India to Allow 49% Foreign Stake Investment in Nuclear Power

Why in the News?

India is considering allowing foreign companies to take up to a 49% stake in its nuclear power plants a major policy shift for one of the country’s most protected sectors.

This initiative is part of a larger strategy to boost clean energy production, lessen dependence on coal, and achieve ambitious carbon emission reduction goals. To support this move, the government is working on amending key nuclear legislations, with the objective of opening the sector to both foreign investors and domestic private firms by the monsoon session of Parliament in July 2025.

Background Context

• Since 2023, the government has been reviewing its foreign investment framework for the nuclear sector.
• India’s current nuclear power generation is around 8 GW, accounting for just 2% of the total installed electricity capacity.
• A 2008 civil nuclear agreement with the US opened possibilities for massive nuclear deals but no significant foreign investment materialized due to concerns over nuclear liability risks.
• As India looks to transition from coal to cleaner energy, expanding nuclear energy has become crucial because solar and wind energy alone cannot meet night-time energy demands.

Proposals Breakdown

Policy Change Proposed

• India plans to allow foreign ownership up to 49% in nuclear power projects, subject to prior government approval (not automatic clearance).

Legal Amendments

• The government plans to amend two important legislations:
• Civil Liability for Nuclear Damage Act, 2010

Atomic Energy Act, 1960

• These changes aim to relax liability laws and enable private and foreign companies to build, own, and operate nuclear plants and mine and manufacture atomic fuel.

Cabinet and Parliament Timeline

• The necessary proposals are expected to be placed before the Union Cabinet soon, with the aim to pass the amendments in the upcoming Monsoon Session (July 2025).

Impact on Nuclear Capacity Goals

• The reforms are critical for India’s goal of expanding nuclear capacity twelvefold, from around 8 GW to 100 GW by 2047.

Foreign and Domestic Interest

• Several foreign companies like Westinghouse Electric, GE-Hitachi, Electricite de France (EDF), and Russia’s Rosatom have shown interest in participating as technology providers and contractors.
• Meanwhile, domestic giants like Reliance Industries, Tata Power, Adani Power, and Vedanta are reportedly looking to invest around $26 billion into the nuclear energy sector.

Potential for Tariff Negotiations

• Opening up the sector might also spur negotiations with the US on nuclear power tariffs, although it is unclear if this will be formally tied to any new trade deals.

Existing Challenges

• Historically, foreign companies have been cautious due to fears of unlimited liability for nuclear accidents under Indian laws — a key concern the upcoming amendments are expected to address.