years largely excluded from trade in nuclear technology and materials, which hampered its development of civil nuclear energy until 2009.
India’s nuclear journey began in March 1946, when the Board of Scientific and Industrial Research under the Council of Scientific and Industrial Research set up an Atomic Research Committee under Homi Bhabha to explore India's atomic energy resources and to suggest ways to develop and harness them, along with collaborations with similar organisations in other countries.
India and Asia's first nuclear reactor, named Apsara reached criticality on August 4, 1956, and it was formally inaugurated by then Prime Minister Jawaharlal Nehru on January 20, 1957.
According to the finance minister’s Budget speech, the government has set an ambitious target of 100 gigawatts (GW) nuclear power capacity by 2047, positioning nuclear energy as a major pillar in India's energy mix. This aligns with the broader objectives of ensuring energy reliability and reducing dependency on fossil fuels.
A key highlight of the Budget is the launch of a Nuclear Energy Mission, which is focused on research and development of Small Modular Reactors (SMRs). The government has allocated Rs 20,000 crore for this initiative, aiming to develop at least five indigenously designed and operational SMRs by 2033.
The government is also actively expanding the nuclear energy sector by developing Bharat Small Reactors (BSRs) and exploring partnerships with the private sector. BSRs are 220 MW Pressurized Heavy Water Reactors (PHWRs) with a proven safety and performance record. These reactors will reduce land requirements, making them suitable for deployment near industries such as steel, aluminium and metals, serving as captive power plants to aid in decarbonisation efforts.
In addition to BSRs, the Bhabha Atomic Research Centre (BARC) is developing SMRs for repurposing retiring coal-based power plants and meeting power needs in remote locations. The Department of Atomic Energy also plans to introduce new nuclear reactors, including high-temperature gas-cooled reactors for hydrogen co-generation and molten salt reactors aimed at utilizing India's abundant thorium resources.
India is actively exploring Small Modular Reactors (SMRs) as a crucial part of its energy transition strategy, aiming to achieve net-zero emissions while ensuring energy security. SMRs are advanced nuclear reactors with a power generation capacity ranging from less than 30 MW to 300 MW, provide a flexible, scalable, and cost-effective alternative to conventional large nuclear reactors.
Given India's growing energy demands and the need for reliable, low-carbon power, SMRs can play a transformative role in complementing renewable energy sources and stabilising the grid, according to government statements.
