Introducing the Union Budget in India’s Parliament, Finance Minister Nirmala Sitharaman stated: “I propose to extend the existing basic customs duty exemption on imports of goods required for Nuclear Power Projects till the year 2035 and expand it for all nuclear plants irrespective of their capacity.”
She said that, to reduce input costs, boost domestic manufacturing and promote export competitiveness, customs duty on the following items are being reduced from 7.5% to nil:
- All goods for generation of nuclear power falling under tariff item 8401 30 00;
- Control and Protector Absorber Rods, Burnable Absorber Rods for generation of nuclear power falling under tariff item 8401 40 00.
There will also be zero duty on “goods required for the setting up of specified Nuclear Power Projects, irrespective of their capacity, where the projects have been registered with the Customs Houses concerned on or before 30 September 2035”.
The budget also provided support for India’s nuclear research ecosystem, nearly doubling allocations for research and development (R&D) under the Department of Atomic Energy (DAE). The government earmarked INR 24.1bn ($26.7m) for nuclear research projects this year, up sharply from INR12.84bn in the revised estimates of 2025-26 – an 88% increase. This indicates a focus on strengthening indigenous reactor technologies and advanced nuclear innovation.
The Bhabha Atomic Research Centre (BARC) was the largest beneficiary of the enhanced funding. The Finance Ministry increased BARC’s capital support for R&D projects to INR16.1bn up from BARC’s spending of INR 7.8bn in 2025. The original 2025-26 allocation was INR 8.8bn, indicating that BARC had not used all of its allocation. The new budget’s total allocation to BARC (capital + revenue) is INR 1.8bn, compare with INR9.2bn last year, an increase of 95%.
The increase reflects BARC’s mandate to develop next-generation nuclear technologies, including: the 200 MWe Bharat Small Modular Reactor (BSMR-200); a 55 MWe small modular reactor (SMR-55); and a 5 MWt high-temperature gas-cooled reactor for hydrogen.
The Indira Gandhi Centre for Atomic Research (IGCAR), Kalpakkam also saw its R&D funding increased. The total allocation is INR2.26bn up from INR6.78bn. This includes capital expenditure of INR 18.4bn (up from INR5.98bn) and revenue expenditure of INR4.3bn (up from INR1.7bn). IGCAR leads the design and development of liquid sodium-cooled fast breeder reactors.
However, total budgetary support or the DAE declined slightly to INR 24.12bn from INR 24.4bn in 2025. This is largely due to reduced support for the Nuclear Power Corporation of India Ltd (NPCIL). The budget’s capital allocation for NPCIL is INR5.5bn compare with INR8.2bn the previous year. This is reportedly linked to NPCIL’s stronger financial position. According to Acuité Ratings & Research its net worth has increased to INR67bn from INR61.6bn with a “healthy” financial risk profile.
According to The Hindu Businessline, the 2026 Budget “marks a clear strategic shift toward research-led nuclear growth”. While DAE spending remains steady, the government has channelled significantly higher funds into advanced reactors, small modular reactors (SMRs), hydrogen-linked technologies, and fast breeder systems. “As India works to expand clean energy capacity and strengthen energy security, these investments could accelerate the development of next-generation nuclear technologies and domestic innovation.”
In response to recent parliamentary questions in the Raya Sabha (upper house) Union Minister of Science & Technology Jitendra Singh said in a written answer that India’s nuclear energy capacity is 8,780 MWe from 24 operable nuclear power units, four of which are currently undergoing modernisation or refurbishment work. A further 17 power reactors totalling 13,100 MWe are either under construction (seven) or in the pre-project stage (10). These are expected to be completed progressively by 2031-32.
India is targeting a nuclear energy capacity of about 100 GWe by 2047 and Singh said the aim is to increase the capacity to 22 GWe by 2031-32. He also noted that the government is seeking deployment of five indigenous SMR designs by 2033. In the written answer he said BARC “has undertaken design, development and establishment of SMRs … suitable for deployment as captive power plants for the energy intensive sectors, repurposing of retiring fossil fuel-based power plants, and deployment in remote location with no grid connectivity”. Under the Nuclear Energy Mission, funds have also been allocated for R&D of indigenous SMRs by 2033.
Singh added that India is also developing fast breeder reactors (FBRs) “BHAVINI [Bharatiya Nabhikiya Vidyut Nigam Limited, a government enterprise set up under DAE in 2003 to focus on fast reactors] is currently commissioning a 500 MWe Prototype Fast Breeder Reactor (PFBR) project at Kalpakkam, Tamil Nadu.” He added that the Government “has accorded approval to carry out pre-project activities for 2 x 500 MWe twin unit of FBR 1&2 project at Kalpakkam, Tamil Nadu. On attaining first criticality of PFBR, Government will be approached for financial sanction of FBR 1 & 2 projects”.
