Indian corporates are expecting a big push to the Indian nuclear sector after the Indian Prime Minister Narendra Modi said on Sunday that the country is moving towards commercial cooperation on civil nuclear trade with the United States. The two countries had signed a landmark civilian nuclear deal in 2008 during the visit of former US President George Bush to India but it was stuck to due to a dispute over India’s liability law.
“We are happy to know that an agreement has been announced between the Indian & US governments on the contentious issue of Civil Nuclear Liability. Although details would need to be studied, I feel confident that, given the strong emphasis placed by our government on “Make in India”, the interests of all stakeholders, including domestic industries which have been steadfastly supporting India’s own nuclear program, will be adequately addressed,” said M V Kotwal, president, heavy engineering and board member, Larsen & Toubro.
“Once this happens, it will open up a large potential for L&T to make even more substantial contributions to India’s nuclear program in partnership with the identified foreign companies,” said he.
CEOs said this deal would be strategically important for India. “As far as I know, the Indian liability law was the most crucial thing in this deal. I think once more details come in, more can be spoken about it but at the face of it, the transaction is good for India, it was crucial. We (India) need technology collaboration in this segment and so this deal will help us,” said Seshagiri Rao, Joint Managing Director & Group CFO of JSW Steel.
CEOs say ironing out the issues related to the nuclear liability clauses is key to US companies setting up nuclear reactors in the two sites offered by the Indian government to them in Gujarat and Andhra Pradesh.
“By personally guiding the painfully meandering negotiations the country can finally see on-ground investments from the US nuclear giants. More importantly Modi has successfully convinced the US in welcoming India’s smooth entry in the four key Nuclear Suppliers Groupings which would bring India on par with the nuclear elite like the US, Russia, France and China,” said Ajay Bodke, head – Investment Strategy & Advisory, of financial services firm, Prabhudas Lilladher.
It’s not only the nuclear industry, many companies in other sectors such as defence, pharmaceuticals, software, nuclear energy and infrastructure are also expecting a solid push from the Obama visit.
Analysts say India’s defence sector offers an opportunity for the two countries to scale up their engagement especially after India has already imported arms worth $ 10 billion from the US over the last few years in government-to-government contracts. Indian corporates are looking forward to deepen their engagements with the powerful military-industrial complex in the US by ensuring that large scale manufacturing is done in India with
transfer of technology. The American defence companies can set up manufacturing units in India under the ‘Make In India’ campaign started by Modi soon after he took over as PM last year.
Another issue which needs to be sorted out between India and the US is the fierce lobbying unleashed by US-based pharma multinationals in the US which have queered the pitch on lack of IPR (intellectual property rights) or spotty IPR protections accorded to patents in India, when in fact India is in full compliance with the WTO rules. There is a dark foreboding that some of the Indian generic drug manufacturers are being sought to be systematically hounded over the last couple of years by the US FDA at the behest of the big pharmaceutical interests.