How private is India’s private nuclear push?

Akshara (0:04)

In today's episode, we'll do one deep dive and cover another story for the day. First, we'll talk about how private India's private nuclear push is, and then we'll talk about the crisis in India's tea industry.

Welcome back to The Daily Brief by Zeerodha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. I'm your host Akshara, and today is Monday, 21st September. Before we start, we'd like to tell you about our latest episode on Subtext with Avantika Goswami and Trishant Dey from the Think Tank CSE. We speak to them about the impossible question facing developing nations today. How do you industrialize and decarbonize at the same time? What are the power dynamics behind the climate policies Western nations impose on them? And what a just green transition would look like? The link to the episode is in the description below. Coming to the first story.

Private participation is a wonderfully elastic phrase in nuclear power. It can mean that a company manufactures a specialized heavy-duty container in which the nuclear reaction happens. It can mean that it designs the pipes running through a plant. It can mean it just pays for the entire project. Or it can mean that the company actually owns and operates the reactor.

Those are vastly different levels of participation. Yet, India's recent nuclear announcements have often been bundled together as evidence that the sector is being open to private companies.

But that is only partly true. So private companies have worked on Indian nuclear plants for decades. And what they could not do was own and operate one. The Shanti Act has now made that legally possible. But the projects taking shape today sit at different points between those two extremes.

So the easiest way to understand India's nuclear opening then is as a ladder.

At the bottom, private companies work as contractors. And higher up, they finance projects and help develop technology. At the very top, they become licensed nuclear operators. Now, India has occupied the lower rungs for years. And it's now experimenting with the middle, while the top rung remains mostly theoretical. LASN and 2Pro and HCC have handled major construction and engineering work at nuclear plants. And HCC claims that it helped build 60% of India's installed nuclear capacity. Valchand Nagar Industries and MTAR make specialized equipment and components alongside the government-owned THEL.

Now, NPCIL's recent tender for the Bharat Small Reactor Program belongs in this category. So, NPCIL, the Nuclear Power Corporation of India, is the government-owned company that builds, owns and operates most of India's commercial nuclear plants. The program uses an adapted version of NPCIL's existing 220-megawatt reactor design, and it has invited consultants to undertake generic engineering and create a detailed 3D model for the reactor.

The work covers civil engineering, piping, electrical systems, ventilation, instrumentation, and other parts of the plant. Now, this is substantial work. A nuclear plant contains thousands of components that must fit together precisely and operate safely for decades. But NPCIL still owns the underlying reactor technology. It sets the requirements, reviews the consultants' work, and integrates the final design. But the same Bharat Small Reactor Program allows industry to move one rung higher. So instead of merely helping NPCIL design the plant, an industrial company can finance the reactor and consume the electricity it produces. So in December 2024, NPCIL invited industries to finance these reactors for their own electricity needs. This is called captive use. A steel or aluminum company, for instance, would secure power for its factories, rather than build a plant mainly to sell electricity to others. The industrial company would provide land and cooling water, pay for construction, and cover the plant's running costs. And its commitments would also extend to fuel, waste management, and decommissioning, which is the work needed to safely retire the plant at the end of its life. Now, NPCIL would supply the technology, supervise construction, and operate the reactor with its trained staff. And under the proposed arrangement, ownership of the plant would transfer to NPCIL for a nominal rupees 1 before operations began. So in return for funding it, the industrial company would retain the right to the electricity after the plant's own needs were met. Now, this was possible even before Shanti. It was designed to work within the old nuclear law by keeping ownership and operation with NPCIL while bringing in private money.

By July 2026, Hind Alco was reportedly the only company to have submitted a proposal. And Hind Alco produces aluminum and copper, both of which require large amounts of electricity. So the trade-off is clear. The industrial partner could secure a long-term power supply but would commit substantial capital without controlling the reactor's operation. And the limited response does not by itself establish why other companies stayed away.