Indo-Japan civil nuclear deal: Despite the anti-nuclear test stance, it's a win-win for all

Despite a few initial concerns, both India and Japan have much to gain from the new Indo-Japan civil nuclear deal. While it will help India meet its energy requirements, Japanese companies will find a new market and way to assert their position in Asia

Rajiv Nayan November 12, 2016 19:44:43 IST
Indo-Japan civil nuclear deal: Despite the anti-nuclear test stance, it's a win-win for all
IndoJapan civil nuclear deal Despite the antinuclear test stance its a winwin for all

PM Narendra Modi and Japan's PM Shinzo Abe during a joint press conference at Abe's official residence in Tokyo, Japan. Reuters

India and Japan, at last, signed an agreement for cooperation in the peaceful uses of nuclear energy. Both countries took several rounds of negotiations, which helped resolve several sticky issues. Though only limited information has been released by the two governments, a media briefing of the Indian foreign secretary made several issues clear.

The joint document signed by the two countries lays down a roadmap for bilateral cooperation in the field of nuclear energy. "This would provide for the development of nuclear power projects in India and thus strengthening of energy security of the country. The present agreement would open up the door for collaboration between Indian and Japanese industries in our Civil Nuclear programme,” it says.

But cutting the deal wasn't easy. There were several questions and concerns raised in the past that delayed the agreement. Some of those concerns remain afloat in both the countries, though they aren't necessarily of the same nature.

Some in Japan argued that a nuclear agreement with India, a non-signatory to the Nuclear Non-proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT), will undermine the nuclear regime. The reality is that India received a clean exemption in the guidelines of the Nuclear Suppliers Group (NSG) in 2008 and the CTBT is in a coma. Instead, India has been extending a moratorium on its nuclear test, and this is far more relevant than merely signing a non-existent treaty. Besides, India has an impeccable record, and all of its nuclear cooperation agreements are accompanied by the relevant safeguard practices. So, there is no question of diversion of any item supplied for peaceful purposes to a military programme.

The point that a victim of the nuclear attack would find it difficult to sign a peaceful nuclear programme was intriguing. More so, the fact that idea came from a country, which is enjoying nuclear protective umbrella (and till the Fukushima Accident had used nuclear energy to generate about 30% of the country's total electricity production), was definitely bizarre. Even the serious section of the Japanese policy making community found it non-serious and basically a deal-delaying ploy.

The argument that for a country that has stopped using nuclear energy and operating nuclear reactors, it is unethical to export them did have some merit. But the moment Japan started operating some of its reactors and decided to eventually operate its non-operational reactors and add a few more, even this ethical resistance evaporated. However, a section that opposes nuclear energy all over the world kept clinging to this argument.

Other than the ethical and non-proliferation concerns, there were some practical commercial concerns of the Japanese nuclear industry, a major driver for the India-Japan nuclear deal. As the Indian nuclear establishment was basically interested in Japanese technology, not in its reactors, Japanese industry did not find it commercially lucrative to enter into the Indian nuclear market.

It was only when India agreed to buy reactors that the Japanese nuclear industry started seriously working on the deal. Now, it will have to partner with one of the Indian operators like the Nuclear Power Corporation India Limited. A Japanese company, however, will still have less than 50 percent ownership in a nuclear venture. For a short period, Japanese industry also wanted a solution to the nuclear liability issue.

Moreover, Japanese officials wanted proper assurance regarding export control enforcement and outreach for the Indian companies receiving the Japanese goods. India has completely harmonised its export control system along the NSG guidelines and annexes. Besides, India increased its outreach activities for its companies. Some Japanese companies have also started giving export control training to employees of the Indian companies, which are receiving its goods.

In India, too, there were some concerns, and to a certain extent, they exist even now as the two governments have not provided details of the agreement. The India-US 123 agreement is a somewhat detailed document available in the public domain. However, the press briefing of the foreign secretary, Jai Shankar sought to clear the air after the signature ceremony. He informed that all the stages of India-US agreements for civil nuclear energy were compressed in one document for the India-Japan deal.

Implicitly, the foreign secretary conveyed that the template of the 123 agreement had been taken for drafting the India-Japan agreement. Administrative arrangements for India-Japan specific would be worked out later, although the technical annexure attached to the agreement may already have some of the arrangements. But the basic parameters of the agreement would not be different.

The termination clause, one of the concerns in India, exists in the agreement. As the Indian foreign secretary rightly pointed out, it exists in most of the agreements. So, is the concern in India, that in the event of a nuclear test, the deal will be nullified, true?

Theoretically, it is possible. A termination clause exists in the India-US 123 agreement as well, though a nuclear test is not explicitly mentioned. The agreement with the US has provisions for consultation between the two countries and remedial action for India in the case of a termination. The agreement with Japan is not radically different from that.

India will continue to have its right to conduct nuclear tests if the strategic environment changes dramatically and adversely affect India’s security. In such a situation, in reality, both the US and Japan may appreciate the Indian situation. India’s security interests are fast converging with both the countries. Quite importantly, by all the assessments, the next round of nuclear tests in the world will start either with the US or China. So, India may not have much difficulty in managing the situation after its own nuclear tests, which may follow after the tests of these countries.

Regarding reprocessing, too, seemingly, the India-Japan agreement has adopted the 123 model. Reprocessing will be done at a dedicated safeguarded site. In fact, India may help Japan in reprocessing its fuel which it sends outside. Moreover, India and Japan may in the future undertake joint research and development projects.

But still, one question emerges. Why did India focus so much on entering into an agreement with Japan when so many countries were willing to do business with it and have already signed agreements for the purpose? Actually, Japan is preferred because of its reliability and trustworthiness. It is not known for imposing additionalities. Second, its technology is considered more advanced than many of the countries active in global nuclear reactor commerce.

Third, important Japanese nuclear companies have bought stakes in the companies of some of the supplier countries. An agreement with Japan will solve the issue of taking a consent from Japan for doing business with the companies of those countries. Fourth, Japan is emerging as an important strategic partner of India in managing Asian affairs. Together the two countries may push the idea of Asiatom.

Fifth, Japan, a country with advanced technology but declining population, may provide both a base and an opportunity for the Indian scientific force. It could be a win-win situation for both the countries. It is indicated that both the countries may do some innovative work on safety and security, though other countries have the similar provision in their agreements with India.

In the future, the two countries have to consolidate what they have agreed, covered and gained so far. The deal will turn out mutually beneficially for both. India will get its much-needed electricity and technological partnership and Japan will get a market for its companies which are facing a tough situation for several years even before the Fukushima incidents. Really, the sky is the limit for India and Japan in the nuclear and other strategic sectors.

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