Major shift: PMO mulls to open gates for FDI in nuclear power
Mumbai: In a bid to make India a global player in nuclear power sector, the Modi government is contemplating to allow Foreign Direct Investment (FDI) in the nuclear power area.
The decision, likely to be considered by the Prime Minister's Office (PMO), would be a paradigm shift in India's nuclear power policy, and subsequently open the gates for multinational companies to invest in the country's nuclear energy projects.
After deliberations with the PMO, the Department of Atomic Energy (DAE) has sought legal opinion from the Union Law Ministry on whether foreign investment can be allowed in the nuclear power sector, if the FDI policy is amended.
"The department (DAE) proposes to submit a report for consideration to the PMO after seeking guidance from the Atomic Energy Commission for amending the policy," says the letter by Joint Secretary, DAE (Anushakti Bhawan), dated January 8 this year.
The letter, reviewed by IANS, further reveals that DAE's view is clear on private equity in nuclear power sector.
"DAE's stand is that the Atomic Energy Act in no way prohibits private sector participation in nuclear power projects," the letter adds.
An official of the DAE explained the department's stand in simpler words: "The Act allows private investment. However, the FDI policy of the government does not permit foreign investment in nuclear projects. Once the FDI policy is amended, it would open doors for more funds in the nuclear power sector."
Sources said that several foreign companies, including Westinghouse Electric Company (WEC) and GE-Hitachi of the US, Electricite de France (EDF) of France and Rosatom of Russia have expressed keen interest in participating in India's nuclear power projects.
As per government sources, these MNCs are interested to invest in various areas such as technology, supplies or as contractors and service providers. However, these foreign companies can't yet invest in the country's increasing number of nuclear power projects, as the FDI policy does not permit them to do so.
In India, nuclear power is the fifth largest source of electricity after coal, gas, hydro-electricity and wind power. Till last year, India had 22 nuclear reactors installed in seven nuclear power plants spread across the country.
The nuclear power plants have total installed capacity of 6780 MW. Sources said that if FDI is allowed in the nuclear power sector, it would witness a very large scale expansion.