India and Japan are quietly working on an inter-governmental agreement on civilian nuclear energy so that the 123 Agreement between India and the US, currently in the last lap of political negotiation before the US Congress, can be fully implemented on the ground in India.
According to the broad contours of this agreement, New Delhi will promise not to conduct any more nuclear tests in exchange for Japanese permission to its companies, Hitachi, Toshiba and Mitsubishi to go ahead and partner with US and French companies seeking to build civilian nuclear plants in India.
The India-Japan agreement, in fact, very much mirrors the 123 Agreement between India and the US. New Delhi’s promise not to conduct any nuclear tests in the Indo-US nuclear deal is also accompanied by the vow that it will return all material and equipment to the US in case that happens.
In a little noticed development last week in Delhi, the ongoing energy dialogue between Planning Commission deputy Chair Montek Singh Ahluwalia and the powerful Japanese minister for economy, trade and industry, Masayuki Naoshima, resulted in the creation of a sixth working group on civilian nuclear energy, which also had its first meeting the same afternoon.
Over the next few weeks, senior officials from the Ministry of External Affairs will travel to Tokyo to take forward the deliberations of the sixth working group with the director general of the Agency of Natural Resources & Energy, T Ueda.
Both sides are now hoping that the inter-governmental agreement between India and Japan on civilian nuclear energy issues will be signed when the Japanese foreign minister visits India later this year.
But both sides are equally interested in keeping negotiations under wraps because of the extremely shaky nature of the current Democratic Party-led government under prime minister Yukis Hatoyama, whose Socialist party coalition partners have a strong anti-nuclear focus and could even walk out of the government.
Considering Japan is the only country in the world to have experienced the horrors of nuclear war first hand, Japanese public opinion was outraged when the erstwhile Taro Aso government in 2008 allowed the Nuclear Suppliers Group to make an exception for India and allow the Indo-US nuclear deal to go through.
Now, New Delhi is taking this energy relationship to the next level and hoping to formalise it through a bilateral pact.
The incredible importance of Japan’s acceptance of the Indo-US nuclear deal is little understood by the lay Indian public. The fact is that the two US companies pushing to build civilian nuclear plants in India, general Electric and Westinghouse Electric Co (WEC), are either partly or wholly owned by Japanese companies. GE and Hitachi came together in a 60:40 percent international joint venture in 2006, while Toshiba Corp. bought Westinghouse outright in 2006 for $4 billion.
In fact, Japan’s Mitsubishi Nuclear Fuel Co was in December 2008 restructured as a comprehensive nuclear fuel fabrication company, with a 30 percent stake by the French firm Areva, so as to allow it to expand domestic operations into overseas markets.
Since these companies are so intimately tied into the Japanese companies, Tokyo has long been telling New Delhi that the Indo-US deal cannot be fully implemented on the ground unless Japan allows its own companies to further empower its US and French partner companies to sell civilian nuclear technology to a country (India) which has not signed the Nuclear Non-Proliferation Treaty.
Since without Tokyo’s permission the 123 Agreement — soon to face the US Congress for final ratification — cannot be implemented on the ground in India, the need for an intergovernmental agreement had become pressing.
Meanwhile, the government introduced the nuclear liability Bill on the last day of the Budget session of Parliament on Friday. The Bill will be scrutinised by the standing committee headed by Samajwadi Party leader Mulayam Singh in the interim months before the monsoon session opens in July.
The US has told India it cannot put the leftover “procedures and arrangements” related to the 123 Agreement before the US Congress unless the nuclear liability Bill is passed by the Indian parliament.
India has already committed to Areva to build a nuclear power plant at Jaitapur in Maharashtra, the US has got two sites in Gujarat and Andhra Pradesh and the Russians, besides expanding the site at Kudankulam in Tamil Nadu will also set up another plant in Haripur, West Bengal. Each country has been allotted the manufacture of approximately 10,000 Mw of nuclear energy so that India can meet its target of 40,000 Mw by 2032.