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Japan-India nuclear deal sounds good, but not likely in practice

Much-feted Indo-Japan nuclear deal isn’t all that it’s made out to be and will mean little when implemented, First Post by Jaideep Prabhu  Dec 13, 2015 News of an agreement on civil nuclear cooperation between India and Japan has been met with much fanfare in the Indian media. The announcement came on the second morning of Japanese prime minister Shinzo Abe’s three-day trip to India to attend the ninth annual India-Japan Summit. Despite the celebratory tone in India, the fine print and context of what was agreed upon between the two nations is less than satisfactory and will mean little in practice.

The nuclear deal has been a sensitive subject between Delhi and Tokyo for the past five years. ………

Japan holds an important position in international nuclear commerce. Over the years, the island nation has developed expertise in manufacturing several critical reactor components of high quality and become a key node in the supply chains of at least three of the major nuclear vendors, namely the French firm Areva and the American firms General Electric and Westinghouse. Among the major players, only Russia’s Rosatom and China’s two major state-run nuclear vendors – China General Nuclear Power Group (CGN) and China National Nuclear Corporation (CNNC) – are independent of Japanese components. As per Japan’s strict export controls stipulating end-user certification and other conditions, US and French nuclear firms would first need the permission of their Japanese suppliers before doing business with India. Tokyo’s consonance on nuclear cooperation with India thus achieved a greater import, not to mention the symbolic value India put on such an agreement as an indicator of its nuclear normalisation.

The declaration at the India-Japan Summit falls considerably short of a nuclear deal. The two sides merely signed a memorandum of understanding that has punted the legal and technical differences further down the road. In essence, this means that Japan has only agreed to the principle that it can conclude a civil nuclear cooperation agreement with India, that it will make an exception to its rule of not conducting nuclear commerce with a state that is not a signatory of the NPT. This is progress, no doubt, but what price Japan will extract for its concession in terms of technical requirements or how long the nuclear deal will take to operationalise is anyone’s guess……

Even if India and Japan had succeeded in signing a comprehensive civil nuclear cooperation agreement, the chances of it having much impact on India’s nuclear energy sector are slim. As part of its agreement with the United States, India agreed to bring into force a nuclear liability law like all other states with nuclear facilities. However, Delhi’s interpretation of liability, informed as it was by the Bhopal Gas Tragedy of 1984, was not in congruence with the international standard that limited damages and made the operator solely responsible for economic compensation.
Consequently, no vendor is willing to enter the Indian nuclear market. Chairman Jeff Immelt stated categorically that he was not willing to expose his company to the risks Indian liability law required of nuclear suppliers, and Areva has slowed down its work at Jaitapur pending further clarifications regarding liability despite signing a pre-engineering agreement for the site with Larsen & Toubro in April 2015. Similarly, Westinghouse has been remarkably silent on its interest in India since January 2015 when US president Barack Obama and Indian prime minister Narendra Modiachieved an expensive and convoluted workaround on supplier liability by establishing an insurance pool for nuclear vendors……..
Whatever the potential benefits of a civil nuclear cooperation agreement with Japan may be, India has not achieved them today. http://www.firstpost.com/world/much-feted-indo-japan-nuclear-deal-isnt-all-that-its-made-out-to-be-and-will-mean-little-when-implemented-2543774.html

December 14, 2015 - Posted by | Japan, marketing of nuclear

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