#159 Small (Modular) Reactors, Long Game
In this edition of Technopolitik, Anwesha Sen explores what India’s SMR ambitions could mean for the country’s energy vulnerabilities, as well as its longer game in the industry.
If you look at the trajectory of global energy systems over the past few years, two competing pressures have become obvious: the need to decarbonise, and the increasing electricity demand from industries such as AI. With intermittent renewables unable to provide continuous baseload power, nuclear energy has re-emerged as an indispensable solution.
Historically, nuclear energy developments have meant conventional gigawatt-scale nuclear power. But traditional nuclear plants are plagued by high capital costs, on-site construction delays, and massive land requirements, let alone significant political barriers.
It is in this context that Small Modular Reactors (SMRs) increasingly seem like a promising solution to meet global energy demands. By definition, they are smaller and modular, which means they can be mass produced and carry a lower capital expenditure per unit. It is also claimed that SMRs are much safer than conventional nuclear power plants as they incorporate passive safety systems (spoiler alert: Gen. III nuclear power plants also already have similar systems in place).
However, pitting SMRs against conventional nuclear power plants is pointless. Both serve different purposes, for the simple reason that the two have vastly different electricity generation capacities.
In India, the power grid enters its most precarious hours when the sun sets. Solar generation collapses while demand surges. Gas-fired plants, which can ramp up and down faster than coal, would ordinarily help bridge the gap — but the ongoing conflict in West Asia has disrupted LNG tanker routes, driven up spot prices, and strained India’s import-dependent gas supply precisely when the grid needs it most.
Coal plants, meanwhile, take hours to throttle up or down. The result is a structural vulnerability that India's rapid expansion of renewables has not yet resolved. Moreover, approximately 38.3 GW of renewable capacity was cancelled between 2020 and 2024 due to tender failures and delays, and over 50 GW of projects remain stranded due to unfinished transmission lines.
This is where SMRs can come in. SMRs offer dispatchable, round-the-clock, low-carbon power that can flexibly complement intermittent renewables like solar and wind.
But the economics of SMRs carry a significant caveat. SMRs inherently lack the economies of scale that make large reactors cost-competitive per unit of output. To overcome this, they must achieve what analysts call high "learning rates" — cost reductions through mass production. First-of-a-kind units will likely cost more than domestic coal or large-scale nuclear alternatives, but the use case differs significantly. SMRs are better suited for captive power generation in industries and complementing renewables for baseload power during demand surges.
Even so, meaningful grid contributions remain at least a decade away.
India’s 2025-26 Union Budget announced INR 20,000 crore for its Nuclear Energy Mission, targeting at least five indigenous SMRs by 2033. The centrepiece is the Bharat Small Modular Reactor — a 200 MW pressurised water reactor being co-developed by the Nuclear Power Corporation of India and Engineers India Limited.
The BSMR’s use of Slightly Enriched Uranium is a strategically sound choice. Some SMR designs require High-Assay Low-Enriched Uranium, a fuel with few commercial producers and significant supplier leverage. SEU avoids those acute bottlenecks, leaving India exposed primarily to generic uranium price swings rather than the geopolitical chokepoints that could constrain rivals’ programmes.
On the manufacturing side, India already possesses the heavy forging capabilities, the turbine assembly lines, and the nuclear-grade electronics sector — with organisations like L&T and BHEL leading in this space.
India is building a diversified partnership ecosystem rather than relying on any single supplier. In March 2026, India and Canada finalised a CAD 2.6 billion, nine-year uranium supply deal with Cameco alongside a formal SMR cooperation agreement. A month earlier, India and France signed a declaration to co-develop and co-produce SMRs and Advanced Modular Reactors. The United States authorised Holtec International in 2025 to transfer SMR-300 technology to Indian firms including Larsen & Toubro and TCS. Russia is in parallel discussions on deploying its own SMR designs and floating nuclear plants in Indian waters.
The decade ahead
SMRs are not a solution to India’s immediate energy stress — that will require accelerating renewables deployment, fixing transmission bottlenecks, and securing more stable gas supplies in the near term. The technology’s commercial maturity is realistically a decade away, and India’s 100 GW target will demand large conventional reactors and massive grid investment running in parallel.
What SMRs offer is something longer in the making: indigenous engineering competence for a technology that low and middle income countries will eventually need. Nations that are too small and capital-constrained for a conventional gigawatt-scale plant are the market a mature BSMR could one day serve.
For a more detailed read, head over to my issue brief, “From Gigawatts to Megawatts”.
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And before you go-
Check out Grammar of War, a newsletter by Adya Madhavan, that looks at advanced military technologies!