Introduction
In a landmark policy development, the Indian government is considering allowing up to 49% foreign direct investment (FDI) in its nuclear power
sector. This would be the first major opening in a domain traditionally reserved for state control. The move aims to boost clean energy capacity, attract private capital, and support India’s net-zero carbon goals by 2070.
Background: India’s Nuclear Framework
India’s nuclear energy sector, contributing around 8 GW or 2% of the total power capacity, is governed by the Atomic Energy Act of 1960. Until now, the sector has remained closed to private and foreign entities due to national security and safety concerns. Although the 2008 civil nuclear deal with the U.S. allowed for international cooperation, the Civil Liability for Nuclear Damage Act, 2010 discouraged investment due to its stringent liability clauses.
Key Highlights of the Proposed Policy
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49% Foreign Stake
Foreign companies may be permitted to hold up to 49% equity in nuclear power projects, subject to rigorous government security and compliance checks. -
Legislative Amendments
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Atomic Energy Act, 1960: To allow private and foreign participation in building and operating nuclear facilities.
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Civil Liability Act, 2010: To ease liability provisions that have hindered foreign investment. Draft changes are expected to be introduced in the monsoon session of Parliament in July 2025.
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Private Sector Involvement
Major Indian firms like Reliance, Tata Power, Adani, and Vedanta are reportedly interested, with combined investment plans estimated at $26 billion.
Strategic Importance
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Achieving Net-Zero Goals
Nuclear power offers a stable, non-polluting energy source that complements solar and wind, especially during non-daylight hours. -
Target: 100 GW Nuclear Capacity by 2047
To meet this ambitious target, India needs robust investment and liberal policy reforms. -
Boosting Global Partnerships
The reform is expected to attract interest from companies like Westinghouse (USA), GE-Hitachi, EDF (France), and Rosatom (Russia). -
Strict Regulatory Oversight
All foreign investments will be reviewed individually to ensure non-proliferation compliance and safety standards.
Conclusion
India’s plan to allow 49% foreign investment in its nuclear sector is a transformative step toward energy security and environmental sustainability. For IAS aspirants, understanding such policy shifts is vital for topics like Energy Security, Environment, Economy, and International Relations under the UPSC syllabus.