The Indian government's ambitious target of achieving 100 GW of nuclear power by 2047, a significant leap from the current 8.7 GW, hinges on robust private sector involvement. However, the recently unveiled draft rules under the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act have been met with a chorus of concerns from major industrial players. Companies like Jindal Nuclear Power, Adani Group, Tata Power, Reliance, JSW, and Hindalco, among others, have highlighted critical ambiguities that could impede their participation and investment in the sector.
The Department of Atomic Energy (DAE) has invited stakeholder comments on these draft regulations by September 4, 2026. While the industry welcomes the legislative move to operationalize the SHANTI Act, passed in December 2025, it stresses the urgent need for clarity on several key issues before committing to nuclear energy projects.
Tariff Uncertainty Clouds Investment
One of the most pressing concerns for India Inc is the lack of clear guidelines for nuclear power tariff determination. Industry players note that while they can supply nuclear power to distribution utilities, utilize it for captive purposes, or sell to commercial and industrial users, the mechanism for setting tariffs across these diverse segments remains undefined. Unlike thermal power, which benefits from clear Central Electricity Regulatory Commission (CERC) guidelines, the draft rules defer tariff methodology to a future notification based on recommendations from a separate committee.
As one industry executive pointed out, project costs can vary significantly based on location, technology, and other factors. Without a transparent and predictable tariff framework, determining project viability and securing financing becomes a major hurdle.
Defining Foreign Technology: An SMR Roadblock
The draft rules introduce structural ambiguity regarding the definition of indigenous versus foreign technology. A particularly contentious clause mandates that foreign designs must be operational and licensed in their country of origin, with documentary evidence of design certification. This requirement poses a significant challenge for companies interested in Small Modular Reactors (SMRs).
Many SMR designs globally are still in the developmental or experimental stages and are not yet commercially operational, except in a few countries like Russia and China. Industry experts warn that strictly enforcing this clause could delay the licensing of advanced SMR technologies in India until 2034-35 or later, hindering technological advancement and project timelines.
FDI Policy and Financial Viability
Despite ongoing discussions between the DAE and industry stakeholders regarding Foreign Direct Investment (FDI) in the nuclear sector, the draft rules make no mention of an FDI policy. Industry leaders emphasize that an early and clear FDI policy is crucial for attracting foreign capital, which can significantly reduce the overall cost of capital and enhance project viability.
Furthermore, the absence of standard guidelines for Power Purchase Agreements (PPAs) for nuclear power is a major concern. PPAs are critical bankable documents required to secure debt financing for large-scale infrastructure projects. Without clear PPA norms, obtaining the necessary capital from banks becomes extremely difficult, effectively stalling project development.
Exclusion Zones: Land Use and Safety
The industry has also called for a reduction in the exclusion zone around nuclear reactors, proposing to decrease it from the current 1 km to 500 meters for both smaller (220 MW) and larger (>700 MW) reactors. While the DAE has indicated it is considering this request, the current draft rules do not explicitly address it. Instead, they state that project proponents must submit radiation level data, and decisions will be made on a case-by-case basis. Industry representatives argue that clear, predefined exclusion zones are essential for land acquisition planning and project cost estimation.
The collective concerns underscore the need for the DAE to provide greater clarity and establish robust frameworks for tariffs, technology transfer, FDI, PPAs, and exclusion zones. Addressing these ambiguities is vital to unlocking the private sector's potential and successfully achieving India's ambitious nuclear energy goals.