2 min readFeb 1, 2026 02:55 PM IST
Months after the government enacted the SHANTI Act to open India’s nuclear sector to private players, the Union Budget 2026-27 on Sunday announced exemption on custom duty on imports of goods required for Nuclear Power Projects till the year 2035.
“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,” Finance Minister Nirmala Sitharaman said in her budget speech.
Earlier, goods required for nuclear power generation such as Control and Protector Absorber Rods, Burnable Absorber Rods used to attract a custom duty of 7.5%. After the budget announcement, the same will be nil for these goods.
The move aligns with the government’s ambition of scaling India’s nuclear capacity to 100 GWe by 2047 — more than ten times the current installed capacity of 8.8 GWe — and builds on the SHANTI Act’s removal of long-standing legal and regulatory barriers to private participation in the sector. Days ago, the draft National Electricity Policy (NEP) also signalled a significant policy shift – Nuclear power as potential replacement for thermal power in the country.
The exemption on custom duty likely led to more imported Light Water Reactor (LWR)-based nuclear projects of the kind being set up by the Russians in Kudankulam.
India’s civil nuclear programme has deep expertise in manufacturing pressurised heavy water reactors (PHWR). Based on heavy water (deuterium) and natural uranium, PHWRs are a technology that India’s nuclear establishment has mastered. However, these are increasingly out of sync with LWRs, which now dominate the global market. Currently, LWRs account for over 85% of the civil nuclear reactor capacity in the world.
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