UK to let firms into Indian civil nuclear market

Britain will start granting licences to its civil nuclear firms to export to India, British government sources said on Wednesday, opening up business prospects potentially worth billions of pounds.

Business secretary Vince Cable, on a visit to India with a large British delegation, told reporters that cooperation in the civil nuclear industry was one area where he expected the two nations to make good progress.

Government sources said this was a reference to a change in policy on export licences for firms like Rolls-Royce and Serco. The move is aimed at boosting business and sending a positive signal to India on trade links.

The new policy will also allow existing joint British-Indian research into areas such as nuclear physics to be scaled up.

Previously, British policy was not to let firms get involved in India's civil nuclear market because it is a nuclear-armed state that is not a signatory to the Nuclear Non-Proliferation Treaty and that does not separate its military from its civilian nuclear industries.

"There are British commpanies like Rolls Royce, Serco and others which potentially could do a large amount of business in India," Cable said.

"There are obvious security sensitivities. We are conscious of those, as are the Indians. But within those constraints we really want to push ahead with civil nuclear cooperation. That would be quite a big sector within which we could really make progress," he said.

Sources said the change in policy was a reflection of a new approach towards India under the Conservative-Liberal Democrat coalition government that took office in Britain in May. It was a way of building trust and giving concrete evidence of British enthusiasm for bolstering trade.

The sources said that each export licence would be granted on a merit, case-by-case basis and that any security concerns would be taken into consideration. But the change in policy meant that firms could expect their applications for export licences to be granted.

The British move follows a landmark 2008 civilian nuclear deal between India and the United States. That agreement ended the nuclear isolation New Delhi had endured since a 1974 test that launched it on the way to becoming an atomic weapons power.

The deal gave India access to US technology and fuel and set the stage for foreign companies to enter a civilian nuclear energy market worth about $150 billion.

French and Russian nuclear firms already plan to set up in India, and New Delhi has offered to tender construction of two plants, a business opportunity worth $10 billion, to US-based firms GE-Hitachi and Westinghouse Electric, a subsidiary of Japan's Toshiba Corp.