Changes in US regulations on trading nuclear technology with India may turn into big money for a host of firms looking to take advantage.
Weeks before the US congress passed the nuclear bill with India, American companies went shopping in the country's enormous energy market, looking for prospective clients who had needs ranging from nuclear fuels to reactors to radioactive waste elimination.
The largest trade mission from the US to any country was in Mumbai last month, and 30 of its 250 members represented 14 American firms in the nuclear sector. Nuclear reactor manufacturers Westinghouse, General Electric and BWX Technologies and fuel processing specialist Thorium Power were among the companies who met nuclear policy officials and visited a nuclear site in India.
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In view of the estimates, it's no surprise that foreign firms are so keen on getting into nuclear power generation. At present, India imports one-third of its domestic power needs.
Ron Summers of the US-India Business Council says at least $100 billion worth of investment will be needed to develop nuclear energy here over the next 20 years.
Among the estimated 400 nuclear reactors in the world, the US has 104 and India has just 16, though India's population is more than triple the size of the US The government had set a target of generating 20,000 megawatts of nuclear power by 2020, but it's now expected to sharply expand that. India's ability to scale up its current production of 3,900 megawatts is restricted by its lack of access to the international nuclear fuel market.
New Delhi's refusal to sign the Nuclear Non-Proliferation Treaty resulted in the 45-nation Nuclear Suppliers Group barring its members from exporting nuclear fuel to the energy-hungry nation.
Timothy J Richards, the director of GE's International Energy Policy, says if the nuclear deal with the US comes through and global restrictions are eased, his firm hopes to apply for licenses to develop nuclear technology. Power generation will be the key investment area.
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Nuclear companies' reps say India can no longer afford to rely on nonrenewable, often polluting resources like wood, oil and coal to meet its growing energy needs. Nuclear fuel is also an affordable option. The Nuclear Power Corporation sells a kilowatt of power for 1 rupee (two American cents).
"We're trying to understand what India is interested in. Once the nuclear sector opens up, we want to make state-owned companies our customers, since only they can build nuclear plants," said Richards, speaking on the sidelines of the U.S.-India conference.
William E Cummings, vice president of regulatory affairs and standardization at nuclear power plants at Westinghouse, says Indian firms are bound to be the key players, but his company wants to rapidly establish itself as a supplier to the domestic majors. Westinghouse is one of the world's largest providers of nuclear technology.
"The Indian market is huge, so if (the regulatory environment) changes just from zero to possible, there's enough business to make us interested," Cummings said.
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American firms are also exploring ways they can partner with India to supply nuclear power globally. India's natural resources--it is home to nearly one-third of the world's thorium reserves--and an abundant skilled workforce make it an attractive investment.
"Indian and US companies can join hands to meet nuclear energy needs in underdeveloped countries," says Craig S Hansen, vice president of Washington operations at BWX Technologies. He says between 15 and 30 new nuclear plants will be needed each year in the global nuclear energy industry. The new ventures will generate around 600,000 jobs annually.
Already, uranium mining major WM Mining has agreed to sell 500 metric tons of uranium a year to India's Nuclear Fuel Complex, but the contract will be executed only after the nuclear arrangement with the US is concluded.
This week, Congress passed legislation that will allow the US to share civilian nuclear technology with India. US companies reportedly played a key role in lobbying for the bill in the House and the Senate, both of which passed it by overwhelming margins.
President George W Bush's signing of the nuclear bill marks the end of a freeze in nuclear ties that began in 1974. That year, India tested an atomic bomb without signing the Nuclear Non-Proliferation Treaty. Under the new nuclear pact with the US, India will give international inspectors access to some of its nuclear plants.
The passage of the bill is also likely to see a strengthening in defense ties with India, which wants to buy fighter jets and submarines to upgrade its armed forces. Anticipating that demand, US companies like Lockheed Martin Corp and Northrop Grumman were among the defense firms that were part of the American trade team in India last month.
Members of the delegation led by Franklin L Lavin, undersecretary of commerce for international trade, also held meetings with the state-run Nuclear Power Corporation and the Atomic Energy Commission.
"It's a very rudimentary discussion. We're reviewing technology and other requirements," Lavin said before the talks. "We're telling them, 'Here's what we think we do well.'"
India's nuclear accord with the US still has to clear key international hurdles. The Nuclear Suppliers Group, which seeks to limit the spread of atomic weapons, must approve the agreement. And New Delhi must work with the UN's nuclear watchdog, the International Atomic Energy Agency, to decide a timetable for international inspections.