In News:

Context:

India and the United States have reaffirmed their commitment to fully realise the 123 Civil Nuclear Agreement, marking a major push to revive progress two decades after the pact was signed in 2007.

Key Gains for India

• Technology Transfer & Localisation:The partnership envisions joint construction of US-designed nuclear reactors in India, incorporating large-scale localisation and technology transfer, reversing the US's usual "manufacture-at-home" stance.
• Upgrading India’s Nuclear Capacity:India aims to shift from PHWRs (Pressurised Heavy Water Reactors) to globally dominant PWRs (Pressurised Water Reactors). This will allow India to scale capacity addition and modernise its nuclear fleet.
• Entry into Small Modular Reactors (SMRs):
  • SMRs (30–300 MWe) are compact, scalable reactors viewed as essential for future clean energy demands.
  • India’s Department of Atomic Energy is exploring collaboration with Holtec International (USA) for joint manufacturing and deployment.
  • Holtec's SMR-300, supported by the US Department of Energy with $116 million, is under design review in the UK and Canada.
• Strategic Counter to China:India–US joint ventures in SMRs could counter China’s rising influence in the Global South through its aggressive SMR diplomacy.

Economic & Industrial Impacts

• Holtec plans a nuclear technology campus in Pune and a specialty manufacturing plant in India.
• Existing facility in Dahej, Gujarat, can double workforce if plans are approved.
• Legal reforms in India are being considered to attract investments from Western and Middle Eastern markets into the nuclear sector.

India: Leading the Next Phase of Global Outsourcing (Deloitte Report)

Key Findings from Deloitte’s ‘The Outsourcing Compass’ (2025)

• Growing Demand:
  • 81% of global organizations plan to increase outsourcing over the next 3–5 years.
  • India continues to lead as a global outsourcing hub, with a projected rise as the world’s 3rd-largest economy by 2027.
• Shift in Outsourcing Models:
  • Transition from back-office services to strategic, high-value functions like product development, AI/GenAI support, and brand management.
  • 98% of firms depend on Indian service providers for AI and GenAI capabilities.
• Modern Contracting Approaches:
  • 36% prefer outcome-based contracts over traditional FTE-based models.
  • AI-specific clauses are being added to outsourcing contracts to enhance tracking and cost control.
• Strategic Collaborations & Cost Efficiency:
  • Strategic-niche partnerships yield 10–25% annual cost savings; some report 15–35% savings.
  • 70% of organizations work with non-traditional providers to access innovative technologies.
• Evolving Operating Models:
  • 55% use Global Business Services (GBS) centers for oversight; execution by third-party providers.
  • 35% adopt Build-Operate-Transfer (BOT) models to scale up while retaining control.
• Robust Governance Structures:
  • 45% of mature outsourcing firms operate Vendor Management Offices (VMOs) to manage risks and enhance effectiveness.

Why India Remains Preferred:

• A skilled digital workforce, thriving startup ecosystem, policy stability, and advancements in cybersecurity and vendor governance bolster India’s position.