India is poised to significantly expand its nuclear energy sector, with recent policy changes opening doors to foreign investment and private participation. The government is considering allowing up to 49% foreign direct investment (FDI) in nuclear power projects, a move that could revolutionize the country's energy landscape. This decision marks a major shift from its long-standing policy of keeping the nuclear sector exclusively under government control.
The proposed FDI will be implemented in phases, with an initial cap of 26%, followed by a review for potential increase. This phased approach allows the government to carefully monitor and regulate foreign investment, ensuring that national interests are protected. A key condition of this liberalization is that Indian entities must maintain majority ownership in any joint ventures.
This policy shift is driven by India's ambitious goals to increase its nuclear power generation capacity from the current 8 GW to 40 GW by 2035 and a staggering 100 GW by 2047. These targets are crucial to India's commitment to reducing its carbon emissions and achieving net-zero emissions by 2070. Nuclear energy is seen as a vital component of India's clean energy transition, helping to replace carbon-intensive coal with a cleaner, more sustainable source of power.
To facilitate this expansion, the government is planning amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act. These amendments aim to address legal bottlenecks that have previously hindered foreign investment and private sector participation. Specifically, the changes to the liability law seek to limit the financial exposure of equipment vendors in the event of a nuclear accident, capping their liability to the original value of the contract and potentially setting a time frame for when this liability applies.
In addition to policy changes, the government has committed significant financial resources to support the growth of the nuclear energy sector. The Nuclear Energy Mission, with an outlay of ₹20,000 crore (approximately $2.4 billion), will focus on research and development of Small Modular Reactors (SMRs). The goal is to operationalize five indigenously developed SMRs by 2033, showcasing India's technological capabilities and promoting self-reliance in the nuclear field.
Several international and domestic companies have expressed interest in participating in India's nuclear power projects. Foreign players such as Westinghouse Electric, GE-Hitachi, Electricite de France, and Rosatom are considering partnerships, while Indian conglomerates like Reliance Industries, Tata Power, Adani Power, and Vedanta have also held discussions with the government about potential investments.
The government's decision to open the nuclear energy sector aligns with global practices and aims to enhance India's nuclear power capabilities while reducing dependency on public funds. This move is expected to attract significant foreign investment, boost domestic manufacturing, and create new opportunities for technological collaboration.
The upcoming India Nuclear Business Platform (INBP) 2025 in Mumbai highlights the growing momentum around India's nuclear ambitions. This event will bring together policymakers, global corporations, financiers, and technology providers to discuss and shape the future of nuclear collaboration in India. With its vast energy market, strong institutional frameworks, and open investment policies, India is emerging as a key player in the global nuclear landscape.
