Government shifts to producer price index for contract escalations

The Department of Expenditure has instructed ministries and departments to transition from Wholesale Price Index (WPI) to Producer Price Index (PPI) for price escalation clauses in government contracts. The shift aligns with international practice and International Monetary Fund recommendations for measuring inflation at the producer level rather than wholesale level.

Price escalation clauses allow contract payments to adjust based on changes in material, labour, and fuel costs during project execution, distributing inflation impacts between government and contractors. The commerce ministry began issuing monthly PPI data in June for both goods and services, with manufactured items representing 69.93 percent of output PPI, followed by agriculture, forestry, and fishing at 22.16 percent.

PPI adoption encouraged for all future government procurement contracts
Seven service sectors initially covered in Service PPI phase, with remaining sectors to follow
Transition supports phasing out wholesale price inflation metrics over five years

India targets five new reactor startups this decade

India plans to operationalize five new nuclear reactors during the current decade as part of a broader energy security strategy, with a target of 100 GW of nuclear power capacity. The SHANTI Act, passed in Parliament, provides the legislative framework for advancing these ambitions.

The Prototype Fast Breeder Reactor at Kalpakkam, Tamil Nadu, achieved criticality this year, marking progress in domestic reactor technology. Government policy emphasizes reducing dependence on imported energy and strengthening self-reliant nuclear capabilities.

Five new reactor startups targeted for the decade
100 GW nuclear capacity goal
SHANTI Act framework enacted
Prototype Fast Breeder Reactor operational

Energy security context

India imports approximately 90 percent of crude oil and half of natural gas requirements, creating vulnerability to external supply disruptions. The nuclear expansion complements diversification efforts across energy sources, including expanded liquefied natural gas sourcing and deepwater oil and gas exploration.

Crude oil sourced from 41 countries
LNG imported from 15 countries
Solar capacity increased to 160 GW
Piped cooking gas coverage expanded to 700 cities

Draft SHANTI rules set licensing, safety oversight and foreign technology pathway for India nuclear projects

The Department of Atomic Energy has rolled out draft SHANTI rules and regulations that are intended to frame a broader nuclear power ecosystem in India, including private participation and captive nuclear generation. The draft covers licensing, safety oversight and nuclear liability. It also provides for a single composite licence covering building, owning, operating and decommissioning a nuclear power plant or reactor.

The rules allow applicants to seek “in-principle” approval before finalising a site or technology, which would support negotiations with reactor technology suppliers and help applicants secure land and infrastructure.

The draft also recognises captive use cases, including power for energy intensive industries such as aluminium and cement, and applications such as data centres, semiconductor manufacturing and AI. Foreign reactor technology can be sourced, subject to regulatory approval and operation in the country of origin.

Submission deadline for views on the draft rules and regulations: September 4.