Nuclear Power Push: Finance Ministry Waves Customs Duty on Critical Imports to Fuel India's Green Energy Future

Nuclear Power Push: Finance Ministry Waves Customs Duty on Critical Imports to Fuel India's Green Energy Future​

India’s finance ministry has taken a significant step to bolster its nuclear energy sector, announcing a customs duty waiver on essential imports for nuclear power generation. This order extends relief retrospectively, covering eligible goods imported between April 1, 2019, and January 31, 2026. The measure underscores the government’s commitment to achieving ambitious national energy targets.

Retrospective Duty Waiver Boosts Nuclear Projects​

The June 11 government order applies the customs duty exemption retroactively, covering imports that occurred before the latest Budget-linked relief took effect. This waiver was introduced as part of efforts to expand nuclear power capacity under the National Nuclear Energy Mission. The decision helps reduce operational costs and make projects more viable across the sector.

The Ministry had previously proposed extending the basic customs duty exemption on goods needed for nuclear projects until 2035, regardless of the plant's capacity. The specific categories covered by this relief include all generation goods (tariff item 8401 30 00), control and protector absorber rods (8401 40 00), and setup goods registered before September 30, 2035.

Government Targets Drive Rapid Capacity Expansion​

The customs duty change aligns directly with the government's aggressive energy transition goals. The Department of Atomic Energy has set a target of reaching 100 GW of nuclear power generation capacity by 2047. Currently, the installed capacity stands at 8.78 GW as of early 2026.

The Ministry clarified that zero customs duty on these essential goods is intended to cut project costs and reduce the unit cost of electricity generated. Minister of State for Atomic Energy, Jitendra Singh, stated in a written reply to the Lok Sabha that this exemption will support wider private participation in nuclear projects.

Regulatory Changes Empower Private Sector Participation​

The policy shift arrives amidst significant regulatory evolution in India’s energy landscape. Parliament passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI Act) in December 2025. This groundbreaking Act permits private entities to participate in various aspects of nuclear facilities setup and operations, subject to state licensing.

The Department of Atomic Energy confirmed that a unified safety framework applies irrespective of whether the project is public or private. The SHANTI Act aims to align civil nuclear liability provisions with international standards while introducing graded operator liability based on facility type.

Nuclear Capacity Projections Set Ambitious Trajectory​

India’s nuclear power generation capacity shows steady growth, increasing from 4,780 MW in 2014 to 8,780 MW by 2026. The government projects an accelerated trajectory forward, aiming for the capacity to reach 22,380 MW by 2031-32 and 47 GW by 2037.

The long-term vision culminates in a target of 100 GW by 2047. In the financial year 2024-25, nuclear power accounted for 3.1 percent of India’s electricity generation, with plants generating 56,681 million units of electricity.

Broader Context in Energy Transition Budget​

The customs relief is part of a wider range of indirect tax proposals linked to the energy transition and national security outlined in the Budget 2026-27. These budget proposals also included basic customs duty exemptions for critical technologies.

This financial support extends beyond nuclear power, covering capital goods needed to manufacture lithium-ion cells for battery energy storage systems. It also includes subsidies for sodium antimonate used in solar glass manufacturing and equipment required for processing critical minerals domestically.