In today’s Finshots, we’re exploring why Canada and India are about to sign a $3 billion uranium supply deal.

The Story

In an earlier story on India's renewable energy transition, we argued that if a power source is meant to anchor a modern grid, it needs to tick three boxes:

1. Predictability: The ability of a power source to deliver electricity reliably and on schedule, so grid operators can match supply with demand without large uncertainty. 
2. Scalability: The ease with which a power source can be expanded to meet rising demand without running into land or resource constraints.
3. Low-carbon emissions: The extent to which a power source limits greenhouse gas emissions over its full lifecycle, from construction and fuel extraction to operation and decommissioning.

Nuclear power happens to tick all three boxes, which is why it keeps returning to the policy conversation whenever countries start worrying about long-term energy needs. 

Today, that brings us to the proposed uranium agreement with Canada, a deal valued at nearly $3 billion and quite significant in ways that the headlines don’t immediately reveal.

India’s uranium requirement is already well above what domestic mines can reliably supply. Domestic production stands at around 600 tonnes annually, while reactor demand is expected to cross 1880 tonnes. However, meeting that demand is not just a question of sourcing more uranium. We need to source good-quality uranium.

You see, most of India’s uranium reserves are low-grade. That means the ore contains a smaller concentration of usable uranium and requires more processing to extract fuel.

Apart from this, the uranium extracted from mines in Andhra Pradesh or Jharkhand could work well for India’s indigenous pressurised heavy water reactors (PHWRs), which use expensive heavy water (D₂O) and are designed to run on abundant natural uranium (U-238). But our nuclear programme is no longer limited to these reactors alone.

Over the years, we have added light water reactors, including Russian-designed VVERs and other imported designs. These reactors use regular water (H₂O) and run on low-enriched uranium (U-235), a fuel we currently don’t produce at a large scale domestically. While India has enrichment capability for strategic purposes, civilian nuclear expansion relies on imported enriched fuel. As India adds more of these reactors, our dependence on foreign uranium inputs rises, regardless of what domestic production numbers suggest.

This is where Canada enters the picture.

Because Canada sits on some of the world’s largest uranium reserves, but more importantly, it produces some of the highest-grade uranium anywhere. The Cigar Lake mine, operated by Cameco, has the highest-grade uranium deposit in the world. Higher-grade ore means less rock to process, more consistent fuel quality, and greater reliability overall. For a country planning to expand nuclear capacity steadily over decades, that reliability matters as much as volumes.

The deal also reflects the nature of uranium markets themselves. Unlike coal or crude oil, uranium is not something you can easily buy on the spot market during shortages. It is tightly regulated, traceable from mine to reactor, and wrapped in international safeguards. Long-term supply contracts are the norm, not the exception, and they are as much diplomatic agreements as commercial ones. Securing such a contract signals trust and alignment at the state level, especially in a sector tied closely to national security.

It is also worth clarifying what is actually being shipped. 

Uranium imports typically arrive as uranium ore concentrate, called yellowcake. This is not reactor-ready fuel. For India’s heavy water reactors, this material can be fabricated into fuel with relatively limited processing, since those reactors use natural uranium. For light water reactors, additional steps such as conversion and further enrichment are required before the fuel can be used.

Seen through this lens, the Canada deal is not about plugging a short-term supply gap, but securing dependable inputs for a nuclear roadmap that stretches well beyond the current decade.

And that future is no longer just hypothetical. The global data centre boom is already changing how energy is consumed. Google and Amazon are exploring small-scale nuclear reactors to power data centres because they need electricity that is constant, clean, and available 24x7. Solar and wind help, but they cannot guarantee 24x7 production.

So India sits at an interesting intersection here. It has favourable policies for data centres, growing demand for digital infrastructure, and a renewed push for small modular reactors. As compute demand rises alongside electrification, nuclear power is increasingly being viewed not just as grid support, but as dedicated, on-site energy infrastructure.

The government has repeatedly stated its intention to expand nuclear capacity significantly by 2047. This is part of a broader push to decarbonise the grid without sacrificing reliability. And that ambition requires fuel certainty years in advance, and not ad hoc purchases.

There is also a diplomatic subtext that makes the deal more interesting. Just months ago, India and Canada were locked in acrimonious disputes. Trade talks were paused, diplomats were withdrawn, and relations appeared strained. 

Yet both sides are now preparing to sign a long-term agreement covering one of the most sensitive commodities in global trade. That contrast underscores how strategic energy considerations often cut across political turbulence, especially when both sides see mutual benefit.

The timing also aligns with a series of domestic policy shifts in the nuclear sector. In the latest Budget, the government extended customs duty exemptions on goods imported for nuclear power projects until 2035, a move aimed at reducing costs for reactor projects. 

Policy changes over the past year have even opened the door to greater private sector participation in nuclear power. The government has also launched a dedicated programme to fund small modular reactors, which promise lower upfront costs, easier containment, and reduced fallout risks compared to large traditional plants. 

Another important point to note is that nuclear power has always suffered from a reverse survivorship bias, which rarely attracts attention unless something goes wrong, and it competes poorly for public affection against solar and wind. Yet behind the scenes, India has been methodically preparing for a larger nuclear role by investing in reactors, adjusting regulations, encouraging private participation, and securing fuel supply years in advance.

The common thread across these steps is an attempt to make nuclear power more scalable, flexible, and, most importantly, safer than before.

The Canada–India uranium deal fits squarely into that pattern. So yeah, in a sector where mistakes take decades to fix, maybe India is finally planning its energy future before a crisis forces its hand. What do you think?

Until next time…

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