L&T Forecasts Substantial SMR Cost Savings
Published January 8, 2026, Larsen & Toubro (L&T), India's leading nuclear plant equipment maker, projects the nation can produce small modular reactors (SMRs) significantly cheaper than international players. Anil V. Parab, Whole-Time Director and Senior Executive Vice President of L&T (Heavy Engineering), stated that India could achieve costs at least 30% lower. This capability could position India as a major force in advanced nuclear technology manufacturing.
Economic Hurdles and Policy Context
The economic viability of SMRs has faced scrutiny, particularly after the SHANTI Act, 2025, opened the door for private ownership and operation of nuclear power plants. Experts, including former Atomic Energy Commission Chairman Dr. Anil Kakodkar, have cautioned that cost-effectiveness hinges on substantial order volumes. Parab acknowledged that while common systems in SMRs and larger reactors share costs, these are spread across a smaller capacity in SMRs. He estimated India's SMR manufacturing cost at approximately ₹30 crore per MW, compared to international quotes of ₹50 crore to ₹100 crore per MW for SMRs and about ₹15 crore per MW for India's Pressurised Heavy Water Reactors (PHWRs).
Export Outlook and L&T's Future
Regarding exports, Parab expressed caution, noting sufficient domestic demand. He highlighted that reactor exporters typically manage lifetime fuel supplies, a complex undertaking. However, he suggested exploring export opportunities for India's globally competitive PHWR technology, particularly in Asia. The Department of Atomic Energy, holding intellectual property for certain reactor designs, could license this technology to foreign entities.
L&T is also exploring synergies between its burgeoning data center business under the L&T Vyoma brand and energy needs. The high power consumption of data centers and artificial intelligence makes co-locating power generation a logical strategic step, Parab indicated. L&T itself is keeping its options open regarding owning and operating nuclear power plants.
Policy Disparities Affecting Nuclear Power
Despite the opening of the nuclear sector to private participation, nuclear power projects do not receive viability gap funding, unlike emerging sectors like green hydrogen and electric vehicles. Furthermore, nuclear equipment faces an 18% Goods and Services Tax (GST), substantially higher than the 5% levied on many renewable energy products. Nuclear power also lacks a formal 'green' classification, which would facilitate access to crucial green finance.