Nuclear startups in India—a goldmine of innovation or a capital-intensive gamble?

FM Nirmala Sitharaman in the Budget 2025 announced a Nuclear Energy Mission aimed at the R&D of Small Modular Reactors with an outlay of Rs 20,000 crore. The announcement has sparked discussions within the startup ecosystem, with many stakeholders viewing it as a potential catalyst for deep-tech innovation.

In a landmark move, Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2025, announced a Nuclear Energy Mission aimed at the research and development of Small Modular Reactors (SMRs) with an outlay of Rs 20,000 crore. This initiative marks one of the first instances where a dedicated corpus has been allocated to the nuclear sector. The mission targets the operationalisation of at least five indigenously developed SMRs by 2033, with amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act also on the agenda.

The announcement has sparked discussions within the startup ecosystem, with many stakeholders viewing it as a potential catalyst for deep-tech innovation—similar to the impact the 2022 Production Linked Incentive (PLI) scheme had on the semiconductor sector.

A new avenue for startups?
From a technological perspective, nuclear energy remains a largely untapped domain in India. The development of SMRs presents a significant opportunity for startups to participate in a high-value, innovation-driven industry. However, entry barriers remain high due to the capital-intensive nature of nuclear technology.

“If India is to develop small modular reactors, it presents a promising opportunity for startups to step in. However, we haven’t seen much activity in this space yet, primarily due to the high investment required. Hopefully, the Funds of Funds initiative will help address such gaps,” says Rajesh Rathi, Managing Director of Bengaluru-based GasTech, speaking on the sidelines of a CII Bengaluru roundtable.
A look back at the semiconductor sector provides a precedent. When the PLI scheme for semiconductors was introduced in 2021, it spurred an influx of startup activity, laying the groundwork for India’s entry into the global chip-making ecosystem. Experts believe a similar trend could follow in nuclear energy if the right incentives and infrastructure are put in place.

Despite the promise, funding remains a significant hurdle for deep-tech startups operating in the business-to-government (B2G) space. Venture capitalists and angel investors often hesitate to invest in B2G enterprises due to the uncertainty surrounding order fulfillment.

“The first question any investor asks is, ‘Do you have confirmed orders?’ But for deep-tech startups, development itself requires significant investment before orders materialise. The cost of skilled manpower, materials, and lab infrastructure is prohibitively high,” Rathi explains.
Strategic investment in nuclear energy
Industry experts believe that nuclear energy investment is a crucial step toward India's ambition of becoming an advanced industrial economy.
“Nuclear energy investment is a fundamental step toward India’s ambition of becoming an advanced industrial economy. The government is playing the long game, and this budget lays the foundation for India’s tech-driven growth in the decades to come,” says Anirudh A. Damani, Managing Partner at Artha Venture Fund.
India's potential in developing thorium-based reactors has long been a subject of discussion. Siddarth Pai, Founding Partner and CFO at 3one4 Capital and Co-Chair of the Regulatory Affairs Committee at IVCA, emphasises the strategic importance of nuclear energy.

“With the Department of Atomic Energy directly under the Prime Minister and India's commitment to renewable energy, nuclear is a promising sector. However, access to BARC (Bhabha Atomic Research Centre) and India’s nuclear research ecosystem is needed to drive meaningful progress,” Pai says.
He further adds that amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will provide insurance coverage— a key risk mitigant necessary to attract private capital into this high-stakes sector.
Despite the optimism, some experts believe the impact of the Nuclear Energy Mission on startups may be limited due to the highly specialised nature of the field.

“The government’s strategic Nuclear Energy Mission is a bold step toward energy self-reliance and a greener future. However, its impact on startups may be limited due to the specialised nature of the field. That said, the mission’s broader implications are substantial—it will undoubtedly spur innovation and attract significant investment within the nuclear sector, potentially creating future opportunities for startups with specialised expertise,” says Anand Sri Ganesh, CEO of NSRCEL, an incubation center for startups and entrepreneurs.

Looking ahead
With the government committing a substantial Rs 20,000 crore to the Nuclear Energy Mission, the sector is set to witness a transformation. While immediate opportunities for startups may be limited, the long-term impact on India’s technological capabilities and energy security is undeniable.
The success of this initiative will depend not only on funding but also on regulatory reforms, industry collaboration, and access to research ecosystems like BARC. As India takes a bold step into the future of nuclear energy, all eyes will be on how this ambitious mission unfolds in the coming decade.