India Advances FDI for Nuclear Power: Banking Investments to Fuel 100 GW Goal

India’s nuclear energy sector is on the cusp of transformation, with Foreign Direct Investment (FDI) set to play a pivotal role in funding ambitious projects. Seema Jain, Member (Finance) at the Department of Atomic Energy (DAE), recently emphasized “banking FDI” for nuclear power initiatives in the pipeline. Speaking on innovative financing measures, she underscored the need to carve out dedicated financial space for the sector without sidelining other national priorities.

Policy Milestone Unlocked

The Atomic Energy Commission (AEC) has greenlit a landmark FDI policy, now forwarded for inter-ministerial consultations. This move aligns with the SHANTI Act of 2025, which ended the long-standing state monopoly under the 1962 Atomic Energy Act. Key reforms include aligning nuclear liability with international norms and granting statutory independence to the Atomic Energy Regulatory Board (AERB).

Under the proposed framework, up to 49% FDI will be permitted through joint ventures. This opens doors for private sector involvement in operations and power generation, particularly for Small Modular Reactors (SMRs) and large-scale plants. Global nuclear vendors, previously cautious due to regulatory hurdles, now see a de-risked market worth $214 billion over the next two decades.

Massive Funding Challenge

India aims to scale nuclear capacity to 100 GW by 2047, up from the current 8 GW. At an estimated ₹22 crore per MW, this translates to roughly ₹20 lakh crore ($240 billion) in investments. Traditional government funding falls short, prompting DAE’s pivot to hybrid models.

Jain highlighted “banking FDI” as a core strategy—channeling foreign capital through banks and financial institutions tailored for high-capex projects. Complementary tools include:

• Regulated Asset Base (RAB): Ensures steady returns for investors during construction.
• Contracts for Difference (CfDs): Shields against market price volatility.
• Power Purchase Agreements (PPAs): Long-term off-take guarantees.
• Public-Private Partnerships (PPPs): Blends government oversight with private efficiency.

These mechanisms aim to attract industrial giants seeking reliable, green baseload power, reducing reliance on coal and intermittent renewables.

Strategic and Economic Impact

The policy shift positions India as an emerging nuclear powerhouse in Asia. With domestic players like NPCIL partnering internationals from the US, France, and Russia, projects like Jaitapur and new SMR deployments could accelerate. This not only bolsters energy security but also drives job creation in manufacturing, engineering, and R&D.

Challenges remain, including technology transfer and waste management, but the SHANTI Act’s clarity addresses investor hesitancy. As consultations wrap up, approvals could flow by mid-2026, igniting the pipeline of 10-15 GW in immediate projects.

DAE’s vision ensures nuclear power’s financial viability, securing India’s clean energy future. By blending FDI with smart financing, the sector is poised for unprecedented growth.