US Firm to Build Nuclear Power Plants in India

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by Linnea Logie
Nuclear power figures prominently in current Indian energy policy, which aims to increase the share of non-fossil-fuels in national electricity production from current levels of around 27% to 40% by 2030. Image via Flickr user Bagalute.

President Obama leveraged the the US-Japan relationship to strengthen ties with India in June 2016, reaching an agreement with visiting Indian Prime Minister Narenda Modi to have Westinghouse Electric Company, the US subsidiary of Toshiba Corporation, build six nuclear plants in India’s Andhra Pradesh with the state-owned Nuclear Power Corporation of India (NPCI). In so doing, the president not only deepened the US commitment to helping New Delhi meet energy-efficiency targets over the coming decades, but also raised the profile of the Indo-US relationship and promoted trilateral cooperation with Japan. 

Westinghouse, which is headquartered near Pittsburgh, Pennsylvania and holds the largest installed base of nuclear power plants operating worldwide, is eager to help New Delhi deliver “clean, reliable energy” to the Indian public, which as an energy market is “among the largest in the world.”  The company is currently building eight nuclear power reactors around the globe (four in the United States, and four in China), plans to develop plants in the UK and Bulgaria, and hopes to net fifty new contracts with India and China over the coming ten years.

The multi-billion-dollar nuclear deal was a long time in the making, marking the first contract drawn up under the Indo-US bilateral civil nuclear pact struck in 2005. The divergence of Indian liability rules from international norms (which oblige nuclear plant operators, rather than foreign equipment suppliers, to cover the costs of accidents) prevented US-based reactor makers from landing such deals in the years since the accord took effect in 2008. It was not until the Obama and Modi administrations reached a “breakthrough understanding” on nuclear cooperation in January 2015 that New Delhi ratified the Convention on Supplementary Compensation for Nuclear Damage and made other critical legal adjustments, giving Westinghouse and its US-based competitors the green light to pursue construction projects in India.

It now falls to NPCI and Westinghouse to finalize the contract. Land-acquisition transactions and negotiations, once finalized, would allow for construction to begin in 2017, but India must first forge a civil nuclear pact with Japan, home to Westinghouse’s parent company. Such a deal could come to pass by the end of 2016, as Tokyo, facing limited demand at home, is motivated to expand the international competitiveness and profitability of Japanese businesses.

New Delhi has long sought to work with the US nuclear industry and—even as a rapidly growing population drives domestic energy consumption skyward—aims to slowly pare back national reliance on coal and other fossil fuels by boosting India’s nuclear capacity nearly twelvefold by 2032. Prime Minister Modi is particularly keen to redress what he calls India’s “energy problem”: irregular and deficient electricity access among households. Nuclear power may help connect underserved parts of the country to the grid in coming years, raising standards of living and spurring Indian economic growth.

Linnea Logie is a Research Intern at the East-West Center in Washington and holds a bachelor’s degree in Political Science and History from the University of Connecticut.