As RIL, Adani, TATA wait in the wings, this 90-page rulebook could shatter India’s N-power dreams

India’s nuclear power sector is at a critical juncture, caught between the ambition to dramatically expand capacity and the bureaucratic, institutional, and regulatory hurdles that threaten to stall private participation.

The Modi government has been aggressively pushing the idea that private capital—from industrial giants such as Reliance Industries Limited (RIL), Adani Group, and TATA Power—must play a central role in reviving India’s nuclear ambitions.

However, the introduction of a comprehensive 90-page rulebook, which outlines the modalities of participation, has instead deepened a trust deficit between state-owned Nuclear Power Corporation of India Limited (NPCIL) and private players.

While official intent is framed as “partnership,” private companies perceive the rules as skewed toward state control, limiting their ability to influence project decisions, manage risks, and capture fair returns on investment. This has sparked fears that the nuclear sector, much like the telecom and power sectors of earlier decades, could remain a tightly controlled government preserve despite liberalisation rhetoric.

The struggle over governance and control is particularly stark given that India’s nuclear sector has historically been the domain of state-owned enterprises, with NPCIL playing the lead role in all reactor construction, commissioning, and operations.

Unlike thermal, renewable, or even defence, the nuclear sector is encumbered by the legacy of India’s strategic and security considerations. Safety, regulatory authority, liability management, and international scrutiny create a tightly guarded ecosystem where private firms inevitably face restricted entry.

The 90-page rulebook, reportedly including elaborate clauses on licensing, nuclear fuel supply guarantees, land acquisition, liability sharing, and project monitoring, has become emblematic of this tension.

Instead of offering clarity and incentive, the framework is seen as cementing NPCIL’s command while leaving private firms as subordinate contractors, unable to match their global peers who operate nuclear assets directly and profitably. For Indian corporates, this gap between opportunity and operational empowerment is precisely what threatens to “shatter” the prospect of genuine private participation in nuclear energy.

The political backdrop adds further complexity. India’s bold nuclear moment came in July 2008, when the Lok Sabha turned into a virtual battlefield during the debate over the India-US Civil Nuclear Agreement. Opponents raged that the deal undermined sovereignty, while the UPA government under Prime Minister Manmohan Singh argued it was essential to secure India’s energy future by ending technology lockdowns and opening global cooperation.

The government survived, the deal was signed, and optimism surged that nuclear energy capacity would multiply several fold. However, in the intervening years, progress has been far slower than anticipated.

NPCIL reactors have struggled with delays and cost overruns, while the Civil Liability for Nuclear Damage Act (2010), which imposes supplier liability for potential accidents, deterred foreign investors and vendors who otherwise could have delivered cutting-edge technology. That liability framework continues to haunt Indian private and global players, for whom financial and technological exposures remain disproportionate to potential rewards.

The Modi government’s answer has been to pitch India’s nuclear sector as ripe for public-private partnership, linking it to broader clean energy and climate goals. India seeks to reduce dependence on coal while simultaneously boosting baseload generation capacity, something renewable energy alone cannot ensure.

Nuclear, in theory, provides that answer, with the promise of scaling from the current ~7 GW installed capacity toward a targeted 22 GW or more in coming decades. Yet while large-scale corporations such as RIL, Adani, and Tata have expressed readiness to invest—viewing it as both a power-sector diversification play and a national strategic opportunity—the existing architecture leaves them wary.

Unlike solar and wind power, where private firms enjoy control and financing autonomy, nuclear energy operates in a legal-political cocoon. The Indian Atomic Energy Act reserves ownership of nuclear facilities for state entities, compelling private players into subordinate construction or minority financial roles.

This dynamic is evident in the structure of the proposed partnerships: private companies may be allowed to build infrastructure, manage ancillary facilities, or provide capital contributions, but NPCIL retains operational command, fuel cycle management, and regulatory responsibility.

For conglomerates used to managing supply chains, operations, and market interfaces directly, this model is unappealing. Moreover, cost escalation risks in nuclear projects—which often stretch for a decade before commissioning—remain concentrated with the state partner, leaving private players little room for efficiency gains or independent decision-making. Such limitations imply that their investments could be closer to fixed deposits with capped returns rather than growth ventures with operational stakes.

A deeper strategic challenge also looms: India’s nuclear program is not just about power generation but intertwined with strategic deterrence, indigenous technology development, and geopolitical leverage.

This strategic overlay has historically dissuaded successive governments from diluting state control. While the entry of private giants promises deeper pools of capital, technology linkages, and project execution expertise, policymakers remain reluctant to cede command over sensitive projects.

Balancing sovereign imperatives with private profit motives has proven elusive, and the current rulebook seems to tilt decisively in favour of the former. The result is a half-step reform—welcoming private money but denying them meaningful autonomy—thus producing more frustration than enthusiasm among prospective investors.

The broader outcome is that India’s nuclear vision risks stagnation at a moment when the nation urgently needs to expand reliable low-carbon power.

Instead of catalysing private-led growth, the rule-based impasse could drive major players to focus elsewhere—such as renewable energy, green hydrogen, or transmission infrastructure—sectors where regulatory clarity, autonomy, and return profiles are more attractive.

Unless the government recalibrates its framework to strike a credible balance between safety, sovereignty, and entrepreneurial freedom, India’s nuclear dream could remain, as critics suggest, perpetually trapped in state monopolisation: ambitious in headlines but underwhelming in results.

Based On ET News Report