India Opening the Doors to Boost Clean Energy Goals with 49% Foreign Investment
India may soon allow 49% foreign investment in its nuclear power plants, according to three government sources. The proposal marks a potential turning point in one of India’s most tightly controlled sectors, as the country seeks to shift away from coal and meet its carbon reduction targets.
Discussions on changing the foreign investment rules in nuclear energy began in 2023. Now, with growing urgency to expand cleaner power sources, India is considering easing long-standing restrictions that have deterred global investors.
The planned reforms come as India aims to multiply its nuclear power capacity twelvefold, from just over 8 gigawatts (GW) currently to 100 GW by 2047. At present, nuclear power accounts for only 2% of the nation’s total electricity generation capacity.
Legal Reforms and Private Sector Participation
Officials said that any foreign investment in nuclear plants would still require prior government approval. Automatic approvals will not be allowed under the proposed changes.
To pave the way for these reforms, amendments to the Atomic Energy Act of 1960 and the Civil Liability for Nuclear Damage Act of 2010 are expected to be submitted to the federal cabinet soon. The government plans to seek Parliament’s approval during the monsoon session in July.
These legislative changes would allow the government to license private firms to build, own, and operate nuclear facilities, as well as mine and manufacture atomic fuel.
The proposal also includes measures to ease India’s strict nuclear liability laws, which have previously discouraged companies from entering the market due to fears of unlimited liability in case of accidents.
Domestic and Global Interest Grows
India’s move to open up its nuclear sector could spark renewed interest from international players. Firms such as Westinghouse Electric, GE-Hitachi, Electricité de France, and Russia’s Rosatom have all shown interest in India’s nuclear projects, aiming to contribute as technology partners, contractors, or suppliers.
Several major Indian conglomerates have also expressed interest. Reliance Industries, Tata Power, Adani Power, and Vedanta Ltd are reported to be in discussions with the government to invest a combined total of around $26 billion in nuclear energy.
The changes could also influence future tariff negotiations with the US, though sources clarified that this would not necessarily be tied to any trade deal.
By allowing foreign and private sector involvement, India hopes to rapidly accelerate its transition to low-carbon energy while meeting the country’s rising power demand, particularly during night-time hours when solar energy is less effective.
with inputs from Reuters