Narendra Modi was supposed to go to Tokyo and bring home a deal to buy nuclear energy equipment from Japanese firms. But after failing to reach an agreement, Modi and his Japanese counterpart Shinzo Abe did the next best thing – they reaffirmed the importance of such a deal, welcomed what they called “significant progress in negotiations” and directed their teams to hurry up and get the job done.
India and Japan began talks for a so-called civil nuclear deal in 2010, which were then put on hold after the earthquake-tsunami-nuclear disaster in Japan in 2011. Manmohan Singh and Abe agreed to accelerate negotiations again last year. After four years, the deal still hasn’t been sealed, much of it because of Japan’s wariness of India's nuclear weapons.
What India wants
India is energy starved. It gets 68% of our electricity from coal, supplies of which are restricted and uncertain. To boost our energy capacity, the Indian government has set a target of getting 25% of our electricity from nuclear sources by 2020. To reach this goal, India is looking for nuclear equipment wherever it can get it.
India needs a nuclear agreement with Japan to be able to install American and French nuclear reactors. Japanese companies are almost the only ones in the world that make critical reactor components used by reactor manufacturers like General Electric of the United States and Areva of France. Unless India and Japan come to an understanding, these manufacturers will not be able to install Japanese equipment in reactors in India.
India had long been an outcast in the international community for conducting nuclear tests, developing nuclear weapons and refusing to sign the Non Proliferation Treaty. To facilitate the Indo-US deal that Manmohan Singh pushed through in 2005, the Nuclear Suppliers Group exempt India from its rule forbidding trade with countries that are not party to the NPT. Even Japan, which had repeatedly asked India to sign the NPT, held back its reservations on such a waiver. Since then New Delhi has agreed on cooperating on civilian nuclear energy with Russia, France, the United Kingdom, South Korea, Canada, Argentina, Kazakhstan, Mongolia, and Namibia. A deal with Japan, a pacifist country that has been committed to non-proliferation, could be sold as a great diplomatic victory for India.
What Japan wants
Japan desperately needs to revive its moribund economy and this nuclear deal with India could be the tonic. India plans to start building another 19 nuclear plants by 2017. The aim is to ramp capacity up from around 5,000 megawatts of nuclear energy at present to close to 15,000 megawatts by 2020. A civilian nuclear deal will open doors to of 9 trillion yen ($86 billion) worth of business in India.
Japanese nuclear equipment makers Toshiba and Hitachi were almost shut for business by the Fukushima disaster of 2011 and the backlash against nuclear energy in its wake. The India deal could restore their fortunes.
The sticky points
Japan has long been a champion of non-proliferation and nuclear disarmament. As the only nation in the world that has been bombed with nuclear weapons, Japan feel strongly about countries that have nuclear arms. Japan is wary about the signal a deal with India will send out.
As one clause of the agreement, Japan is insisting on a promise from India that it won’t conduct further nuclear tests. Japan also wants India to submit to inspections of its nuclear facilities to ensure that spent fuel from the civilian energy programme is not used in making bombs.
Even as Japan insists on safeguards, it is India’s nuclear liability law that has made India’s newly acquired nuclear partners unhappy. The law was born from the bitter experience with Union Carbide in Bhopal and is designed to protect Indian citizens in the event of a nuclear accident. The law holds nuclear suppliers, along with reactor operators, accountable in the event of a nuclear disaster.
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India and Japan began talks for a so-called civil nuclear deal in 2010, which were then put on hold after the earthquake-tsunami-nuclear disaster in Japan in 2011. Manmohan Singh and Abe agreed to accelerate negotiations again last year. After four years, the deal still hasn’t been sealed, much of it because of Japan’s wariness of India's nuclear weapons.
What India wants
India is energy starved. It gets 68% of our electricity from coal, supplies of which are restricted and uncertain. To boost our energy capacity, the Indian government has set a target of getting 25% of our electricity from nuclear sources by 2020. To reach this goal, India is looking for nuclear equipment wherever it can get it.
India needs a nuclear agreement with Japan to be able to install American and French nuclear reactors. Japanese companies are almost the only ones in the world that make critical reactor components used by reactor manufacturers like General Electric of the United States and Areva of France. Unless India and Japan come to an understanding, these manufacturers will not be able to install Japanese equipment in reactors in India.
India had long been an outcast in the international community for conducting nuclear tests, developing nuclear weapons and refusing to sign the Non Proliferation Treaty. To facilitate the Indo-US deal that Manmohan Singh pushed through in 2005, the Nuclear Suppliers Group exempt India from its rule forbidding trade with countries that are not party to the NPT. Even Japan, which had repeatedly asked India to sign the NPT, held back its reservations on such a waiver. Since then New Delhi has agreed on cooperating on civilian nuclear energy with Russia, France, the United Kingdom, South Korea, Canada, Argentina, Kazakhstan, Mongolia, and Namibia. A deal with Japan, a pacifist country that has been committed to non-proliferation, could be sold as a great diplomatic victory for India.
What Japan wants
Japan desperately needs to revive its moribund economy and this nuclear deal with India could be the tonic. India plans to start building another 19 nuclear plants by 2017. The aim is to ramp capacity up from around 5,000 megawatts of nuclear energy at present to close to 15,000 megawatts by 2020. A civilian nuclear deal will open doors to of 9 trillion yen ($86 billion) worth of business in India.
Japanese nuclear equipment makers Toshiba and Hitachi were almost shut for business by the Fukushima disaster of 2011 and the backlash against nuclear energy in its wake. The India deal could restore their fortunes.
The sticky points
Japan has long been a champion of non-proliferation and nuclear disarmament. As the only nation in the world that has been bombed with nuclear weapons, Japan feel strongly about countries that have nuclear arms. Japan is wary about the signal a deal with India will send out.
As one clause of the agreement, Japan is insisting on a promise from India that it won’t conduct further nuclear tests. Japan also wants India to submit to inspections of its nuclear facilities to ensure that spent fuel from the civilian energy programme is not used in making bombs.
Even as Japan insists on safeguards, it is India’s nuclear liability law that has made India’s newly acquired nuclear partners unhappy. The law was born from the bitter experience with Union Carbide in Bhopal and is designed to protect Indian citizens in the event of a nuclear accident. The law holds nuclear suppliers, along with reactor operators, accountable in the event of a nuclear disaster.