India-Canada uranium supply agreement

India and Canada have signed a landmark uranium supply agreement worth $2.6 billion, strengthening long-term cooperation in civil nuclear energy and ensuring fuel security for India’s expanding nuclear power programme.

Under the agreement, Canadian mining giant Cameco will supply 22 million pounds (around 10,000 tonnes) of uranium to India between 2027 and 2035.

Boost to India’s Civil Nuclear Programme

The deal will provide a stable and long-term supply of uranium — the primary fuel used in nuclear reactors — to support India’s civil nuclear energy expansion. The government aims to increase installed nuclear power capacity from the current 9 GW to 100 GW by 2047.

India currently consumes about 1,500–2,000 tonnes of uranium annually. In 2025, the requirement stood at 1,884 tonnes, according to the World Nuclear Association.

Why India Depends on Imports

Despite possessing uranium reserves, India remains heavily dependent on imports, with more than 70% of its requirements sourced from abroad.

The primary reason is the low-grade quality of domestic uranium ore, which ranges between 0.02% and 0.45%, compared to the global average of 1–2%. In contrast, some Canadian mines have ore grades as high as 15%, according to information provided by the Uranium Corporation of India Limited (UCIL) to a parliamentary panel.

As a result, domestic uranium extraction is significantly more expensive than imported fuel.

Strategic Importance of Domestic Production

Despite higher costs, domestic uranium production remains strategically important. It:

• Supports India’s strategic and weapons programme
• Acts as a buffer against global supply disruptions
• Enhances long-term energy security

UCIL estimates that annual uranium requirements could rise to 5,400 tonnes in the coming years, though domestic production may meet only about 30% of this demand even under optimistic scenarios.

Domestic Reserves and Mining

India’s uranium production is concentrated mainly in Jharkhand and Andhra Pradesh, where seven mines are operational. Deposits are also found in Meghalaya, Rajasthan, Telangana, and other states.

Current estimates indicate around 4.3 lakh tonnes of uranium ore in Indian deposits, of which over 80,000 tonnes lie in mines allocated to UCIL. Around 40% of these reserves have already been extracted.

Diversifying Supply Sources

With the Cameco agreement, India now sources uranium from at least four countries — Uzbekistan, Kazakhstan, Canada, and Russia. Russia has also committed to lifetime fuel supply for reactors being set up at the Kudankulam Nuclear Power Plant in Tamil Nadu.

Additional supply agreements with countries such as Australia and the United States may materialise in the coming years, further diversifying India’s uranium import basket.

Source: IE