India open to nuclear business with France, Russia4 min read . Updated: 26 Sep 2008, 11:09 PM IST
India open to nuclear business with France, Russia
Mumbai: Indian nuclear energy officials said they would like to do business with General Electric Co. (GE) and other US firms. But if they can’t, there’s always France and Russia.
Even as a landmark US-India nuclear accord hangs in limbo in the US Congress, the global gates of nuclear trade with India are now open.
“If a deal with Congress doesn’t happen, we will have business with other countries. So simple," said S.K. Malhotra, a spokesman for India’s department of atomic energy.
India reached nuclear trade agreements with Russia and France in January, though the government has held out on implementing them until a US deal goes forward, said Shreyans Kumar Jain, chairman of state-run Nuclear Power Corp. of India Ltd (NPCIL), which runs all 17 of the country’s nuclear reactors.
The agreement before Congress would overturn three decades of US policy by allowing nuclear trade with India, even though India has not signed a global treaty against the spread of nuclear weapons.
The deal enjoys broad support among leaders of both American political parties, but with other priorities on lawmakers’ plates, there’s no certainty it will get the nod before Congress adjourns this month ahead of November elections. What would happen then is unclear.
Meeting on Thursday in Washington, Indian Prime Minister Manmohan Singh and US President George W. Bush expressed hope that Congress will approve the agreement.
Singh was to go on to France, where he was expected to ink India’s nuclear agreement with that country.
American companies worry they could be shut out of the Indian market. GE helped build India’s first nuclear reactor in the 1960s, and the company would love to rekindle that relationship.
“It’s a $30 billion (Rs1.39 trillion)-plus market in India. There’s a huge opportunity for a company like GE," said Kishore Jayaraman, regional head of GE operations in India, Sri Lanka and Bangladesh. “We have been pushing for it."
Today, India gets just 3% of its energy—about 4,100MW— from nuclear power. By 2032, the government plans to quadruple total generating capacity, to 700 gigawatts, with nuclear accounting for 63,000MW. That adds up to about 40 new nuclear reactors, worth some $80 billion, according to Jain.
A key limiting factor on India’s nuclear expansion has been access to uranium. Despite an aggressive hunt in basins, thrusts and folds across the country, known domestic deposits will support only 10,000MW of nuclear capacity.
“All reactors are going to be sourced from foreign vendors and tied to fuel supply agreements," Jain said.
Previously, India was largely unable to buy nuclear fuel and technology from abroad, because of its refusal to sign the Nuclear Non-Proliferation Treaty and its testing of atomic weapons.
On 6 September, under heavy lobbying by the US, the 45-nation Nuclear Suppliers Group (NSG) made a historic exception for India. That opens the door for nuclear sales to India but, in the US case, Congress must approve.
Jain said NPCIL hopes to finalize contracts with GE, Westinghouse Electric Corp., France’s Areva SA and Russia’s Rosatom State Nuclear Energy Corp. to build a first round of eight reactors starting in 2009.
The government, he added, plans to take a 30% equity stake in the new reactors, and borrow to raise the rest.
Rosatom is already helping India build two nuclear reactors, under an agreement that predates Russia joining the NSG.
Areva has been active in pursuing business, with chief executive Anne Lauvergeon joining French President Nicolas Sarkozy on his January state visit, according to three Indian officials.
If the deal doesn’t go through the Congress, said Ron Somers, president of US-India Business Council, “we’ll be the only one shut out".
“It’s like sitting on our hands watching a football game, not being able to play," he added.
GE has been in close talks with the Indian government, Jayaraman said, but the company cannot, by law, enter into advanced discussions without getting a green light from the Congress.
“We have not had any detailed discussions," he said.
A lot of Indian companies are also hopeful.
Currently, private companies cannot operate nuclear reactors, but India is separating its civilian and military nuclear programmes as part of the US-India nuclear deal. That could pave the way for deeper private sector involvement on the civilian side, Montek Singh Ahluwalia, deputy chairman of India’s Planning Commission, had said in a recent interview.
Jain of NPCIL said a raft of companies, including the Tata group, Reliance Power Ltd, GMR Infrastructure Ltd, GVK Industries Ltd, the Essar Group and state-run National Thermal Power Corp. Ltd have expressed interest in running nuclear power plants in the future.
Parts suppliers and builders, such as Hindustan Construction Co. Ltd, Bharat Heavy Electricals Ltd, Larsen and Toubro Ltd (L&T), Gammon India Ltd and Godrej and Boyce Manufacturing Co. Ltd could also benefit from India’s nuclear build-out.
Deepak Morada, a spokesman for L&T, said he thinks the capital and manufacturing requirements needed to help 400 million Indians, who now live by candlelight, switch on the lights are simply too massive for the government to handle alone.
“We are ready to participate," he said.