The Government of India is reportedly exploring the possibility of permitting foreign companies to hold up to 49% ownership in the nation’s nuclear power facilities.
This potential shift in policy is part of the country’s strategy to enhance its nuclear energy output and reduce reliance on coal.
The move aims to attract increased foreign capital and expedite the transition towards cleaner energy alternatives, Reuters reported, citing three government sources familiar with the matter.
Talks surrounding changes to India’s foreign investment regulations in the nuclear sector have been ongoing since 2023.
With a pressing need to replace polluting coal with greener sources of energy, expanding nuclear power is seen as an essential part of the plan. Nuclear energy could provide a stable and low-emission alternative to coal-fired power plants.
Investing in India’s nuclear sector could also have broader geopolitical and economic consequences, especially with the US.
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By GlobalDataAlthough there is speculation that foreign investments might prompt tariff negotiations, government officials have not confirmed if this would be tied to any specific trade agreement.
A significant nuclear pact with the US in 2008 laid the groundwork for multi-billion-dollar deals with US businesses.
Despite the agreement, foreign companies have been reluctant to invest in India’s nuclear facilities due to concerns about unlimited liability in the event of an accident.
The latest policy proposals aim to address these issues by modifying nuclear liability regulations, encouraging more private sector participation.
Should the government proceed with these reforms, along with plans to bring in domestic private players, the move could eliminate existing barriers to expanding nuclear energy.
The government aims to raise nuclear capacity by 12 times to 100GW by 2047.
Foreign investments in India’s nuclear plants would still require prior approval from the government rather than being automatically granted, sources said.
The sources familiar with the matter suggested that the necessary amendments to legal frameworks are expected to be presented to the federal cabinet soon, with the goal of passing these changes during the monsoon session of parliament in July.
This would include revisions to both the Civil Liability for Nuclear Damage Act of 2010 and the Atomic Energy Act of 1960.
Revisions to the Atomic Energy Act would allow private entities to construct, own and operate nuclear power stations, as well as engage in the extraction and production of nuclear fuel.
This could open up new avenues for both domestic and foreign participants in the sector, aligning with India’s long-term energy objectives.
At present, nuclear energy accounts for just over 8GW, or 2%, of India’s total installed electricity capacity.
As the country moves away from coal, nuclear power is expected to play a vital role in complementing renewable energy sources such as wind and solar, particularly during periods of high demand in the evening.
Several international companies including Westinghouse Electric, GE-Hitachi, Electricité de France (EDF) and Rosatom have expressed interest in collaborating on India’s nuclear energy projects.
In addition, major Indian companies such as Reliance Industries, Tata Power, Adani Power and Vedanta are in talks with the government regarding an estimated $26bn (Rs2.22trn) investment in the nuclear power industry.
