Tax policies usually look ahead. India’s latest move chose to look backward.
On June 11, the Finance Ministry issued an order exempting certain imports for nuclear power generation from customs duty for a period stretching from April 1, 2019, to January 31, 2026.
The decision effectively provides retrospective relief to importers and comes months after the government expanded customs duty exemptions for nuclear projects in the Union Budget 2026.
Together, the measures underline New Delhi’s broader effort to support a sector that it hopes will play a much larger role in India’s energy mix over the coming decades.
Seven Years Of Relief
The Finance Ministry’s notification grants customs duty exemption on specified goods used for nuclear power generation under tariff item 8401 30 00.
The benefit covers imports made between April 1, 2019, and January 31, 2026. The order was issued under Section 28A of the Customs Act, 1962.
According to the notification, the government was satisfied that a practice of non-levy of customs duty on such goods had generally prevailed during that period. Invoking Section 28A allows the government to formalize that position and ensure that customs duty will not be demanded for those imports.
The move provides clarity for importers and aligns past treatment with the government’s stated position.
Budget Support Continues
The retrospective relief follows measures announced in the Union Budget 2026.
Finance Minister Nirmala Sitharaman extended the basic customs duty exemption on imports for nuclear power generation until September 30, 2035. The exemption was also expanded to cover all nuclear plants irrespective of capacity.
Budget documents identified three categories eligible for the benefit. These include goods used for nuclear power generation under tariff item 8401 30 00, control and protector absorber rods under tariff item 8401 40 00, and goods required for setting up specified nuclear power projects registered with customs authorities before September 30, 2035.
The latest order effectively bridges the period before the new Budget provisions took effect and maintains continuity in policy support for the sector.
Nuclear Capacity Ambitions
India has set ambitious goals for nuclear energy.
According to government statements, the country aims to achieve 100 gigawatts of nuclear power capacity by 2047. The target forms part of a broader strategy to diversify electricity generation and support the transition toward low-carbon energy sources.
Successive budgets have increasingly highlighted nuclear power as a strategic sector. Budget 2026 introduced several measures intended to strengthen the ecosystem and support future investments.
For projects that require large capital commitments and long development timelines, policy certainty often becomes an important factor in investment decisions.
Stocks React Positively
The announcement also drew attention from investors.
According to market reports, shares of MTAR Technologies, Walchandnagar Industries and Power Mech Projects rose by as much as 13 percent after the customs duty relief was announced.
These companies are involved in areas linked to India’s nuclear supply chain, and investors appeared to view the government’s decision as supportive of future business opportunities.
While stock market reactions do not necessarily reflect long-term outcomes, the gains indicated optimism surrounding policy support for the sector.
Energy Strategy Expands
India’s nuclear power programme has historically accounted for a relatively small share of total electricity generation. However, policymakers have increasingly emphasized its importance in meeting long-term energy requirements while reducing dependence on fossil fuels.
The combination of prospective and retrospective customs duty exemptions suggests that the government is seeking to provide greater predictability to the industry.
That approach is particularly significant because nuclear projects are typically planned over decades rather than years.
The June 11 order may not immediately transform India’s energy landscape. Yet it reflects a broader policy direction. As India pursues its goal of 100 GW of nuclear capacity by 2047, creating a stable regulatory and tax framework could become just as important as building reactors themselves.
In that sense, the latest decision represents more than a tax exemption. It is another signal that nuclear energy is expected to occupy a larger place in India’s long-term energy strategy.
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