By: Medha Prasanna
This week, when Indian prime minister Narendra Modi visits Washington DC to meet U.S. president Donald Trump, small modular reactors (SMRs) are expected to be on the agenda. These nuclear reactors have recently taken centerstage in energy industry debates.
SMRs are advanced reactors whose components can be factory manufactured and shipped to desired location for installation. In theory, SMRs solve the problem of nuclear power traditionally being immensely capital intensive and often involving significant cost overruns. They offer advanced designs, shorter time frames for assembly, passive safety systems, economies of scale, and diverse applications. At present, only two commercial small modular reactors are operational in Russia and China and commercial SMRs are not proven to be cost competitive beyond industry modelling. The United States has announced 4 gigawatts (GW) in SMR projects with 3 GW in development stages.
India’s current installed nuclear power capacity stands at about 8.1 GW across 24 nuclear reactors, currently accounting for just 3% of India’s power demand. At the same time, India’s peak power demand is set to increase from 250 GW in 2024 to about 800 GW by 2030. Along with cheaper renewable and energy storage costs, nuclear power would enable India’s demand to be met with less reliance on fossil fuels. But despite being price competitive and having low emissions, nuclear energy has long been unpopular due to fears of accident, exacerbated by experiences such as at Chernobyl in the Soviet Union in 1986 and the Fukushima accident in Japan in 2011. At the same time, public perceptions are changing and are much more favorable, including in the United States and India.
The other impediment to developing nuclear power in India is that the country does not comply with international liability standards, forcing the manufacturer (and not the operator) to be liable for any and all accidents. Another hurdle is that nuclear reactors in India can be built by private entities but not operated by them. These factors have long deterred private international players from the Indian market. However, in this year’s annual budget speech, India’s finance minister Nirmala Sitharaman indicated that India’s Nuclear Power Corporation of India (NPCIL) will be accepting proposals from the private sector to operationalize ‘Bharat Small Reactors (BSR's)’ and develop indigenous ‘Bharat Small Modular Reactors (BSMR’s)’ to achieve 100 GW of Nuclear by 2047. More importantly, India has also proposed overdue policy amendments to its Atomic Energy Act and Civil Liability for Nuclear Energy Act to incentivize private international participation in the civil nuclear sector in India.
For its part, the U.S. Bureau of Industry and Security recently delisted three nuclear Indian entities. The United States also amended its own Atomic Energy Act in 2024 to allow the Nuclear Regulatory Commission to issue licenses to Indian entities, not under specific U.S. sanctions, to own commercial U.S. nuclear power plants. However, the Act still requires specific authorization for manufacturing and nuclear design work by American entities in India. But taken together, recent steps and proposals by both India and the United States represent a chance to realize the full potential of the India-U.S. civil nuclear agreement, which was announced in 2005, concluded in 2008, but is yet to see results in the civil nuclear energy space.
The latest nuclear policy steps – and technological advances in SMRs – pave the way for new kinds of cooperation between the United States and India. For example, as India retires more coal plants, it can benefit from knowledge sharing with the United States to convert decommissioned facilities into nuclear power plants. Installing SMRs at these sites decrease costs and regulatory measures by utilizing existing resources, like rail and road connectivity, water, and land. Similarly, tech companies in both India and the United States have a vested interest in securing renewable energy for data centers. Many large data center campuses require an astounding 300 MW supply, preferably exclusive, which can be provided readily by SMRs. To this end, Microsoft, Amazon, and Google have invested in small nuclear power sources for their data centers in the United States, with many set to go online by 2030.
However, SMRs can only be price competitive if they are able to achieve economies of scale. Together, India and the United States can use the existing momentum to explore technological partnerships that advance designs and efficiencies in small modular reactors.
Medha Prasanna is a Program Coordinator and Junior Fellow for the Energy & Climate program at ORF America.