Nuclear energy: Solar and wind have defined India’s energy transition. Public policy has consequently concentrated on adding renewable capacity, strengthening transmission and building storage to manage intermittent generation. Nuclear power has occupied an uncertain place in this framework. It supplies low-carbon electricity around the clock, yet its cost, construction risk, radioactive waste and accident liability have kept it outside India’s principal green-finance frameworks.
That exclusion is becoming harder to sustain. India wants 100 GW of nuclear capacity by 2047, compared with 8.78 GW at present. At the NuclearX Inaugural Forum during Bharat Electricity 2026, NITI Aayog member Abhay Karandikar called for sovereign green bonds, green deposits and green debt securities to be opened to eligible nuclear projects. He also drew attention to an equally serious constraint: India does not yet have the skilled workforce required to execute a nuclear programme of this size.
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The proposal deserves consideration. Nuclear power cannot be admitted to green finance without conditions. Nor should it remain excluded merely because the rules were written when India’s transition strategy was centred on renewable energy.
India’s nuclear target leaves a vast capacity gap
India’s nuclear plans are far larger than anything the country has built so far. The government expects existing capacity to rise from 8.78 GW to about 22 GW by 2031-32 as projects under construction are completed. Its longer-term roadmap envisages another 32 GW from the Nuclear Power Corporation of India Ltd, taking the total to about 54 GW by 2047. The remaining 46 GW is expected from other public enterprises, state governments, private companies and joint ventures. The Department of Atomic Energy set out this division in Parliament in July 2026.
This arithmetic reveals the scale of the problem. Nearly half the 2047 target depends on investors and business structures that have played little part in Indian nuclear generation. Even the expansion to 22 GW by 2031-32 relies on projects that have taken years to develop. The subsequent increase must be achieved at a pace for which India has no precedent.
The investment requirement has been estimated at about $228 billion. Spread across two decades, that would require annual commitments of more than $10 billion. The Union government cannot readily provide all this capital when transmission, distribution, renewable generation and electricity storage are also competing for funds.
The economics of nuclear power make the financing problem unusually difficult. A reactor requires substantial capital years before it sells any electricity. Delays increase interest during construction and can make the eventual tariff uncompetitive. Investors must also account for uncertain completion dates, cost overruns and liabilities that can survive the operating life of the plant.
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Green-finance eligibility will not eliminate these risks. It could, however, widen the pool of long-term capital and reduce financing costs for projects that meet prescribed standards.
Green rules reflect an earlier transition strategy
India’s existing green-finance architecture was largely designed around solar and wind power, clean transport, energy efficiency, pollution prevention and sustainable water management. Nuclear energy is absent from the eligible categories under the sovereign green bond framework and the Reserve Bank of India’s framework for green deposits. It is also outside the categories commonly used under SEBI’s green debt securities framework.
This treatment was understandable when these rules were drawn up. Green classification cannot be based on operational carbon emissions alone. It must consider the environmental and social costs of an activity across its life cycle. In the case of nuclear power, these include waste management, decommissioning, water use, accident risk and the institutional arrangements governing liability.
Those concerns justify strict scrutiny, not automatic exclusion. A climate-finance taxonomy should ask whether a project makes a substantial contribution to decarbonisation and whether it satisfies credible safeguards. Nuclear projects that clear those tests should be assessed on their merits. Those that do not should remain ineligible.
International policy has begun to move in this direction. In June 2025, the World Bank Group and the International Atomic Energy Agency entered into an agreement to support the safe and responsible use of nuclear energy in developing countries. The agreement marked the World Bank’s first concrete step towards re-engaging with nuclear power in decades.
The qualification is important. World Bank president Ajay Banga said support would depend on the IAEA’s confidence in a country’s laws, institutions and regulatory oversight. The arrangement covers safety, security, fuel management, waste disposal and the full project life cycle. India should adopt the same discipline if it changes its green-finance rules.
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Private capital needs more than statutory permission
The SHANTI Act, 2025 has opened parts of India’s nuclear sector to private participation and revised the legal framework governing nuclear activity. That removes one major barrier. It does not by itself produce bankable projects.
Prospective investors will need to know how projects will be allocated, who will supply the fuel, how tariffs will be fixed and which party will bear the cost of delays. They will also seek clarity on accident liability, insurance, decommissioning obligations and regulatory approval periods. Unless these questions are settled, access to green capital may lower the quoted cost of finance without making projects investible.
The institutional arrangement deserves particular attention. A nuclear expansion led partly by private capital requires a regulator with the authority, personnel and independence to enforce safety requirements against public and private operators alike. Financial classification cannot substitute for credible regulation.
The same principle applies to project selection. A blanket decision to label nuclear power green would weaken the integrity of India’s taxonomy. Eligibility should be granted project by project, subject to disclosure of construction risks, waste-management plans, decommissioning provisions, insurance arrangements and compliance with safety standards. Green bonds and loans could then finance qualifying reactors without treating them as financially or environmentally equivalent to solar parks.
Reactors require skills as well as capital
The financing debate can obscure another shortage. Adding more than 90 GW of nuclear capacity requires engineers, reactor operators, safety specialists, designers, regulators and construction contractors. It also requires domestic suppliers capable of producing nuclear-grade components under exacting quality controls.
Universities and technical institutions will need programmes that can supply specialised personnel for several decades. Regulators and public agencies must compete for the same limited pool of expertise as operators and equipment manufacturers. India cannot expand capacity safely if regulation grows more slowly than the industry it supervises.
This is why Karandikar’s emphasis on workforce development is as consequential as his argument about finance. Solar capacity can be added through standardised modules and a dispersed supply chain. Nuclear construction demands specialised knowledge at every stage, while errors can impose costs long after a plant has stopped operating.
The case for nuclear power ultimately rests on India’s changing electricity needs. The International Energy Agency reports that 83% of Indian power-sector investment went to clean energy in 2024. Solar and wind will continue to take much of this investment. Yet a system serving growing industrial demand, data centres, electric transport and green-hydrogen production will also need reliable low-carbon generation.
India therefore needs two reforms that must proceed together. The government should create a tightly defined route through which suitable nuclear projects can access green finance. It must also reduce the construction, regulatory and institutional risks that make those projects expensive. Reclassification may improve the terms on which capital is raised. It cannot rescue a reactor delayed by weak project management, uncertain liability or a shortage of trained personnel.
India’s nuclear target will be credible only when these risks are recognised in policy and priced honestly. Green finance can support that effort, provided the green label remains a standard to be earned rather than a concession granted to meet a capacity target.