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Implications of an agreement: What the India-Japan nuclear deal really means

The inking of a Memorandum of Understanding between India and Japan on civil nuclear energy is significant. Its significance goes beyond India-Japan bilateral relations, as do its implications, not least of which is the mobilisation of the much-vaunted United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act.

The MoU signed by Indian Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe, was positioned as being about more than just commerce — “Japanese private investments are also rising sharply,” said Modi — and clean energy;  but also a sign of mutual confidence and partnership for a secure world.

“No friend will matter more in realising India’s economic dreams than Japan. We have made enormous progress in economic cooperation as also in our regional partnership and security cooperation,” said Modi after signing the deal. On his part, Abe said, “We have taken relationship to a new level.”

Now onto the Americans, and on his India visit in January 2015, President Barack Obama spoke about how six years after his predecessor George W Bush and then prime ministerManmohan Singh signed a nuclear deal, the countries were finally “moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability” (emphasis added).

It is the factor of ‘commercial viability’ that has held back the India-US relationship since GE-Hitachi and Westinghouse (owned by Toshiba) — the two biggest manufacturers of nuclear reactors in the US — are controlled/owned by Japanese companies. And until as recently as March this year, Japan opposed the India-US nuclear deal on the grounds of the ‘tracking’ clause — which the US had withdrawn during Obama’s visit, even after the prickly issue of ‘liability’ had seemingly been resolved.

With Saturday’s signing of an MoU on civil nuclear energy between Modi and Abe, two bottlenecks could swiftly be removed.

First, India no longer has to choose between slightly obsolete Russian nuclear technology and expensive European Pressurised Reactors from French manufacturer Areva. The added option of American nuclear technology manufacturers and indeed Japanese ones will mean competitively-priced nuclear reactors for India. With India’s growing energy demand and drive towards green energy, nuclear power will play a huge role in the years to come.

Secondly, Tokyo’s signing of a nuclear agreement with New Delhi also sends out the message that Japan backs India’s membership in the dual-use technology denial regimes — the Missile Technology Control Regime, the Wassenaar Arrangement, the Nuclear Suppliers Group and the Australia Group. Membership of these groups, something India has been chasing for a while, has clear benefits: Access to uranium for starters; decision-making power on issues of export control and non-proliferation; and a boost to India’s hopes of permanent membership in the UN Security Council.

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