Budget 2026: Dept of Atomic Energy seeks sops to put nuclear power on a par with renewable energy

New Delhi: The Department of Atomic Energy (DAE) has urged the finance ministry to extend tax breaks and green incentives to nuclear power, seeking to place the sector on par with renewable energy, people familiar with the matter said.

In a note sent amid the budget formulation exercise, the DAE made a case for waiving goods and services tax (GST) for ongoing and upcoming nuclear projects, besides giving them access to green financing and purchase obligations currently available to solar, wind and hydro energy, their inclusion in national green taxonomy, and removal of nuclear projects from the Central Pollution Control Board's 'Red' category.

Currently wind, solar and hydro power enjoys incentives such as renewable purchase obligations (RPOs) and priority lending and public funding under green financing schemes defined under the national renewable energy policy framework. This gives them access to cheaper finance options both from domestic and international finances for the projects.


Nuclear power is not formally treated as a renewable source even though it produces electricity with near-zero operational carbon emissions.

Also, nuclear projects currently fall under CPCB's 'Red' category, a classification associated with high environmental risk and it affects the environmental clearances for projects and compliance timelines, making project progress slower.

The move comes close on the heels of India opening up the sector to private investment. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India, or the Shanti Bill, 2025, which lays down the legal and regulatory framework for private investment in the sector, received Presidential assent on Saturday after being endorsed by both the houses of parliament.

Nuclear power projects enjoyed excise duty exemption, which was available to mega projects under the pre-GST regime. However, these concessions are no longer available. While customs duty exemptions for nuclear power projects have been extended till September 30, 2027, conditional to certification by the DAE, the definition of 'deemed exports' under GST framework does not include nuclear power projects.

Deemed exports are a special category of supplies that are treated like exports even though the goods do not physically leave India.

As a result, the erstwhile excise duty benefit for nuclear energy projects has not been carried forward into the GST regime. Moreover, IGST cost is higher at 18% compared to 5% for solar and wind energy.

Renewables enjoy an average GST rate of around 8.9%, while nuclear projects face an 18% rate, with both GST and IGST at 18%.

The department has sought these incentives for levelling the field with renewables.

India aims to achieve 100 gigawatt nuclear energy capacity by 2047. At present nuclear energy capacity stands at 8.78 gigawatts.