India considers phased foreign investment of up to 49% in nuclear energy sector

Initial FDI cap may be set at 26% with future relaxations; major policy reforms underway to attract private and global players

May 22, 2025

Private sector entry will require Indian majority ownership, as outlined in the proposed regulatory framework

Legislative amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act are being planned to enable private participation

The government aims to scale up nuclear power capacity from 8 GW to 40 GW by 2035, and to 100 GW by 2047

An INR 20,000 crore Nuclear Energy Mission will support R&D of Small Modular Reactors, with five indigenous SMRs expected to be operational by 2033

A senior government official said that India is considering allowing foreign direct investment of up to 49% in the nuclear energy sector, although the liberalisation would be carried out in stages. The official noted that an initial cap of 26% could be introduced and later reviewed for potential increase, depending on the sector’s progress and strategic assessment.

The government is also expected to include a requirement that Indian entities retain majority ownership in any joint venture involving foreign investment in the proposed framework.

Currently, nuclear energy remains on the negative list for FDI and is closed to private participation. However, New Delhi is now looking to open up the strategic sector as part of its broader push to expand nuclear power capacity to 40 GW by 2035 from the current 8 GW, and to 100 GW by 2047.

To enable this, Finance Minister Nirmala Sitharaman, in her February budget speech, announced the government’s intention to amend key legislation — including the Atomic Energy Act and the Civil Liability for Nuclear Damage Act — to facilitate private sector involvement.

She stated that achieving 100 GW of nuclear energy capacity by 2047 is critical for India’s energy transition goals. The amendments, she said, are essential for building active private partnerships in the sector. As part of this effort, an INR 20,000 crore Nuclear Energy Mission is also being set up to drive research and development in Small Modular Reactors (SMRs), with at least five indigenous SMRs targeted for operationalisation by 2033.

The official confirmed that the drafting of legislative changes is currently underway, with committees of senior officials engaged in consultations with stakeholders. These discussions aim to finalise the legal framework that will govern private and foreign investment in the sector.

Global players have shown keen interest in India’s nuclear energy plans. According to an older report, Russian nuclear company Rosatom has offered its expertise in building SMRs, while France’s state-owned EDF has also expressed interest.

In parallel, the government is working on a comprehensive roadmap to achieve 100 GW of installed nuclear capacity by 2047. The plan will outline various technologies and investment strategies that could be deployed to meet this ambitious target.

Source: Economic Times

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