Potential Shift in India’s Nuclear Investment Framework
India is considering allowing foreign companies to take up to a 49% stake in its nuclear power plants, a move that could significantly open up the country’s nuclear sector. According to three unnamed government sources, the government is drawing up plans to allow foreign investments in nuclear power plants as part of its strategy to enhance nuclear capacity and reduce reliance on carbon-intensive coal. This decision comes amid India’s growing focus on transitioning to cleaner energy sources to meet its carbon emission reduction targets.
Highlights:
India may allow up to 49% foreign investment in nuclear power plants.
Plan aims to boost nuclear capacity and reduce dependence on coal.
Growing Need for Nuclear Energy
The need to increase nuclear capacity has become more urgent as India seeks to replace coal with cleaner energy alternatives. The government has been considering changes to its nuclear foreign investment framework since 2023, and it now views the expansion of nuclear energy as a crucial step in achieving its sustainability and energy diversification goals.
Investment in the nuclear sector could also become a point of negotiation in trade discussions, particularly with the United States. However, it remains unclear whether this potential shift will be linked to any broader trade deals, as the details are still under discussion.
Highlights:
Nuclear power is seen as key to reducing reliance on coal.
Foreign investment could play a role in trade negotiations with the United States.
Historical Context and Legal Challenges
India’s nuclear sector has long been shielded from foreign investment, primarily due to legal and regulatory barriers. A civil nuclear agreement signed with the United States in 2008 led to billions of dollars in potential deals with U.S. companies, but these companies have been discouraged by the risks associated with nuclear accidents and the absence of adequate liability protections.
The government’s proposed changes aim to resolve these concerns by easing nuclear liability laws and allowing private domestic players to enter the sector. If these changes are enacted, they could pave the way for a significant expansion of India’s nuclear power capacity, which is currently set at just over 8 GW, or 2% of the country’s installed electricity capacity.
Highlights:
Foreign investment in nuclear energy has been hindered by legal and liability concerns.
Proposed legal amendments could open the sector to private and foreign players.
Legislative Changes Under Consideration
The government is considering amendments to the Civil Liability for Nuclear Damage Act of 2010 and the Atomic Energy Act of 1960. These amendments would allow the government to issue licenses to private companies to build, own, and operate nuclear plants, as well as mine and manufacture atomic fuel. The changes are expected to be presented to the federal cabinet soon, with a goal of passing them in the monsoon session of Parliament in July.
Foreign companies such as Westinghouse Electric, GE-Hitachi, Electricité de France, and Rosatom have shown interest in participating in India’s nuclear projects as technology partners, suppliers, contractors, and service providers. Additionally, Indian conglomerates including Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd have held discussions to invest approximately $26 billion in the nuclear power sector.
Highlights:
Legislative changes could allow private companies to build and operate nuclear plants.
International and domestic players are interested in investing in India’s nuclear energy sector.
Current State of Nuclear Power in India
Currently, India’s nuclear power generation stands at just over 8 GW, representing a small fraction of the country’s total installed electricity capacity. As India looks to diversify its energy mix, nuclear power is being considered as a complement to renewable energy sources like wind and solar, especially for meeting high energy demand during night-time hours.
Highlights:
India’s nuclear power generation is currently limited to 8 GW, or 2% of total capacity.
Nuclear energy is seen as a supplement to wind and solar power for meeting nighttime demand.
