India is gearing up for one of the most consequential energy reforms in its post-independence history, with the government expected to table the Atomic Energy (Amendment) Bill 2025 in the current parliamentary session. For the first time, the legislation proposes to open the civilian nuclear power sector to private and state enterprises beyond NPCIL, signalling a fundamental shift in how India plans to build future baseload capacity.
Yet even before the contours of the Bill are released, the debate has narrowed sharply to a single defining concern: how tariffs for privately operated nuclear power will be determined. Across ministries, regulatory bodies, investors and utilities, tariff design is increasingly seen as the linchpin that will decide the commercial viability of India’s next generation of nuclear projects.
A structural reform after six decades
The new Bill arrives more than 60 years after the original Atomic Energy Act of 1962, which placed civilian nuclear power exclusively under government control. The amendment is intended to widen participation while retaining full oversight of safety, technology and fuel cycles under the Department of Atomic Energy and the Atomic Energy Regulatory Board.
The move comes at a moment when India’s power demand is rising faster than the global average and is expected to continue expanding over the next two decades. Nuclear energy, with its round-the-clock generation and low emissions profile, is being positioned as the critical balancing force for a grid that is increasingly dependent on solar and wind power.
Why tariff determination is the sector’s make-or-break decision
Unlike thermal, solar or wind power, nuclear tariffs are deeply intertwined with technology selection, fuel supply chains, reactor design, safety redundancies, construction timelines and long depreciation cycles. For private developers, the first question is who the tariff regulator will be.
Government discussions now revolve around whether nuclear tariffs should fall under the Central Electricity Regulatory Commission, remain under the purview of the Department of Atomic Energy with technical backing from the Central Electricity Authority, or be assigned to a new specialised regulatory mechanism.
The outcome will fundamentally determine how lenders price risks, how long-term power purchase agreements are structured, and how states contract nuclear baseload in the coming decades. A senior official involved in preliminary consultations summed up the sentiment by noting that tariff clarity will decide the speed and scale of private investment because nuclear projects simply cannot move without long-term visibility on recovery.
Long-term capital, long-term risk
India currently operates 7,480 MW of nuclear capacity, all run by NPCIL, with another 8.7 GW under construction. This is modest relative to India’s needs, but nuclear remains indispensable for grid stability. Opening the door to private participation could accelerate capacity creation, but only if investors are confident that cost recovery frameworks are stable and transparent. Nuclear projects typically take more than a decade to complete, with capital costs and financing structures that require decades of certainty.
Liability rules under review
The amendment is also expected to revisit India’s nuclear liability framework, a long-standing concern for foreign reactor suppliers and financing institutions. Officials emphasise that India will not dilute its international commitments under IAEA safeguards. Instead, discussions are centred on improving definitions, streamlining responsibility allocation and removing commercial bottlenecks that discourage global participation. Any changes will need to balance financial risk with uncompromising safety obligations.
A regulatory architecture that can shape the next fifty years
Crafting the regulatory and tariff framework is expected to be the most complex aspect of this reform. India’s nuclear ecosystem is unique due to the three-stage programme centred on PHWRs, fast breeder reactors and the long-term thorium cycle. Tariff models will have to reflect the complexities of uranium sourcing, safeguarded and unsafeguarded reactor categories, spent fuel management and the integration of advanced reactor designs.
The way this architecture is shaped will influence how fast projects move, how costs are shared, and how nuclear power becomes a stable part of India’s future energy mix.
States watching closely as demand rises
As states struggle to meet surging peak demand, many see nuclear as a valuable source of firm power to complement renewable energy. But state utilities are clear that they need transparent, predictable pricing to sign long-term PPAs. The tariff question, therefore, is as critical for states as it is for private developers.
A turning point for India’s energy strategy
If executed well, the opening up of the nuclear sector could reshape India’s energy landscape for the next half-century, unlock billions in long-term capital, and strengthen the country’s clean-energy transition. However, the framework for tariff determination will ultimately determine whether this move becomes transformative or remains tentative.
A sector veteran perhaps captured it best when he said that this legislation can reshape India’s energy future, but only if tariff and regulatory clarity match the scale of the country’s ambitions.
