India has signed its first contract to build nuclear power plants after the international community lifted an embargo on civilian nuclear trade with the country. The deal marks the end of India's nuclear isolation.
The state-owned Nuclear Power Corporation of India Ltd. signed a preliminary accord with French company Areva in New Delhi, Wednesday, to provide up to six nuclear reactors.
The reactors will be located in Jaitapur, in the western Maharashtra state. The estimated value of the deal has not been disclosed, but the cost of one reactor is expected to be $5 billion to $8 billion.
This is the first agreement to provide nuclear reactors since countries which supply nuclear technology approved a controversial proposal by the United States to drop a 34-year ban on nuclear trade with India.
The ban was imposed because India is not a signatory to the Nuclear Non-Proliferation Treaty.
An energy advisor to the Confederation of Indian Industry, V. Raghuraman, says Wednesday's deal with the French company marks a starting point for India to gain access to state-of-the-art civilian nuclear technology.
"Today, since there has been a technology denial and fuel denial for the last more than three decades, India has developed an in-house program and there have been some capabilities, but surely these are not world class or also of the capacities which are required for future development. Which would mean we really need to access technology. We would like to look at accessing technology from all around, because the kind of capacities which we need are phenomenal," said Raghuraman.
India has 17 nuclear reactors, which contribute about 2.5 percent of the country's electricity.
India is desperately short of power, wants to scale up the share of nuclear power, significantly, to meet the needs of its growing economy.
Energy advisor Raghuraman says India want to add 60,000 megawatts of nuclear energy, in the next 15 years.
"India does not have much of energy option. We are short of hydrocarbons. We are short of coal. We are short of everything. We need an energy mix. We need to make the ground today to prepare for the future," said Raghuraman.
India is expected to spend billions of dollars to build nuclear power plants. In addition to France, India is likely to access the technology from the United States and Russia.