Ruth David, 1 December 2006

Forbes.com 

MUMBAI -

The end of the three-decade ban on sale of nuclear material to India by the U.S. is not yet in sight, but the prospect of meeting India’s large energy demands with nuclear power has key American companies already lining up.

The largest trade mission from the U.S. to any country has been in Mumbai since Tuesday, and 30 of its 250 members represent 14 American firms in the nuclear sector. Nuclear reactor manufacturers Westinghouse, General Electric (nyse: GE - news - people ), BWX Technologies and fuel processing specialist Thorium Power are among the companies meeting nuclear policy officials and visiting a nuclear site in India.

Ron Summers of the U.S.-India Business Council says at least $100 billion worth of investment will be needed to develop nuclear energy here over the next 20 years.

Among the estimated 400 nuclear reactors across the world, the U.S. has 104, and India has just 16, though India's population is more than triple the size of the U.S. India's ability to scale up its current production of 3,000 megawatts is restricted by its lack of access to the international nuclear fuel market. New Delhi’s refusal to sign the Nuclear Non-Proliferation Treaty resulted in the 45-nation Nuclear Suppliers Group barring its members from exporting nuclear fuel to the energy-hungry nation.

Timothy J. Richards, the director of GE's International Energy Policy, says if the nuclear deal with the U.S. comes through and global restrictions are eased, his firm hopes to apply for licenses to develop nuclear technology. Power generation will be the key investment area.

Nuclear companies' reps say India can no longer afford to rely on non-renewable, often polluting resources like wood, oil and coal to meet its growing energy needs. Nuclear fuel is also an affordable option. The Nuclear Power Corporation sells a kilowatt of power for 1 rupee (two American cents).

"We're trying to understand what India is interested in. Once the nuclear sector opens up, we want to make state-owned companies our customers, since only they can build nuclear plants," said Richards, speaking on the sidelines of the U.S.-India conference.

William E. Cummings, vice president, regulatory affairs and standardization at nuclear power plants, at Westinghouse, says Indian firms are bound to be the key players, but his company wants to rapidly establish itself as a supplier to the domestic majors. Westinghouse is one of the world's largest providers of nuclear technology.

"The Indian market is huge, so if [the regulatory environment] changes just from zero to possible, there's enough business to make us interested," Cummings said.

American firms are also exploring ways they can partner with India to supply nuclear power globally. India's natural resources--it is home to nearly one-third of the world's thorium reserves--and an abundant skilled workforce make it an attractive investment.

"Indian and U.S. companies can join hands to meet nuclear energy needs in underdeveloped countries," says Craig S. Hansen, vice president, Washington, D.C., operations, at BWX Technologies. He says between 15 and 30 new nuclear plants will be needed each year in the global nuclear energy industry. The new ventures will generate around 600,000 jobs annually.

Already, uranium mining major WM Mining has agreed to sell 500 metric tons of uranium a year to India's Nuclear Fuel Complex, but the contract will be executed only after the nuclear arrangement with the U.S. is concluded.

There are several hurdles to be cleared before the American nuclear establishment can enter India. New Delhi is unlikely to accept the changes proposed in the Senate version of the nuclear bill, which seeks to end a three-decade ban on nuclear trade between the U.S. and India. One new section wants to ensure India is "fully and actively" helping U.S.-led efforts against Iran's nuclear program.

Last week, the influential head of India's ruling Congress coalition, Sonia Gandhi, said India would not accept any changes outside the policy framework signed in July 2005 by Prime Minister Manmohan Singh and President George W. Bush.

But when something happens, the Americans want to be ready to take the leap. Members of the U.S. delegation led by Franklin L. Lavin, Undersecretary of Commerce for International Trade, also held meetings with the state-run Nuclear Power Corporation and the Atomic Energy Commission.

"It's a very rudimentary discussion. We're reviewing technology and other requirements," Lavin said before the talks. "We're telling them, 'Here's what we think we do well.' "