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Nuke Deal: Diet Dilemma

The nuclear deal with the US won't be enough for India to meet its ambitious atomic power generation plans.
twitter-logoRajeev Dubey | Print Edition: March 1, 2015
The Kudankulam nuclear electricity generation plant in Tamil Nadu
Power of atom: The Kudankulam nuclear electricity generation plant in Tamil Nadu

Widespread elation over the Indo-US nuclear deal clearing the last hurdle must wait. Despite the agreement between US President Barack Obama and Indian Prime Minister Narendra Modi - after both sides backed down from their rigid stance - India may find it near impossible to operationalise the deal without convincing Japan to come onboard.

Here's why. First, it will require all of Prime Minister Narendra Modi's persuasive powers and bonhomie with his Japanese counterpart Shinzo Abe to agree to an Indo-Japan civil nuclear deal. The last time the two prime ministers met, India failed to convince Abe. But then those were early days of the Modi government.

Assuming that Abe agrees, yet it would be a miracle if he can get it ratified by the National Diet, the Japanese Parliament. Remember, the word 'nuclear' draws raw emotions from millions of Japanese people. Till date they are the only people in history to suffer a nuclear attack when the US during World War II dropped two atomic bombs on Hiroshima and Nagasaki on August 6 and 9, 1945. The attacks killed nearly 200,000 Japanese and destroyed up to four generations of those who survived.

Memories of the holocaust are still fresh in Japanese memories 70 years since. Till date, the hawkish Abe is yet to rewrite the pacifist constitution (a re-election promise) that prohibits Japan from creating offensive forces. Let alone, asking members of the Diet to agree to an Indo-Japan civil nuclear deal within years of the Fukushima nuclear disaster in 2011.

So what are the consequences of a 'No' from Japan? They are heavily loaded against India's nuclear power ambitions. One, it certainly means that despite the government's best foot forward, India will fail to meet the target to generate 63,000 MW of power through nuclear energy by 2031, a 14-fold rise from the current capacity. India had planned to enhance capacity by building 40 new reactors to complement the 21 operational reactors.

Two, unless Japan is onboard, India cannot buy reactors from some of the world's biggest nuclear equipment suppliers: Toshiba, Hitachi and Mitsubishi. Toshiba, in particular, since it has a near one-third market share in the global nuclear reactor population. These Japanese firms are the flag bearers of most advancements in nuclear technology, including light water reactors, fast breeder reactors and the advanced boiled water reactors. Indian nuclear energy reactors will be deprived of those.

Three, there is almost no possibility of US firms going alone on these projects because companies such as Westinghouse (which is rumoured to be considering bidding for reactor supply) are owned by Japan's Toshiba. Whether the US subsidiary of a Japanese parent can supply to India while Japan cannot, remains to be seen. US-based GE's nuclear power business is integrated with Japan's Hitachi. GE also makes steam turbines in collaboration with Toshiba.

Four, even American and French companies will be unable to supply several components of the nuclear technology because they themselves source several critical technologies from these Japanese firms. Few suppliers have the capability to build pressurised (heavy or light) water reactors without some critical components from Japanese firms, particularly very large special steel forgings used in the reactor pressure vessel that have a lifecycle of more than 40 years. Even though a few American, French, Russian and Chinese firms can make such vessels, the most experienced players are the Japanese.

Left to themselves, Japanese firms would be more than willing to supply nuclear reactors to India because India and China are among the handful of global markets where nuclear reactor demand is still on the rise. Japanese firms have been battling stagnation since Japan decided to phase out nuclear power.

India and Japan began talking about a civil nuclear deal in June 2010 but the discussions were interrupted by the Fukushima disaster caused by a tsunami on March 11, 2011. The dialogue was restarted on September 3, 2013, but the two sides failed to reach an agreement since Japan insisted on a clause that empowered it to terminate all cooperation if India conducted another nuclear test. Incidentally, Japan and Australia were India's most vicious critics when the Atal Bihari Vajpayee government conducted nuclear tests soon after assuming power in 1998.

Meanwhile, India continues to pursue an indigenous nuclear technology plan comprising indigenous fast breeder reactors, pressurised heavy water reactors as well as pressurised light water reactors. But before these take over the nuclear power generation programme, a disruption right now would still be a major setback.

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