india

Updated: Dec 04, 2014 09:53 IST

The government is working on plans to get Russian and French nuclear component suppliers to enter into sourcing arrangements with Indian firms instead of importing reactor parts, a move aimed at boosting the Make in India initiative and reducing costs.

It is understood that the India-Russia vision document on energy cooperation to be released during President Vladimir Putin's visit later this month will reflect Moscow's willingness to be part of Make in India in the nuclear sector. India feels that getting the Russians to source locally will give a major leg-up to domestic companies.

On the cost front, sources familiar with the developments said that the immediate reason local sourcing was being suggested was the high price of power quoted by French supplier Areva, which is helping set up six 1,650-MW reactors at nuclear power parks at Jaitapur in Maharashtra.

"It looks like the cost of power could be between Rs 9.50 and Rs 11 per unit," said one of the sources. The Department of Atomic Energy's benchmark price per unit in 2020-21, when the reactors are due to go critical, is Rs 6.50.

It is understood that the French have tried to justify the high prices by citing the cost of imported parts like reactor domes, being brought from Japan.

"A reactor has a lot of civil work associated to it. When you look at reducing cost without compromising on quality, Indian companies can come handy," said the source, adding that the move would give a fillip to the Indian manufacturing sector as a whole.

India is keen on attracting investment into the sector and quenching its thirst for electricity. It aims to increase nuclear power generation to 63,000 MW from 4,780 MW at a cost of $85 billion.

HT reported on Sunday that the Modi government is working on measures to reassure component suppliers frightened by the country's laws, which hold them liable for accidents and put them at risk of financial ruin.

Indian firms Larsen & Toubro (L&T), Walchandnagar Industries and Godrej and Boyce have a potentially active role in the nuclear sector. But like foreign players, they have been worried by the nuclear liability law.