Why India's $2.6 bn uranium pact with Canada matters for clean energy push

India and Canada sign a $2.6 billion uranium deal to secure fuel for India's nuclear plants, boost clean energy plans and fast-track a wider trade pact between the two countries

India and Canada on Monday signed a $2.6 billion uranium supply agreement, placing nuclear energy at the centre of bilateral ties. The deal, signed after talks between Prime Minister Narendra Modi and his Canadian counterpart Mark Carney in New Delhi, is aimed at securing long-term fuel supplies for India’s civilian nuclear programme.

 

The two countries also agreed to fast-track negotiations on a Comprehensive Economic Partnership Agreement (CEPA), with a target to conclude it by the end of 2026. But beyond trade, the uranium pact is significant because it ties directly into India’s long-term nuclear energy goals.

 

India-Canada uranium deal: Details

 

Under the agreement, Canada will supply uranium to fuel India’s nuclear reactors. The focus is on ensuring a stable and predictable supply of fuel for India’s Pressurised Heavy Water Reactors (PHWRs), which run primarily on natural uranium.

 

 

Both sides also agreed to cooperate on small modular reactors (SMRs) and advanced nuclear technologies. In addition, they signed agreements on critical minerals, renewable energy and education partnerships.

 

For India, the uranium supply deal addresses a critical bottleneck -- fuel security.

 

Why India needs to import uranium

 

India has domestic uranium reserves, but they are limited in quality and quantity. Government data shows India has an estimated 76,000 tonnes of uranium that could fuel about 10,000 MW of nuclear power for 30 years, news agency Reuters reported. However, these resources can meet only about 25 per cent of the projected future demand.

 

India primarily imports natural uranium in the form of uranium ore concentrate, or “yellowcake”. This is processed domestically into uranium dioxide and then fabricated into fuel bundles.

 

In FY21, the country imported 2,000.299 metric tonnes of uranium (MTU) from Canada and Kazakhstan. There were no imports in FY22 and FY23. In FY24 and FY25, India imported 350 MTU and 250 MTU, respectively, from Uzbekistan, Moneycontrol reported.

 

A long-term agreement with Canada, therefore, provides greater certainty as India expands its nuclear capacity.   

 

How does this fit into India’s Nuclear Energy Mission?

 

In the Union Budget 2025-26, the government announced a Nuclear Energy Mission with an ambitious goal: 100 GW of nuclear capacity by 2047.

 

Currently, India’s installed nuclear capacity stands at 8.78 GW. It is projected to rise to about 22.38 GW by 2031-32 as new 700 MW and 1,000 MW reactors come online.

 

The mission allocates ₹20,000 crore for the development of Small Modular Reactors (SMRs). At least five indigenously designed SMRs are expected to be operational by 2033.

 

Institutions such as the Bhabha Atomic Research Centre are developing designs including the 200 MWe Bharat Small Modular Reactor (BSMR-200), the 55 MWe SMR-55 and a high-temperature gas-cooled reactor for hydrogen production.

 

To meet the 100 GW target, India will need to add more than 4 GW of nuclear capacity every year for over two decades -- a pace far higher than in the past. Securing uranium supply is therefore essential.

 

What happened to the India-US nuclear deal?

 

India’s push for global nuclear cooperation began with the landmark civil nuclear agreement with the United States in 2008. The deal, known as the 123 Agreement, followed amendments to the US Atomic Energy Act and enabled India to engage in international nuclear commerce despite not being a signatory to the Nuclear Non-Proliferation Treaty.

 

Under the pact, six 1,000-MW AP1000 reactors were to be built in India by Westinghouse Electric Company in partnership with India’s Nuclear Power Corporation of India Ltd (NPCIL), S&P Global reported.

 

However, progress stalled due to high project costs, long construction timelines, and concerns over India’s Civil Liability for Nuclear Damage Act, 2010. The law allows recourse against suppliers in case of faulty equipment, which made foreign companies cautious about investing.

 

As a result, India has added only about 4.1 GW of nuclear capacity since 2010. Although around 5 GW is in advanced stages and more capacity is planned, the pace has been slower than expected after the US deal.

 

In recent years, India and the US have sought to revive cooperation, including discussions around advanced reactors and SMRs. Yet, concrete project execution has remained limited.

 

Why nuclear energy matters for India

 

India is the world’s third-largest emitter of greenhouse gases but also one of the fastest-growing energy markets. While renewable energy capacity has grown rapidly, solar and wind are intermittent sources.

 

Nuclear power provides stable, round-the-clock electricity with low carbon emissions. It is seen as critical for India’s energy security, climate commitments and reducing dependence on coal.

 

The bigger picture

 

The uranium pact signals that India is deepening its nuclear partnerships beyond the US and Russia. By securing fuel supply from Canada and pushing ahead with indigenous SMR development, India is attempting to remove key roadblocks that slowed its nuclear expansion in the past.

 

If India is to achieve its 100 GW nuclear target by 2047, stable uranium imports, faster project execution and international technology collaboration will be crucial.