N-Deal: India Inc sees $40 bn foreign investment

NEW DELHI: As many as 400 Indian and foreign firms are seen as the beneficiaries of the far-reaching verdict in Vienna on Saturday where the 45-member Nuclear Suppliers Group (NSG) decided to resume civilian nuclear commerce with India.

India's apex industry bodies, which have hailed the decision, also feel that the country can now attract over $40 billion in foreign investment over the next 10-15 years as the result of private sector entry into India's nuclear power generation.

"The go-ahead to the nuclear deal will signal the building of scores of nuclear plants in India on assured fuel supply," said Amit Mitra, the secretary general of the Federation of Indian Chambers of Commerce and Industry (Ficci).

"This will trigger the participation of 200 firms with capabilities to operate, and maintain nuclear plants, but put on the Entities List by the US in 2005 for perceived possession of technologies for nuclear plants or dual-use technology."

That list has since been pruned to about four, giving the 200-odd companies full play in nuclear power production.

"We expect another 200 medium and small firms to get into the act as ancillary producers to the big companies, thereby giving a new direction to efficient and cheaper power production in the country," Mitra added.

The NSG's decision to grant India a clean waiver from its existing rules, which forbid nuclear commerce with any country, which has not signed the Nuclear Non-Proliferation Treaty (NPT), came at its meeting in Vienna on Saturday afternoon.

The historic moment, which will end more than three decades of nuclear isolation for India, came after three days of intense diplomacy by the US and India in the nuclear cartel that controls the global flow of nuclear fuel and technologies.

"Today's development is a major confidence-building move for the international community to engage with India especially in high technology trade," said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII).

"It will provide opportunity for Indian manufacturers to supply spares and components to the global manufacturers of nuclear power plants besides providing business opportunities for Indian power plant construction companies."

The Associated Chambers of Commerce and Industry (Assocham) that had conducted a survey among 300 chief executives recently also says that 400 firms, domestic and international, may get a chance to build nuclear power plants.

An overwhelming 85 percent of the 300 chief executives polled held the view that modifications to India's Atomic Energy Act of 1962 could help the country to generate some 20,000 MWe (unit of nuclear power) by 2020.

The modification, which the chamber suggested should be immediate by way of a presidential notification, is necessary to facilitate the entry of the private sector in nuclear power generation. The act and the decades of India's nuclear isolation had resulted in capping the country's nuclear power generation capacities to an extent of just 3,900 MWe in over 60 years of independence.

As a result, out of a total installed generation capacity of about 145,000 MW of electricity, 70 is accounted for through thermal fuel and 20 percent by hydro, with nuclear energy contributing to just two percent. The remaining capacities come by tapping the various sources of non-conventional energy such as solar, wind, biomass and tidal waves.

Following the NSG waiver, the India-US nuclear deal will head for the US Congress, which meets Sep 8 to discuss and approve the 123 India-US bilateral pact to seal the negotiations that were started more than three years ago.

The two countries are expected to formally sign the bilateral agreement when Prime Minister Manmohan Singh goes to Washington towards the end of September, eventually restoring nuclear trade with the US after a gap of 34 years. The US and the rest of the world imposed economic sanctions when India first conducted its nuclear test in 1974.

source: economictimes