Indian CEOs expect Obama booster for nuke power sector

Expect Obama visit booster for manufacturing and technology transfer in nuclear power, defence

Indian companies expect a big push to the nuclear energy sector after the announcement of an agreement on commercial cooperation with the US.

The two countries had signed a landmark civilian nuclear deal in 2008 during the visit of then US President George Bush but it was stuck due to a dispute over India’s liability law.

“We are happy an agreement has been announced on the contentious issue. Although details would need to be studied, I feel confident that, given the strong emphasis placed by our government on ‘Make in India’, the interests of all stakeholders, including domestic industries which have been steadfastly supporting India’s own nuclear programme, will be adequately addressed,” said M V Kotwal, president, heavy engineering, and board member at Larsen & Toubro. “It will open up a large potential for L&T to make even more substantial contributions to India’s programme, in partnership with the identified foreign companies.”

Chief executive officers (CEOs) said this deal would be strategically important. “On the face of it, the transaction is good for India, it was crucial. We (India) need technology collaboration in this segment and this deal will help us,” said Seshagiri Rao, joint managing director & group chief financial officer at JSW Steel.

CEOs say ironing out the issues related to the nuclear liability clauses is key to US companies setting up reactors at the two sites offered by the government to them in Gujarat and Andhra Pradesh.

“By personally guiding the painfully meandering negotiations, PM has ensured the country can finally see on-ground large, foreign direct investments from the US nuclear giants. More importantly, he has successfully convinced the US in committing to India’s smooth entry in four key Nuclear Suppliers Groupings which will bring India on par with the Nuclear Elite like the US, Russia, France & China,” said  Ajay Bodke, head (Investment Strategy & Advisory) at financial services firm, Prabhudas Lilladher.

It’s not only the nuclear industry, many companies in other sectors such as defence, pharmaceuticals, software, nuclear energy and infrastructure are also expecting a solid push from the Obama visit.