From leader-in-waiting to laggard: India’s thorium dilemma in energy mix

India’s energy demand is growing at five-six per cent annually over the next five to six years, driven by industrialisation, rapid urbanisation, and the needs of over 1.4 billion people. This surge has intensified the nation’s reliance on its vast coal reserves, which currently account for 55 per cent of the total energy mix and fuel over 74 per cent of its electricity generation. This heavy dependence on a single fuel source leaves India’s states susceptible to climate volatility and supply shocks, threatening both energy security and environmental stability. The increased use of coal also exacerbates environmental stress by boosting greenhouse gas emissions. In this context, thorium offers a compelling new alternative. India, accounting for 25 per cent of the world’s thorium reserves (457,000–508,000 tonnes) concentrated in Kerala, Tamil Nadu, and Odisha, is well-positioned to leverage this resource as an alternative, as depending on energies such as coal can cause severe pollution.

Benefits of Thorium

Reliance on thorium presents a viable alternative, as it is carbon-free, significantly reducing the environmental footprint than conventional sources. Thorium reactors emit no carbon dioxide, nitrogen oxides, or sulfur oxides, making them among the cleanest, most reliable baseload sources to fight climate risks. Furthermore, thorium requires less aggressive extraction, which reduces the environmental and social costs, aligning with ecological compliance, and produces far less transuranic waste, such as plutonium and americium, the contributors to radioactivity. Additionally, thorium leads to incessant power generation, ensuring uninterrupted energy supplies to social infrastructures, unlike renewables.

Despite all these benefits and India’s renewed commitment to nuclear energy, India’s progress in this sector remains sluggish. For instance, as per the Economic Survey, nuclear power contributes only 6,800 MW out of the total installed power capacity of 494,000 MW.

Why haven’t we moved ahead? Are we on the right track

India’s nuclear ambitions have long been constrained by familiar bottlenecks—bureaucratic red tape, fuel shortages, and outdated legal frameworks. But apart from these deeper issues continues to stall progress of materialising the nuclear dream: minimal private sector participation.

While public sector enterprises such as NPCIL and NTPC have been central to capacity building, their efforts alone are insufficient to achieve India’s ambitious target of 100 GW of nuclear power by 2047. According to Anil Kakodkar, former Atomic Energy Commission (AEC) Chairman, these public sector companies are capable of improving the nuclear energy capacity, but to scale up to the required levels by 2047 demands more financial resources. Here, private sector participation will be pivotal - as it helps in mobilising funds which can help not only in increasing R&D spending but also in increasing the capital needed for this. Setting up nuclear facilities in India remains prohibitively expensive. The Central Electricity Authority (CEA) estimates that the capital cost of a PHWR nuclear power plant in India is estimated at around Rs 11.7 crore) per MW in 2021–22, rising to Rs 14.2 crore per MW by 2026–27. Other projections place the costs even higher, in the range of Rs 16–25 crore per MW. Relying solely on public financing severely limits capacity expansion. By contrast, greater private participation could not only inject fresh capital but also stimulate R&D through partnerships and competition. For instance, by gradually opening to private players, China increased private nuclear R&D spending from $436 million in 2015 to $1.3 billion in 2020.

Though the amendment to the Atomic Energy Act of 1962 allows for foreign investment and greater participation by the domestic private firms, the deployment of the vision is also more important. India cannot afford to delay. If it seeks to position nuclear energy as a cornerstone of its energy transition and achieve the 100 GW dream and net-zero emissions, it must act decisively - reforming liability laws and mobilising private capital.

Of course, opening the sector is not without risks. Capping liability may reduce investor anxiety but could incentivise cost-cutting, raising safety concerns reminiscent of past industrial disasters. Greater foreign participation may also raise questions about strategic autonomy, particularly in fuel supply chains. For India, the challenge lies in striking the right balance: enabling private and foreign participation while maintaining rigorous safety standards and protecting national sovereignty.

Ultimately, moving forward, India must strike a careful balance, welcoming investment and innovation while safeguarding public safety and national sovereignty. Above all, it must not lose sight of its long-term vision: achieving self-reliance through indigenous thorium-based nuclear energy.

(Manu Prathap is a Research Assistant at IIM Trichy, and Dinesh B is a Research Staff at IIM Trichy. Views are personal)