• India plans to allow up to 49% FDI in nuclear energy, aiming to expand clean power and cut carbon emissions by 2047.

India Opens the Door to 49% FDI in Nuclear Energy in a Bid for a Cleaner Future

In a major shift that could redefine its energy landscape, India is poised to allow foreign direct investment (FDI) of up to 49% in its nuclear power sector, according to government insiders. The move, still under discussion, is part of New Delhi’s broader strategy to decarbonize its economy and meet ambitious clean energy targets by 2047.

The government’s guarded approach to its nuclear sector—long seen as a symbol of national sovereignty—now faces a pivotal moment. Driven by a pressing need to reduce dependence on coal, policymakers are crafting a plan to welcome international players into one of the world’s most tightly regulated energy markets.

Unlocking New Avenues for Foreign Investment

India has been mulling changes to its nuclear investment framework since 2023, but the urgency to act has sharpened. As coal remains the backbone of India’s power grid, the government recognizes that achieving its carbon neutrality goals demands aggressive scaling of alternative energy sources.

Allowing foreign companies a stake of nearly half in nuclear power projects could be a game-changer. It might also create opportunities for tariff negotiations with the United States, though sources clarify that these discussions are not directly tied to any formal trade pact. A glance back to 2008 highlights the potential: after signing a historic civil nuclear agreement with Washington, India opened the door to billions of dollars in prospective deals—most of which stalled over liability concerns.

Addressing Longstanding Hurdles

Foreign investors have historically balked at India’s strict nuclear liability laws, which expose suppliers to extensive financial risk in the event of an accident. No foreign investment has materialized so far, despite the strong initial optimism following the US-India nuclear deal.

However, the current proposal aims to sweep away those barriers. Alongside the FDI reforms, the government plans to amend the Civil Liability for Nuclear Damage Act of 2010 and the Atomic Energy Act of 1960—crucial steps to making the sector more investor-friendly. These changes, insiders suggest, could be presented to the Union Cabinet soon, with the goal of pushing them through Parliament during the July monsoon session.

Private Players Poised to Enter the Nuclear Arena

If the reforms pass, they could usher in an entirely new era: private companies—both Indian and international—would not only invest in nuclear plants but also build, own, and operate them. They would even be allowed to mine and manufacture atomic fuel, significantly diluting the government’s long-standing monopoly.

The Atomic Energy Act amendments are designed to facilitate this transition while maintaining strict regulatory oversight. Importantly, even with the FDI cap raised, all foreign investments would still require prior government approval, ensuring national security remains a top priority.

Global and Domestic Giants Show Interest

Major global players are already circling. Westinghouse Electric, GE-Hitachi, Electricité de France, and Russia’s Rosatom have expressed interest in partnering on India’s nuclear projects, whether as technology providers, suppliers, contractors, or service firms.

Domestically, some of India’s biggest conglomerates are gearing up to seize the opportunity. Discussions have reportedly been held with Reliance Industries, Tata Power, Adani Power, and Vedanta—companies willing to invest an estimated $26 billion to energize India’s nuclear expansion.

Nuclear Power: A Critical Piece of India’s Energy Puzzle

Currently, India’s nuclear generation capacity stands at a modest 8 gigawatts—only about 2% of the country’s total electricity production. The government’s vision is far bolder: ramping up that capacity twelvefold to 100 gigawatts by 2047.

Nuclear power, while controversial, offers a crucial advantage. Unlike wind or solar energy, it provides a consistent supply of electricity, crucial for meeting high night-time energy demand. In an era of climate urgency, nuclear energy could serve as a critical bridge to a cleaner, more resilient energy future.

The Road Ahead

As the global conversation around clean energy intensifies, India’s pivot toward nuclear reform signals both ambition and pragmatism. The willingness to open up its most protected sector shows how seriously the government is treating its climate commitments—and how keen it is to attract the global capital and expertise needed to meet them.

Still, success will depend on careful policy crafting, transparent regulation, and maintaining public trust. As India stands at this nuclear crossroads, its decisions could set a precedent for emerging economies worldwide navigating the complex path toward sustainable development.

Disclaimer:
This article is intended for informational purposes only. It does not constitute investment, legal, or policy advice. Readers should consult qualified experts before making decisions related to nuclear energy investments or policy developments.

source : The Financial Express