Why in the News?

The Indian government is contemplating permitting foreign firms to acquire up to 49% ownership in nuclear power facilities, according to three government officials.

What’s in Today’s Article?

• India’s Nuclear Energy Landscape (Background, Proposal, Key Features, Significance, etc.)

Introduction

• India is preparing for a major shift in its energy strategy by considering allowing up to 49% foreign investment in its nuclear power sector.
• This landmark move aims to strengthen the country’s clean energy capacity, reduce dependency on coal, and contribute significantly to carbon emission reduction goals.
• If implemented, it would mark the first time India opens its tightly controlled nuclear energy sector to substantial foreign participation.

Background: India’s Nuclear Energy Landscape

• Nuclear energy plays a relatively small but strategic role in India's electricity mix, currently contributing just over 8 GW, roughly 2% of the installed capacity.
• India's nuclear energy infrastructure is governed strictly by state-owned entities under the Atomic Energy Act of 1960, with no provision for private or foreign ownership till now.
• In 2008, India signed a civil nuclear agreement with the United States, opening doors for billion-dollar deals with American firms.
• However, concerns over the Civil Liability for Nuclear Damage Act of 2010, particularly regarding unlimited liability during accidents, deterred foreign participation.

Key Features of the Proposed Move

• Allowing 49% Foreign Investment
  • The proposed policy will permit foreign companies to own up to 49% equity in nuclear power plants.
  • This foreign ownership would not be automatic; it would require prior government approval to ensure stringent scrutiny.
• Legal Amendments
  • To facilitate this change, the government plans to amend two critical legislations:
    • The Atomic Energy Act, 1960: To allow private sector companies to build, own, and operate nuclear plants and engage in atomic fuel mining and manufacturing.
    • The Civil Liability for Nuclear Damage Act, 2010: To modify liability norms that have been major deterrents for foreign and private investments.
• The draft proposals are expected to be tabled before the federal cabinet soon, with an aim to pass the amendments during the Parliament’s monsoon session in July 2025.

Private Sector Participation

• Besides foreign firms, Indian private conglomerates like Reliance Industries, Tata Power, Adani Power, and Vedanta have also shown interest.
• Together, they are discussing potential investments amounting to around $26 billion in the nuclear sector.

Strategic Importance of the Decision

• Meeting Carbon Reduction Goals
  • India’s pledge to reduce carbon emissions and achieve net-zero emissions by 2070 relies heavily on expanding its clean energy portfolio.
  • Expanding nuclear energy capacity is crucial, especially to meet night-time electricity demands when solar and wind energy are insufficient.
• Target: 100 GW Nuclear Capacity by 2047
  • The government aims to expand nuclear energy capacity from around 8 GW today to 100 GW by 2047, a 12-fold increase.
  • This ambitious target underscores the urgency behind liberalizing the nuclear energy sector.
• Boosting Global Cooperation
  • The move could facilitate deeper energy partnerships with countries like the United States, France, and Russia.
  • Foreign firms such as Westinghouse Electric, GE-Hitachi, Electricité de France (EDF), and Rosatom have expressed interest in participating as technology suppliers, contractors, or service providers.

Safeguards and Regulatory Control

• Despite the opening up, stringent regulatory oversight will continue.
• Foreign investments will require case-by-case government approvals, and the core principles of nuclear non-proliferation and safety will remain uncompromised.

Conclusion

India’s plan to allow 49% foreign investment in nuclear power plants represents a historic transformation of the sector. By inviting global expertise and capital, India is not only addressing its urgent energy and environmental needs but also strengthening its strategic partnerships.

While the move faces legislative and regulatory hurdles, it signals India's determination to align its energy policy with its climate and growth ambitions.