India’s nuclear energy sector is set for significant changes, as announced in the recent budget speech by the country’s Finance Minister Nirmala Sitharaman.
Sitharaman said, “Our government will partner with the private sector for setting up Bharat Small Reactors (BSR), research and development of Bharat Small Modular Reactor (BSMR), and research and development of newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector.”
The BSR refers to the existing 220 Megawatt Pressurized Heavy Water Reactor, of which 16 units are already operational in India.
The BSMR, on the other hand, is a new concept involving factory-made reactors that can be assembled on-site, potentially serving as captive power units for large industries. The design of the BSMR is still ongoing at India’s Bhabha Atomic Research Center in Mumbai with the expectation that it could also run on natural uranium.
In a groundbreaking move, the private sector will be allowed to partner in setting up nuclear plants for the first time. This decision has been welcomed by key figures in the atomic energy sector, including VK Saraswat from NITI Aayog and Bhuvan Chandra Pathak from the state-owned Nuclear Power Corporation of India Limited,(NPCIL). Niti Aayog has been urging the government to look at small reactors more seriously.
This shift toward private sector involvement marks a significant change from the current Indian Atomic Energy Act of 1962, which does not permit private participation in nuclear energy generation. The move is expected to open up new avenues for financing these capital-intensive power plants.
India currently has an installed capacity of 6,780 Megawatts of nuclear power, with 22 operating reactors. The development of BSMRs is seen as a promising direction, with experts suggesting they could be assembled in less than four years at a cost comparable to the BSR (approximately ₹16 crores per megawatt).
The initial stage of private sector involvement may operate under a “Government Owned but Company Operated” model, with private investments and government control over nuclear fuel.
This shift toward nuclear energy is partly driven by climate change concerns, as atomic energy produces electricity with almost zero carbon dioxide emissions. However, the high capital costs of installation remain a challenge.
The budget announcement has set the stage for potential policy and legal changes to accommodate private sector participation in nuclear energy generation. As research on BSMRs progresses globally, India aims to position itself at the forefront of this emerging technology, potentially collaborating with countries such as Russia, USA, South Korea, and France in the future.
Last updated: December 26th, 2025
