Nuclear fusion startups seek regulatory clarity, more patient capital

Founders argue that fusion reactors cannot melt down or explode and only produce inert helium as waste. This is different from fission plants, which have risks of chain reactions and long-lasting radioactive waste, according to Prabhat Ranjan, chief executive officer of Agnira Sanlayan Pvt. Ltd (ASPL Fusion), one of the startups involved in the submission. He mentioned that exclusion zones of up to 1 km, the standard for fission sites, are not needed for fusion.

Key Takeaways

• Fusion startups want separate rules, not fission-based regulations under India's SHANTI Act.
• ASPL Fusion led the written recommendations sent to Niti Aayog after the July consultations.
• Founders say fusion cannot explode, melt down, or produce long-lived radioactive waste.
• Landlords, investors, and the public still confuse fusion with fission, weapons, or disasters.
• Indian fusion funding of $6.8 million trails America's $1.18 billion badly this year.

“Recently, all stakeholders were invited for discussions. We explained that fusion reactors should not be regulated like fission reactors,” said Dr Pravin Kini, co-founder of Anubal Fusion, which is developing laser-based fusion technology.

Funding is still limited, even as investors and founders highlight fusion as crucial to India’s energy security. Domestic nuclear startups raised $6.8 million so far in 2026, while their American counterparts raised $1.18 billion, according to Tracxn data included in the submission.

What startups are asking for

India currently depends heavily on imports for much of its uranium and fossil fuels, making the country vulnerable to global supply disruptions and price fluctuations. Developing domestic nuclear technologies, including both fission and fusion, could help India generate more of its own clean electricity.

"India's growth ambitions run into a simple constraint: every fab, data centre, and gigafactory we want to build needs firm, round-the-clock power, and renewables alone don't solve for dispatchability,” said Vishesh Ranjan, founding partner at early-stage deeptech firm Speciale Invest. Nuclear is the only clean technology that can provide true, round-the-clock baseload power at the scale required by India's $7-trillion economy ambitions.

Currently, India has four startups in the nuclear fusion space, per data platform Tracxn.

One of the key recommendations from fusion startups is to create a separate regulatory framework for fusion reactors, arguing that the current law largely applies rules designed for conventional fission reactors. They have sought a separate legal category for fusion facilities, risk-based safety regulations, dedicated licensing pathways and easier access to materials needed for fusion research.

Niti Aayog had asked members to submit written inputs by 20 July and mentioned that they are in the process of studying the inputs received so far.

"Even in the SHANTI Bill, fusion is mentioned only once, where nuclear energy is defined as including both fusion and fission,” Ranjan said. The law is drafted almost entirely around fission safety norms, prompting him to write the detailed letter of recommendations.

Another concern for startups is that fusion plants face the same land and safety rules as fission reactors, including large no-go exclusion zones, even though fusion's lower risk profile doesn't warrant them. Ranjan said a one-kilometre buffer zone meant for fission accidents makes no sense for fusion, where such accidents can't occur, and called for a risk-appropriate framework instead of no regulation at all.

In 2024, US passed a law called the ADVANCE Act that recognized fusion as a separate technology and put it under a regulatory system designed specifically for it, rather than the stricter rules that apply to conventional nuclear reactors.

Perception and funding remain hurdles

Founders say the word ‘nuclear’ itself is a major hurdle, conjuring images of Chernobyl, Fukushima and weapons that leave the public, landlords and investors unable to distinguish fusion from fission.

Siddhartha Durairajan, co-founder and chairman of nuclear fusion startup Hylenr Technologies, recalled struggling to lease office space in Bengaluru in 2024 because landlords were wary of hosting a nuclear company. "In April 2024, we were trying to look for co-working spaces, and everybody was shooing us away, saying, 'You are a nuclear fusion company, you cannot work in our place.' They were afraid something dangerous could happen and didn't want us there. That was a big bottleneck for us," he said.

Experts say startups in the sector will need government support alongside private investment to scale. They point to the space sector as an example, where government initiatives such as IN-SPACe helped private companies grow.

"Nuclear hardware has a longer, more capital-intensive path to revenue than most venture-backed sectors, and the policy apparatus needs to underwrite that gap explicitly rather than assume private capital alone will bridge it," said Ranjan of Speciale Invest.

Experts said fusion power plants are much safer because the reaction cannot spiral out of control. Fusion only works when extremely high temperatures and other conditions are constantly maintained. If anything goes wrong, such as a power failure or a reactor problem, the reaction simply stops on its own. The International Atomic Energy Agency (IAEA) says a successful fusion power plant could provide a steady supply of carbon-free electricity using abundant fuel.

"Fusion energy points the way to the peaceful use of nuclear energy. It offers major advantages such as higher energy density, more abundant fuel resources, less radioactive waste and greater inherent safety, making fusion an ideal solution for the future development of clean energy," Shan Zhongde, chairman of the China Atomic Energy Authority, said in the IAEA's World Fusion Outlook 2025 report.