FDI in N-power may hit Left hurdle

The passage of the Indo-US civil nuclear co-operation Bill does not mean the end of the UPA government's troubles on the issue, but the beginning of yet another round of negotiations with its Left allies on allowing foreign direct investment (FDI) in the nuclear power industry, say top sources in the government.

The government seems to have found itself in a quandary over companies interested in investing in nuclear power generation plants in India because of certain clauses in the Atomic Energy Act which preclude all but centrally-owned public sector units from getting into the nuclear energy business.

According to the Act, even state PSUs cannot get into the business. "The question is whether the Left will agree to even Indian private players to enter the field," said the source.

According to a top source in the government, amendments to the Act are needed to invite companies to set up plants in India.

A difficult proposition considering a hard stance adopted by CPM General Secretary Prakash Karat against the entire deal. Government sources say that Prime Minister Manmohan Singh will have to get the Left on board before India can take advantage of the opening up of its nuclear industry.