In a landmark policy shift that could reshape India’s energy landscape, the government has announced plans to allow foreign companies to acquire up to 49% ownership in nuclear power facilities. This historic decision aims to accelerate India’s transition away from coal dependency while addressing the urgent need for clean energy alternatives.
Breaking New Ground in Energy Policy
The announcement comes after nearly two years of internal deliberations on restructuring India’s nuclear foreign investment framework. Three senior government officials, speaking on condition of anonymity, confirmed that any foreign investments would be subject to prior government approval rather than being automatically permitted-maintaining strategic oversight of this sensitive sector.
“This represents a fundamental reorientation of how we approach energy security and climate goals,” said an official familiar with the decision. “By allowing controlled foreign participation, we’re unlocking both capital and technological expertise essential for our ambitious expansion plans.”
Ambitious Targets: From 8 GW to 100 GW
The policy shift supports India’s bold vision to expand nuclear capacity from the current 8 gigawatts-approximately 2% of installed electricity capacity-to an impressive 100 gigawatts by 2047, representing a twelve-fold increase. This expansion forms a critical component of India’s climate strategy and energy security roadmap.
Nuclear energy has gained renewed importance in India’s energy mix due to its reliability for meeting night-time electricity demands when solar generation ceases. Additionally, as a zero-carbon energy source during operation, nuclear power aligns with India’s international climate commitments.
Legal Amendments Paving the Way
To facilitate this transformation, the government is drafting amendments to two cornerstone legislations:
- The Atomic Energy Act, 1960: Changes would permit private sector companies to build, own, and operate nuclear facilities and engage in atomic fuel production.
- The Civil Liability for Nuclear Damage Act, 2010: Modifications would address the unlimited liability risks during accidents that have previously deterred foreign investors.
These proposals are expected to be presented before the Union Cabinet shortly, with aims to secure parliamentary approval during the monsoon session in July 2025.
The Path to Opening a Closed Sector
India’s nuclear sector has historically operated under strict government monopoly, primarily managed by the Nuclear Power Corporation of India Limited (NPCIL). Despite a watershed 2008 civil nuclear agreement with the United States that theoretically opened doors for international collaboration, actual foreign participation remained minimal.
“The liability framework has been the primary roadblock,” explained Dr. Vikram Sood, energy policy expert at the Indian Institute of Technology Delhi. “When international firms face unlimited liability exposure in the event of accidents, the investment calculus simply doesn’t work. These proposed changes directly address that concern.”
Global and Domestic Interest
The announcement has already generated significant interest both internationally and domestically:
Several global nuclear players have signaled potential participation, including Westinghouse Electric, GE-Hitachi, Electricité de France (EDF), and Russia’s Rosatom. These companies have maintained technology relationships with India but can now potentially enter as equity partners.
On the domestic front, industrial heavyweights including Reliance Industries, Tata Power, Adani Power, and Vedanta are reportedly exploring combined investments of approximately $26 billion into nuclear energy projects.
Balancing Act: Security and Development
The policy maintains careful guardrails while opening new possibilities. The 49% foreign ownership ceiling ensures Indian control of these strategic assets. Additionally, the requirement for prior government approval provides an extra layer of scrutiny.
“We’re creating opportunities while preserving sovereignty,” noted a senior official from the Department of Atomic Energy. “Every proposal will undergo rigorous evaluation to ensure alignment with national security interests and our non-proliferation commitments.”
Global Relations and Trade Implications
This policy shift arrives amid evolving international dynamics. Energy cooperation-particularly in advanced technologies like nuclear power-increasingly forms the cornerstone of strategic partnerships.
The opening could potentially influence ongoing tariff discussions with the United States, though officials remain uncertain whether this would be directly connected to any specific trade agreement. Nevertheless, the move signals India’s commitment to energy cooperation with advanced economies.
The Challenge Ahead
Despite this enabling policy framework, significant hurdles remain before nuclear energy can realize its full potential in India:
- Financing the massive capacity expansion will require innovative approaches beyond traditional government funding
- Public acceptance and site acquisition continue to present challenges for new nuclear projects
- Balancing imported technology with indigenous development remains a delicate consideration
Looking Forward
As India accelerates toward its clean energy future, this policy shift marks a pivotal moment in the country’s industrial and environmental journey. By inviting controlled foreign participation in its nuclear sector, India is signaling both urgency and pragmatism in addressing the twin challenges of energy security and climate change.
With these amendments expected to pass in the July parliamentary session, the latter half of 2025 could witness the first formal applications from foreign entities eager to participate in one of the world’s most promising nuclear energy markets.
