Allowing FDI in nuclear power development an imprudent step- It will adversely impact the national security


Shri Rajiv Gauba

Cabinet Secretary

I had earlier addressed you vide my letter dated 7-10-2022 ( asking the government to revoke amendments to Mines & Minerals (Development & Regulation) Act, 1957 (MMDRA), with reference to the entry of private companies in beach sand mining. The reason for it is that beach sands in India present a fairly large source of strategic atomic minerals, especially Monazite, which is the raw material for extracting Thorium, the fuel for the third stage of the country’s nuclear development programme.

It may be recalled that it was at the instance of Dr Homi J Bhabha that Prime Minister Nehru imposed a total ban on the entry of private licensees in beach sand mining, in view of the strategic importance of atomic minerals that beach sands contained. The UPA government, caving in to external pressures, altered that decision and allowed private mining of beach sands, which indirectly led to the large-scale smuggling of Monazite to external destinations, to the detriment of India’s national interest.

In response to a Writ Petition filed by me before the apex court against private beach sand mining activity in Srikakulam district (AP), the Ministry of Mines revoked private licenses in beach sand mining in 2019.

Once again, yielding to undue pressure exerted by domestic and overseas private companies having an eye on strategic atomic minerals, the present government made a U-turn and amended  MMDRA to reopen beach sand mining to private licensees. Despite my appeal to the government to revoke the amendment, the present government, for reasons best known to it, has chosen not to change its mind, which effectively implies opening the floodgates to the export of strategic atomic minerals and even allowing Monazite to leave the shores of the country against the national interest.

Against this background, I have just come across yet another disturbing news report ( that the present government is considering allowing Foreign Direct Investment (FDI) in nuclear power projects. This will amount to the government diluting the three-stage nuclear power development strategy originally conceived by Dr Homi J Bhabha and adopted by the government headed by Prime Minister Nehru.

The Nehru-Bhabha three-stage nuclear development strategy, described by Dr H.N. Sethna (/ was as follows:

India had consciously avoided softer options and chosen the slower and harder path of a programme aimed at self-reliance which, in the long run, has paid substantial dividends. Today India is among the seven or eight countries in the world, and the only developingcountry, to have the complete fuel cycle, right from uranium exploration, mining, extraction and conversion, through fuel fabrication, heavy water production and reactors, to reprocessing and waste management. India has also reached a stage where its indigenously developed know-how can support all the required activities encompassing feasibility studies, site selection, detailed project design, construction, commissioning and operation of any plant in the entire fuel cycle chain. It has taken almost three decades of effort to reach this stage of development. The innumerable hurdles to be overcome along the way have given our scientists and engineers confidence that other difficulties, which may have to be faced in the future, can be surmounted……..India is one of the few countries at present continuing with the development of natural uranium- fuelled reactors. The major reason has been our preference for a reactor system that can be operated using indigenous resources. This system also has the advantage of an efficient burnup, producing significant quantities of plutonium for use in fast reactors. In formulating the strategy for nuclear power development in India, we  had to take into account that, while our uranium reserves are rather modest (53 000 tonnes of which 30,000 are reasonably assured) we have one of the largest reserves of thorium in the world………. We therefore conceived a three-stage nuclear fuel cycle strategy, with the installation of natural uranium reactors in the first phase, followed by fast breeder reactors in the second phase, using plutonium from the first generation reactors with either uranium-238 or thorium in the blanket, followed eventually by reactors based on the self-sustaining thorium uranium- 233 cycle

The subsequent governments, not as committed to the idea of self-reliance in nuclear power development as the previous governments, deviated from the three-stage strategy by first signing an agreement with the Soviet Union in 1988 to set up a Soviet-manufactured nuclear power plant at Kudankulam in Tamil Nadu and later signing the Indo-US nuclear deal in 2005, which opened the floodgates to setting up nuclear power plants based on imported reactors and imported fuel. This has caused a serious setback to the country’s indigenisation effort, though the CPSE, Nuclear Power Corporation India Ltd (NPCIL) continues to promote indigenisation at least in the case of some nuclear power plants.

If the government allows FDI in nuclear power development, it will amount to a further deviation from the originally accepted three-stage nuclear development strategy. It will open NPCIL’s plants to external scrutiny, which could have strategic implications for both the civilian and the non-civilian nuclear development activities of the country.

In a way, the opening up of India’s nuclear power development programme to imported reactors and imported fuel coupled with the opening of beach sand mining to private players seem to be a part of an externally induced overturning of the Nehru-Bhabha strategy of maintaining India’s independence in the field of nuclear energy. There is no doubt that since 1988, when India signed an agreement to import Soviet-made nuclear reactors, there has been a steady transformation from the idea of self-reliance in the field of atomic energy to one of bartering India’s interests to foreign agencies.

The government may keep in view that FDI in coal-based power plants has not been satisfactory and it has merely enhanced the cost of electricity generation without any qualitative improvement in performance. The infamous Enron power project in Maharashtra, which ended in a near financial disaster for the State,  illustrates this.  If that is any indication, FDI in nuclear power development will only increase the cost of electricity without any commensurate benefits but will have long-term adverse strategic implications

Post-Fukushima accident, it has become abundantly clear that nuclear power technology is highly accident-prone and if a Fukushima-like accident were to take place, the consequential costs of decommissioning an accident-stricken plant will be beyond the means of our resources. Though the Department of Atomic Energy (DAE), considering the need to strengthen the regulation of atomic energy facilities, introduced a Nuclear Safety Regulatory Authority (NSRA) Bill in the Parliament around 2012 and a Parliamentary Committee examined it and suggested important changes, till date the DAE has not acted on the same. The existing regulator, the Atomic Energy Regulatory Board (AERB) is subordinate to the DAE whose facilities it is expected to regulate!

While several foreign companies may display interest in investing in nuclear power projects in India, they are not prepared to assume full responsibility for the liabilities arising from a Fukushima-like accident and India’s civil liability law is far too weak to force them to take on such a liability. It also shows the inherent lack of safety of nuclear power technology about which the foreign companies are fully aware but not willing to accept the liability for it.

While Niti Ayog seems to have recommended opening nuclear power development to FDI on the ostensible ground that it will reduce dependence on coal-based power generation, apparently, it has evidently no clear appreciation of the safety aspects of nuclear power projects. From the point of view of the communities living in the vicinity of nuclear power projects, there are serious questions about the desirability of India depending excessively on nuclear power.

Against the above background, may I renew my earlier demand that the government should revoke amendments to MMRDA in reference to private mining of beach sands and further point out that opening nuclear power development to foreign agencies will run counter to India’s interests, both in terms of self-reliance and strategic interests?


Yours sincerely,

E A S Sarma
Former Secretary to the Government of India


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