India Extends Nuclear Import Duty Break to 2035 in Budget 2026

In the Union Budget 2026–27, Finance Minister Nirmala Sitharaman announced that the basic customs duty exemption on imported goods used for nuclear power projects will be extended until 2035. This exemption, previously available under certain conditions, will now apply to all nuclear plants regardless of their capacity, providing long-term certainty for developers and investors in the sector.

The move is part of the government’s plan to significantly expand India’s nuclear energy capacity, which currently accounts for a small share of total electricity generation. Officials have reiterated the goal of scaling nuclear capacity toward long-term targets as part of a cleaner and more diversified energy mix.

Alongside the duty extension, the Budget highlighted broader energy and industrial policy measures. Notably, the government is promoting Rare Earth Corridors in mineral-rich states to bolster domestic mining and processing, reduce strategic dependencies, and support advanced manufacturing ecosystems.

Industry analysts welcomed the customs duty extension, saying it strengthens the economic viability of nuclear infrastructure by lowering upfront costs and improving competitiveness in long-term project planning. This aligns with India’s broader efforts to attract investment and achieve energy security and climate objectives.

Extending the basic-customs-duty exemption on nuclear-project imports to 2035 provides the long-horizon fiscal certainty that nuclear project development requires. Coverage of all nuclear plants regardless of capacity removes size-based friction that had historically limited smaller-project economic viability. Combined with the proposed liability-fund reform, the fiscal-and-regulatory environment for nuclear investment is materially improving.

The parallel Rare Earth Corridor initiative addresses complementary strategic dependencies. Nuclear technology, EV batteries, wind turbines and defense applications all require rare earth elements; building domestic mining and processing capacity reduces supply-chain concentration risk that has affected multiple sectors.

For nuclear developers, EPC contractors, rare-earth mining companies and financial institutions supporting Indian nuclear-and-critical-materials investment, Cognitud's energy transition, market intelligence and supply chain and operations teams help clients evaluate opportunities under the extended fiscal framework, structure long-term investment cases aligned with the strategic-materials strategy, and prepare disclosures aligned with BRSR, ISSB and jurisdictional industrial-policy frameworks that increasingly determine access to sustainable-finance across Indian clean-energy investment.