INDIA-US INSIGHT Relations, Accelerating India’S Economic Development”

Indian Council for Research on ICRIER-Wadhwani Chair in International Economic Relations India – US Policy Studies

“Advancing the Strategic Potential of India-US INDIA-US INSIGHT Relations, Accelerating India’s Economic Development”

Vol. 2, Issue 7 July 24, 2012

Prospects for India-Japan Civil Nuclear Cooperation - by Rajaram Panda

India-Japan bilateral of December 2001, when both countries Links of Interest ties have shown signs not only agreed to “work as partners ICRIER - Wadhwani Chair of promise in recent against proliferation” of WMD, but also India – US Insight years. Both countries agreed to cooperate in implementing Vol. 2, Issue 6 have found rigorous export controls on sensitive and “Assessing the Third US-India convergence of dual-use materials and technology.1 Strategic Dialogue” interests in security and strategic by Hemant Krishan Singh & Aman domains. Economic ties are also In the global scenario, the current Raj Khanna looking up. However, cooperation debate centres on two main areas of the June 18, 2012 on the nuclear issue, an area of nuclear issue, namely abolition of nuclear high potential, remains weapons and growing interest in the India-US Insight is produced by the Indian Council for unexplored. While India is looking peaceful use of nuclear energy. Research on International for various sources of energy to Proponents of the first raise the demand Economic Relations (ICRIER), meet its increasing demand to for complete nuclear disarmament. The an autonomous, policy- sustain economic growth, Japan main votaries of this argument are the oriented, not-for-profit possesses expertise and “have-nots” like Japan, NAM countries, economic policy think tank. specialised high technology in the Australia, Canada and New Zealand, ICRIER's main focus is to nuclear field. Civil nuclear who have “argued rather from an enhance the knowledge cooperation can add to the idealistic standpoint, emphasizing the content of policy making robustness of bilateral ties. Both 2 inhumanity of nuclear weapons”. through research targeted at countries hold different improving India's interface perspectives on nuclear issues There have also been recent moves with the global economy. because of past experiences and towards nuclear disarmament by the policies. However, there have ICRIER does not take specific “have” nations, led by the US, whose been some signs of change in policy stance is determined by the policy positions; accordingly, recent times. security environment that has emerged in all views, positions, and the post-Cold War era. In particular, conclusions expressed in this Controlling the proliferation of President Barack Obama’s speech in publication should be understood to be solely those weapons of mass destruction Prague in April 2009, that aimed to (WMD) provides a common of the author(s) create a world without nuclear weapons, platform for both India and Japan is significant. The US Nuclear Posture © 2012 by the Indian Council to speak with one voice. The series Review (NPR) released in April 2010 for Research on International of Joint Statements and “moved Obama’s nuclear disarmament Economic Relations (ICRIER) Declarations issued by the top policy a step further by declaring a leadership of both countries reduction in the number and role of routinely stress this point. Japan nuclear weapons in the national security has noted India’s impeccable of the US and its allies”.3 ICRIER - Wadhwani Chair in track record on non-proliferation. India – US Policy Studies This became demonstrably clear The second trend, centred on growing as far back as the Joint Statement interest in nuclear energy world-wide, Amb. Hemant Krishan Singh Chair

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012 including in developing Perspectives of India and Japan Even while negotiations on the countries, is driven by concerns civilian nuclear deal with the US about energy security and On the issue of civil nuclear were underway, there were global warming. While this cooperation between India and reports in 2006 that Washington “nuclear renaissance” may be a Japan, differences do exist. Though was putting pressure on India to welcome prospect, growth in several summit meetings have agree to a future moratorium on nuclear power generation taken place, a breakthrough in this testing of dual-use missile brings with it risks of safety, area has proved elusive. However, technology that could be used nuclear proliferation and the fact that both strive for the to deliver a nuclear payload and nuclear security. There is an ultimate goal of total elimination of testing another atomic device as inherent risk of nuclear power nuclear weapons remains a quid pro quo for the civilian being diverted towards military unquestioned. nuclear deal.6 India rejected purposes instead of the originally such a commitment as a back- intended peaceful uses. India-Japan bilateral ties had door entry to the CTBT, which it Therefore, securing this risk retreated into a chill following feels only came into existence demands that necessary safety India’s 1998 nuclear tests at after those who possessed mechanisms, non-proliferation Pokhran. Japan suspended all nuclear weapons had safeguards and nuclear security economic aid to then on-going developed the requisite know- measures are put in place. In projects under its ODA. The move how. fact, the principle of the three was seen in India as Japan’s over- “S’s” was agreed upon by the reaction and lack of understanding In view of the waiver granted by G-8 countries and was included of India’s compulsions. The 1998 the 45-nation NSG to India in 2008 in the Leaders’ Declaration of nuclear tests had also invited to conduct trade in nuclear the G-8 Hokkaido-Toyako sanctions from the UN and other materials and technology, India Summit in 2008. Here, the role of countries like the US. Political obviously expects Japan to re- the IAEA becomes essential. relations, however, steadily examine its position in the improved from 2001 onwards. specific context of bilateral civil This paper attempts to address nuclear commerce. the issue of the ongoing debate As the only country in history to in Japan, its dilemma on forging have been a victim of nuclear The ice was finally broken during civil nuclear cooperation with attack, Japan is ultra-sensitive to all former Japanese Prime Minister India, and how this cooperation things ‘nuclear’ and public opinion Yukio Hatoyama’s visit to India in would help in bringing relations is vehemently opposed to nuclear December 2009. In a joint press between the two countries proliferation and weapons in any interaction with Indian Prime closer. The possible impact of form.4 Unsurprisingly, Japan has Minister Dr. Manmohan Singh, he the Fukushima incident on remained inflexible on issues such as publicly referred to exchanges Japan’s nuclear future is also the Nuclear Non-Proliferation Treaty with his Indian counterpart on examined. The paper concludes (NPT) and Comprehensive Test Ban CTBT and Fissile Material Cut-Off that though the Fukushima Treaty (CTBT). According to the Treaty (FMCT) and expressed incident has resulted in a Japanese perception, a public appreciation for the reassurances temporary setback to the acknowledgement in India’s favour conveyed to him by Dr. Singh, negotiations on civil nuclear on these issues would send a wrong indicating that both countries will cooperation between the two signal to the world about Japan’s be able to act on these countries, neither country can future nuclear intentions. understandings to ensure a do away with nuclear energy as “positive conclusion”. Thus, even an option for their energy This underscores the fact that without a breakthrough, the security. On the contrary, India’s refusal to accede to the NPT seeds of progress on civil nuclear Fukushima provides a lesson to and CTBT remains an irritant in cooperation were sown. countries to move towards bilateral ties. stringent safety mechanisms to India’s quest for Nuclear Energy make nuclear energy a reliable On its part, India, from the very and clean source of energy for beginning, has taken a consistent India has a well developed and the future. position that the NPT is largely indigenous nuclear power discriminatory in nature and that program currently consisting of 20 the CTBT is a “flawed” pact.5 civilian nuclear reactors. It expects to develop a 20 GWe

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012 nuclear capacity on line by 2020 bilateral civilian nuclear cooperation reconsider its position. Japan’s and 275 GWe by 2052, with the pact on June 28, 2010. Under this experience in Kazakhstan could 15 aim to supply 25 per cent of pact, Japan would export its nuclear also be an appropriate guide. electricity from nuclear power by power generation technology and This will propel engagement by then.7 related equipment to India while Japanese corporations in Indian banning India from using them for economic activities, giving a Currently, India’s share of nuclear military purposes or transferring them tremendous boost to dormant energy in its overall energy to another country.10 economic ties between the two production is less than 3% but it countries. has plans to increase this in the The Japan Forum on International coming decades.8 It has also Relations (JFIR) has strongly urged When India obtained the NSG mastered some of the related Japan to forge civil nuclear links with waiver, it had agreed to let the technologies such as uranium India.11 Supporting as it does India’s International Atomic Energy exploration, mining, fuel economic growth momentum, Agency inspect 14 of its 20 fabrication, heavy water Japan is cognizant of the fact that reactors. To enter into the production, reactor design and India’s greatest challenge to nuclear deal with the US, India construction and operation, maintain growth is to secure agreed to separate its civil and besides reprocessing and waste sufficient energy supplies, especially military nuclear facilities and to management. In addition to the for the generation of electricity. place its civilian facilities under fast breeder test reactor (40 Japan’s technology and expertise in IAEA safeguards. MWth) at Kalpakkam, it plans to generating and ensuring the safety build a 500 MWe reactor (PFBR), of nuclear power is among the best The US and France have strong which is likely to be operational in the world and therefore the JFIR interest in encouraging Japan to by late 2012. India is also urged Japan to cooperate with enter into a civil nuclear developing technology to utilize India. In particular, the JFIR identified agreement with India in order to its abundant resources of thorium specific reasons why Japan should facilitate their own nuclear as a nuclear fuel in the third cooperate with India, including (1) commerce through the stage of its three-phase nuclear the political significance of such construction of nuclear power programme.9 cooperation; (2) the need for India plants in India. to deal with its lack of energy Japan’s compulsions resources; (3) the growing threat of On June 18, 2010 the Japanese global warming; (4) the advantages Cabinet adopted a new 10-year Even as energy-starved India is of promoting cooperation in science growth strategy, which included keen to woo Japan’s highly and technology; and (5) the promoting export of nuclear capable nuclear power industry, contribution by Japanese power generation facilities.16 Kan Tokyo has held back. In view of corporations involved in nuclear Naoto’s plan to “rebuild the the entering into force of the power.12 The JFIR recommendations country” through his New Growth India-US nuclear agreement in said: “…we call on the Japanese Strategy aimed “to promote ties December 2008 and further government to cooperate with India with emerging economies in Asia nuclear agreements signed by on this issue, while at the same time and encourages exporting India with countries like France, showing initiative in the global infrastructure – including nuclear Russia, Canada, Kazakhstan and campaign for nuclear technology – to the region by South Korea, Japan finds itself disarmament.”13 cooperating with governments now in a relatively awkward and the private sector”.17 position. Japan, as on date, is one of the few nations to possess technologically On October 22, 2010 a Though still non-committal, advanced nuclear power reactors. consortium of thirteen Japanese Japan understands the strategic Toshiba alone possesses over 30 per companies18 joined hands to importance of India and the cent of global civilian nuclear establish International Nuclear significance of meeting its reactor building capability.14 If Energy Development of Japan energy demands. There is a Japan relaxes its policy and agrees Co. Ltd. (JINED), headquartered greater appreciation in Japan to cooperate with India, the Indian in Tokyo, to support nuclear that nuclear power would also nuclear market will unfold growth power plant projects in emerging help India fight global warming. potential to the tune of $100 to $150 countries.19 The mission of JINED is Both the countries held the first billion within a decade. This provides to present proposals to countries round of talks aimed at sealing a a huge incentive for Japan to that are going to build their first

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012

nuclear power stations. JINED President Ichiro Takekuro (from Tokyo Nobumasa Akiyama of Hitotsubashi Electric Power Co.) announced his aspiration to “prepare best University has observed: “This (civil proposals that are comprehensive packages of the know-how nuclear) deal is important in a accumulated over the last 50 years (by Japan) in areas such as symbolic way. But there are some 20 advanced technology and fuel procurement”. Currently in other areas in which the two collaboration with the Ministry of Economy, Trade and Industry (METI), countries could strengthen their JINED is aiming to win nuclear power plant project orders in Ninh ‘strategic partnership’, as there 21 Thuan province, Vietnam. JINED has determined a behavior code could be a potential to complicate centered around the following three pillars: (a) to see that a safety the bilateral relationship in the course culture that accords top priority to the three S’s (safety, security and of negotiating a nuclear safeguards) takes solid root in the company; (b) to engage in cooperation agreement.”26 He proposal activities adapted to the needs in the concerned country; further says: “without Japanese and (c) to earn and keep the trust of stakeholders and society as a involvement, American and French 22 whole. nuclear businesses could be denied opportunities in the Indian nuclear Subsequent to the NSG waiver in September 2008, the US, Russia and market. Also, India could face a France quickly concluded commercial nuclear agreements with India. delay in its nuclear energy program. Though the political leadership in Japan realized the futility of In this respect, India may push this remaining aloof, obtaining the approval of the domestic constituency agenda in its relationship/partnership on policy reversal for India remained difficult. French and American with Japan.”27 reactor vendors have complex tie-ups with leading Japanese nuclear engineering companies for the supply of major components. The There is a growing realization in French company Areva and US-based corporations Toshiba- Japan that indefinitely postponing a Westinghouse and General Electric-Hitachi were initially not allowed to decision will displease both the US engage in nuclear commerce with India unless Japan had formalized and France apart from hindering an agreement for nuclear cooperation with India. business prospects in India being

Since then, licence agreements between the Japanese companies pushed by METI. At the same time, Toshiba and Hitachi and their US subsidiaries, Westinghouse and GE some analysts of the nuclear issue take the view that granting India an respectively, have been liberalized or flexibly interpreted. This has enabled Westinghouse Electric Company to sign a memorandum of exemption from NSG guidelines was understanding for an “early works agreement” (EWA) with Nuclear a mistake and some of the harm Power Corporation of India Ltd (NPCIL) on June 13, 2012 aimed at done to the non-proliferation regime supporting the future construction of AP1000s at the Mithivirdi site in could be reversed if Japan holds firm Gujarat. The agreement represents significant progress toward the on extracting a no-testing pledge by India. realization of the India-US Civil Nuclear Agreement signed in 2008. The EWA will include preliminary licensing and site development work. Westinghouse hopes to complete negotiations on the EWA by autumn This basically implies that even if 2012. According to Gary Urquhart, vice president and managing current Prime Minister Yoshihiko Noda director of Westinghouse India, this “agreement is an important step is favourably inclined, he will have to which will allow Westinghouse and NPCIL to continue the work await an opportune moment to necessary for keeping the Mithivirdi project moving forward”.23 move civil nuclear cooperation with India forward. Also, GE-Hitachi Nuclear Energy (GEH) announced on June 13, 2012 that it expects to sign an EWA with NPCIL in the near future, to bring its Impact of the Fukushima disaster Economic Simplified Boiling Water Reactors (ESBWR) to India. Site preparation for the ESBWR units is under way near Kovvada in the Given the widespread anti-nuclear state of Andhra Pradesh.24 For more than 50 years, GE-Hitachi has sentiment following the meltdown at been designing and building the most advanced boiling water the Fukushima Daiichi power plant, reactors on the planet. The planned agreement with NPCIL will PM Kan announced Japan’s plan to facilitate efforts to bring the world’s best reactors to India. gradually phase out the operation of With the above agreements, GE-Hitachi and Toshiba-Westinghouse all nuclear reactors and thereby are no longer constrained to sell nuclear plants and technology to eliminate dependence on nuclear energy completely. This was done in India with or without the Japanese Diet giving its formal approval.25 Japan’s role in India-US and Indo-French nuclear cooperation is at a rather hasty manner without giving stake. due consideration to alternatives

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and without taking the Cabinet into the report, the panel exposed the regulator—that would monitor confidence. All of Japan’s 52 nexus between the regulators and and inspect power-company nuclear power plants had been regulated in Japan's nuclear operations, including risk shut down by May 2012, leaving it industry, concluding that this management, governance without nuclear power for the first powerful industry group had and safety standards. The time in 40 years. The Noda pressured its overseers to loosen report also recommends government has recently moved to regulations or postpone greater consolidating and rewriting restart two reactors at the Oi stringency. The panel also found existing nuclear laws and nuclear power plant under intense that the Fukushima No. 1 nuclear regulations to bolster safety pressure from businesses plant disaster was “man-made” and and set criteria for aspects concerned about summer power not natural, fundamentally the result such as decommissioning cuts, even though METI Minister of a corrupt regulatory system that nuclear reactors. If the

Yukio Edano candidly admitted allowed Tepco to put off critical government does so, that the government failed to build safety measures.31 Panel Chairman restarting other reactors a public consensus before ordering Kiyoshi Kurokawa observed: “Its which remain shut could the two nuclear reactors back fundamental causes are to be become smoother as public

confidence rises.34 But in the online on June 16, 2012. found in the ingrained conventions short term, there is a fear that of Japanese culture: our reflexive the panel findings could fuel The Oi plant in Fukui prefecture was obedience; our reluctance to the first to pass stress tests question authority; our devotion to complaints that Japan is introduced in 2011 to address ‘sticking with the program’; our restarting nuclear reactors 28 32 public concerns about safety. groupism; and our insularity.” before key reforms are in The impact of the Oi restart will not place.35 The Mainichi The panel called for a complete be felt immediately, however. Both Shimbun, in an editorial revamp of Japan's nuclear industry reactors must go through a series of exhorting the government to and regulatory structure, issuing a safety checks before they can be take the panel report series of recommendations, the brought to full capacity. This seriously, has observed: “… creation of a permanent process is expected to last about six the government must not parliamentary committee to monitor weeks. The end of Japan’s self- allow power suppliers to a new nuclear regulator to be imposed nuclear hiatus could pave resume operations at their created later in 2012, and a the way for restarts at other plants idled nuclear plants without rewriting of rules to "meet global and the likely candidates include closely studying the report's standards of safety, public health Ikata in southwest Japan and valuable conclusions.”36 and welfare.''33 Tomari in the far north. The Mainichi Japan’s Indian dilemma Shimbun has harshly criticised Noda Though the government is not and observed in an editorial that required to take into account or It is not surprising that the Japan’s energy future must be implement the panel's findings and Japanese government as well decided by its people.29 recommendations, its weight as public seem confused on cannot be overlooked as it will be In the meanwhile, a ten-member what stance to adopt considered more objective than the Diet-appointed panel, comprised towards India. While there is enquiry being undertaken by the largely of scientists, lawyers and no sharp division either in the government itself. Demands are academics, investigating the LDP or the DPJ that would going to mount on the Noda accident in Fukushima released its threaten a split in either party government to take the conclusions findings in a 640-page report on on the issue of civil nuclear of the parliamentary-mandated July 5, 2012 condemning the cooperation with India, the panel into account when Japan country’s atomic-energy industry average public is reviews nuclear-safety standards and regulators alike. The report said uninterested in this as a and revamps its regulator later this that the regulators and Tepco foreign policy issue. Yet, there year. "failed to correctly develop the is no denying the fact that most basic safety requirements,''30 It is possible that the government the Hiroshima experience, leaving the Fukushima Daiichi plant might seriously consider the panel’s and now the Fukushima vulnerable to the earthquake and suggestion to set up an agency accident, lurk constantly in tsunami that hit on March 11, 2011. appointed by the Diet — separate the Japanese consciousness Using harsh language throughout from the government’s nuclear and thus shape Japanese

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012

thinking. This tendency is unlikely to undermine India’s interests in a minister Masayuki Naoshima be erased anytime soon. major way as India has several explained the “Vision” of the options at its disposal. Sourabh government.44 He said that The DPJ finds itself in the midst of Gupta of Samuels International Japan needs to formulate defining a course that would not Associates in Washington D.C. holds and implement a strategy abandon Japan’s stated policy on the view that “India could still that allows it to be a winner in nuclear disarmament, while at the access Russian and South Korean the global scenario by same time facilitating nuclear technologies, though the range of traversing the boundary commerce with India. Even though options and quality of such between the government the forging of a ‘strategic and technologies might retard India’s and enterprises, between global partnership’ has already own progress in developing industry ministries, as well as the received the strong endorsement of technology standards that could national and local the foreign policy community in make its civil nuclear sector globally governments.

Japan, the country is struggling to competitive someday in the future find a middle path on the vexed … if ever.”39 While India looks for Nuclear commerce between nuclear issue that would enable it some positive signal from Japan, India and Japan will be to meet both ends. Tokyo seems to be avoiding sending consistent with Japan’s vision

the wrong signal.40 for a future industrial structure

If Japan continues to prolong its in which nuclear power plants deliberation on this issue, India will India–Japan relations do not carry are an integral part of a larger surely not hesitate to enter into civil any historical baggage and the package. nuclear cooperation agreements ‘strategic” character of the with other countries in order to relationship will receive a huge In the context of India-Japan satisfy its energy needs. During his impetus if Japan sheds some relations, it is important to visit to South Korea in June 2010, element of inflexibility on the nuclear note that the presidents of External Affairs Minister S.M. Krishna issue despite its extremely sensitive Hitachi, Toshiba and Mitsubishi recognized “Korean capabilities in nature. The ability to make mutually Heavy Industries civil nuclear energy” and beneficial compromises is the key to accompanied Naoshima exchanged drafts for inking an a strategic partnership. Going by this when he visited India in April Inter-Governmental Agreement on spirit of accommodation, a 2010. The leaders of these Peaceful Uses of Nuclear Energy.37 demonstration of flexibility towards companies form the core - South Korea is the world’s fifth its strategic partner (India) on the lobbying group which is largest atomic energy producer issue of nuclear commerce would encouraging the government which accounts for 40 per cent of be “a powerful statement of of Japan to work out a civil South Korea’s power generation.38 Japan’s investment in the bilateral nuclear deal with India. The Korea Electric Power Company strategic relationship”.41 This is a During this visit, it transpired has secured a $40 billion nuclear challenge before the incumbent that both sides agreed to put deal to build and operate four centre-left DPJ. aside past differences on the nuclear reactors (1000 MWe each) nuclear issue, and work in UAE and has announced similar If one follows the DPJ’s trade policy towards a civil nuclear treaty deals with Turkey as well. The India- carefully, there is a slow but careful with the establishment of a South Korea civil nuclear pact was shift towards promoting exports and Joint Working Group (JWG) inked during Indian President investments in emerging markets. on civil-nuclear cooperation. Pratibha Patil’s state visit to that India fits into this Japanese The decision to establish a country in July 2011. Japan cannot framework perfectly. In June 2010, JWG was taken in a meeting afford to watch silently as such METI unveiled the government’s new between Deputy Chairman of developments take place in its “Industrial Structure Vision” the Planning Commission, neighbourhood. strategy.42 Modestly recognizing the Montek Singh Alhuwalia and “deadlocked position” of Japanese Naoshima during the fourth Though the importance of forging a industries that have struggled to ministerial-level meeting of strong economic and political keep pace with the world’s major the India-Japan Energy relationship between India and players and market changes, the Dialogue.45 Japan remains undisputed, Japan’s “Vision” identified “Four Shifts” in the “policy of denial” of a nuclear government and the private The JWG can prove useful for agreement because of its own sectors.43 In a message to the both sides. While India will domestic constraints will not Japanese people in June 2010, METI stand by its commitment to

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012

core global non-proliferation policy makers in Delhi have the nation’s reactors.47 Prime principles, the DPJ will be in a potential to destabilize the system. Minister Noda is going to face better position to explain its stand The Indian government thus faces a increasing public pressure. His to the Japanese electorate. India is major challenge in satisfying choices are limited. unlikely to change its position on disgruntled constituents without the CTBT which was reiterated by disrupting the development of its Conclusion Singh to Hatoyama in December nuclear sector. 2009. In order to make a civil In the post-Fukushima scenario, nuclear agreement possible, Japan Post-Fukushima pressures Japan is faced with critical may reinterpret its stance in order choices in its energy policy: to assuage the sentiments of the The crippling of the Fukushima whether to continue with its Japanese public by laying stress on Daiichi nuclear power plant raised partial dependence on strong export controls and non- fundamental questions worldwide nuclear energy by significantly diversion clauses, to which India is about the future of the global upgrading regulatory unlikely to object. nuclear energy industry and led to mechanisms or to increase

calls for higher international reliance on renewables due to

For the DPJ, the threshold for standards on nuclear safety.46 This mounting anti-nuclear possible nuclear commerce with development casts a shadow on sentiment in the country. In

India is high. For progressing the possible future nuclear cooperation either case, the role of nuclear transaction, India needs to make a between India and Japan. energy as a key source of strong commitment to Japan, power is likely to be similar to what it made at the NSG Prior to Fukushima, Japan’s nuclear circumscribed, despite the in 2008, for which a modality can power industry was on the cusp of a huge economic cost. be found. Even thereafter, it will new period of growth and the DPJ require a great deal of political skill government’s roadmap had called The importance of future on the part of the DPJ and Noda in for increasing the share of nuclear cooperation between India particular to win over the Japanese energy to 50% by 2030. Japan was and Japan in the civil nuclea r electorate. forging uranium supply deals from field lies in the fact that a Kazakhstan to Namibia. It had also recession-hit Japan can ill India’s challenges moved closer to launching its afford to derail the economic controversial nuclear fuel recycling benefits from nuclear India will face a huge absorption system and restarting the Monju fast commerce with a strategic capacity problem once civil breeder reactor. partner. nuclear commerce unfolds a vast new arena of business in the The Fukushima incident only Moreover, METI will find it hard country. Mere agreements for strengthened the anti-nuclear lobby to convince major companies setting up new nuclear reactors are and the Japanese government was like Toshiba, Hitachi and MHI to not enough; execution of projects forced to revisit its nuclear energy simply abandon the nuclear entails a host of issues. Addressing development programs. industry as a source of the these issues will be important as the nation’s energy needs. Noda’s agreements themselves. Issues such While Japan cannot afford to simply decision to restart two as land acquisition, rehabilitation abandon nuclear power as a reactors, with possibly more to and resettlement, environmental source of energy, the Noda follow in the coming months permits and water usage, government will remain under when better regulatory electricity pricing and liability are intense pressure to assuage public standards are in place, is a all extremely contentious. There is concerns regarding safety cautious step in the right the inherent risk of getting regulations designed to prevent direction. entangled in legal gridlock. another Fukushima-type accident. In July 2012, Tokyo has witnessed The signing of a MOU between While Japan will face ideological Japan’s largest anti-nuclear rally Westinghouse and NPCIL on hurdles, India may find it difficult to since the Fukushima disaster. Over June 13, 2012 with another select sites for new plants due to 100,000 protestors, reportedly the between GE-Hitachi and NPCIL environmental issues. With biggest such gathering in Japan’s to follow, provide some discontentment already brewing in history, urged the government to impetus for an India-Japan civil rural areas, further miscues by completely halt restarting of the nuclear cooperation

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012 agreement in the coming months. Even though a been developing a nuclear fuel cycle to exploit its reserves fast-tracked deal is not on the cards, it has not of thorium. Now, foreign technology and fuel are entirely been written off. From India’s side, Japan expected to boost India's nuclear power plans considerably. All plants will have high indigenous needs to be given the space to proceed at a engineering content. India has a vision of becoming a pace it is comfortable with as the government in world leader in nuclear technology due to its expertise in

Japan has to take the domestic constituency on fast reactors and thorium fuel cycle. http://www.world- board before framing its nuclear policy towards nuclear.org/info/inf53.html

India. That has precisely been India’s approach 9. Gupta and Sastry, n.,7. on this sensitive but important bilateral 10. http://search.japantimes.co.jp/print/nn20100701f4.html endeavour since negotiations on civil nuclear cooperation began. India can wait a while 11. “India’s Leap Forward and Japan”, The 29th Policy longer, but not indefinitely. Recommendations, The Policy Council, The Japan Forum

on International Relations, Tokyo, September 2007, pp. 18- 19.

 Dr. Rajaram Panda, a leading expert on East Asian 12. Ibid, p.4 affairs, was formerly Senior Fellow at the Institute for 13. Ibid . Defence Studies and Analyses, New Delhi. He can be , p 4 reached at [email protected] 14. Indeed, there are two US companies- General Electric and Westinghouse – are taken over by Hitachi and Toshiba References respectively. Also, the French company, Areva, has close technical cooperation agreement with Mitsubishi and is 1. Ministry of Foreign Affairs, Government of Japan, dependent for certain advanced materials and machine “Japan-India Joint Declaration”, Tokyo, 10 December tools. Japanese companies produce technologically the 2001, http://www.mofa.go.jp/region/asia- most advanced civilian nuclear reactors. pacific/india/joint0112.html 15. Kazakhstan’s Kazatomprom acquired 10 per cent of 2. Tetsuya Endo, “Two sides of the same coin: Nuclear Westinghouse Electric Corporation from Toshiba for $540 Disarmament and the Peaceful Use of Nuclear Energy”, million in October 2007. As a result, Westinghouse gained AJISS-Commentary, No. 92, 26 May 2010. access to Kazakh uranium and potentially more fuel 3. Ibid. fabrication capacity and in return, Kazatomprom gained access to the world nuclear fuel market. For Japan- 4. “Hiroshima, Nagasaki demand halt to Japan-India nuke Kazakhstan nuclear cooperation, see Togzhan Kassenova, pact talks”, The Mainichi Daily, 3 July 2010, “Kazakhstan’s nuclear ambitions”, Bulletin of the Atomic http://mdn.mainichi.jp/madnews/national/news/201007 Scientists, 28 April 2008,

03p2g00m0dm064000c.html; “Tokyo NGO criticize http://www.thebulletin.org/print/web-

Japan-India nuclear pact for spreading proliferation”, edition/features/kazakhstans-nuclear-ambitions The Japan Times, 1 July 2010, 16. http://search.japantimes.co.jp/print/nn20100701f4.html http://mdn.mainichi.jp/mdnnews/business/news/20100628 p2g00m0bu042000c.html 5. “Japan wants India to sign CTBT, PM puts onus on US, China”, The Indian Express, 29 December 2009, 17. Masako Toki, “Japan’s dilemma: nuclear trade vs nuclear http://www.indianexpress.com/news/japan-wants-india- disarmament”, Bulletin of the Atomic Scientists, 3 to-sign-ctbt-pm-puts-onus-on-us-china/561027/0 November 2010, http://www.thebulletin.org/print/web- edition/features/japan%E280%99s-dilemma-nucl... 6. Siddharth Srivastava, “India has China in its range”, Asia Times, 14 April 2007, 18. The 13 Japanese companies consist of nine electric http://www.atimes.com/atimes/printN.html utilities, three manufacturers, and the Innovation Network Corporation of Japan. These thirteen companies are: 7. Arvind Gupta and Ch. Viyyanna Sastry, “Time for India to Hokkaido Electric Power Co., Tohoku Electric Power Co., Export Nuclear Power Reactors and Peaceful Nuclear Inc., The Tokyo Electric Power Co., Inc., Chubu Electric Technologies”, 20 January 2011, Power Co., Inc., Hokuriku Electric Power Company, The http://www.idsa.in/idsacomments/TimeforIndiatoExportN Kansai Electric Power Co., Inc., The Chugoku Electric uclearPowerReactorsandPeacefulNuclearTechnologies_ 120111 Co., Inc., Shikoku Electric Power Co., Inc., Kyushu Electric Power Co., Inc., Toshiba Corporation, Hitachi, 8. India has a flourishing and largely indigenous nuclear Ltd., Mitsubishi Heavy Industries, Ltd, and Innovation power program and expects to have 14,600 MWe Network Corporation of Japan. nuclear capacity on line by 2020 and 27,500 MWe by 2024. It aims to supply 25% of electricity from nuclear 19. See Peter J Brown, “Japan Weighs role in India’s nuclear

power by 2050. Because India is outside the Nuclear boom”, http://www.atimes.com/atimes/printN.html

Non-Proliferation Treaty due to its weapons program, it 20. “Launch of International Nuclear Energy Development of

was for 34 years largely excluded from trade in nuclear Japan”, Nuclear Power Industry News, 26 October 2010, plant or materials, which has hampered its development http://nuclearstreet.com/nuclear_power_industry_news/b/ of civil nuclear energy until 2009. Due to these trade nuclear_powerr_news/archive/201... bans and lack of indigenous uranium, India has uniquely

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INDIA-US INSIGHT| Prospects for India-Japan Civil Nuclear Cooperation| Vol.2, Issue7 | July 2012

21. http://www.mhi.co.jp/en/news/story/101015en.html

22. Nuclear Power Industry News, n. 20.

23. ICRIER - Wadhwani Chair in “US firm Westinghouse signs MoU for building nuclear plants in India”, Business Today, June 14, 2012, India – US Policy Studies http://businesstoday.intoday.in/story/us-firm-westinghouse-signs-mou-on-india-nuke- plant/1/185448.html Indian Council for Research 24. on International Economic “US venders move towards India deals – Nuclear Engineering”, http://www.dianuke.org/us- Relations vendors-move-towards-india-deals-nuclear-engineering/

Core 6A, 4th Floor 25. In the US, Hitachi is partnered with General Electric and Toshiba with Westinghouse. India Habitat Centre 26. Quoted in Brown, n. 19.

Lodhi Road 27. Ibid.

New Delhi-110 003 28. According to a poll by the Mainichi Shimbun newspaper, 71 per cent of people cautioned against a rush to restart Oi reactors, while 25 per cent supported Noda’s stance.

29. Phone: “Japan’s energy future must be decided by its people”, The Mainichi Weekly, editorial, 4 July 2012, http://mainichi.jp/english/english/perspectives/news/20120704p2a00m0na012000c.html 91 11 43112400 X 402 /435 30. Mitsuru Obe and Phred Dvorak, “Japan panel blames nuclear crisis on regulator, industry tie”, Wall Street Journal, 5 July 2012, Fax: http://online.wsj.com/article/SB10001424052702304141204577508054139099724.html 91 11 24620180 31. Kazuaki Nagata, “Regulatory system corrupt; safety steps were rejected”, The Japan Times, 6 July 2012, http://www.japantimes.co.jp/print/nn20120706al.html

32. Quoted in Ibid Website: 33. Obe and Dvorak, n. 30. WWW.ICRIER.ORG/ICRIER_WADH WANI 34. Ibid

35. Justin McCurry, “Japanese panel: Fukushima a ‘man-made’ disaster”, Christian Science Monitor, 5 E-Mail: July 2012, http://www.csmonitor.com/World/Asia-Pacific/2012/0705/Japanese-panel-Fukushima-a- [email protected] man-made-disaster-video 36. “Gov't, legislators must take Diet panel's nuclear crisis report seriously”, Mainichi Shimbun, 6 July 2012, http://mainichi.jp/english/english/perspectives/news/20120706p2a00m0na002000c.html INDIA-US INSIGHT 37. P.S. Suryanayana, “New Delhi, Seoul to begin talks on civil nuclear cooperation”, The Hindu, 19 Vol.2, Issue 7 June 2010. July 2012 38. Jasbir Rakhra, “India-South Korea Relations: The Nuclear Enterprise”, http://www.ipcs.org/article/india/india-south-korea-relation-the-nuclear-enterprise-3084.h...

39. Quoted in Brown, n. 19. 40. Brown, n. 19.

41. Sourabh Gupta quotes in Peter J Brown, “Japan weighs role in India’s nuclear boom”, Asia Times, 19 June 2010, http://www.atimes.com/atimes/Japan/LF19Dh02.html

42. See, “The Industrial Structure Vision 2010”, Ministry of Economy, Trade and Industry, June 2010, http://www.meti.go.jp/english/policy/economy/industrial.html

43. The “Four Shifts” are: shift in industrial structure (building a new industrial structure that connects potential strengths to business), support for business model shifts by enterprises (win by technology and by business); free from dichotomy between globalization and domestic employment (job creation by aggressive globalization “and” building world-class business infrastructures, and shift in government role (survive in global market to acquire added value).

44. For the text of the message, see http://www.meti.go.jp/english/policy/economy/industrial.html

45. http://breakingnews.gaeatimes.com/2010/04/30/india-japan-to-establiosh-a-working-group...

46. For a detailed analysis of Japan’s current nuclear dilemma, see Rajaram Panda, “Japan’s Nuclear Energy Dilemma in the post-Fukushima Period”, IFANS Review (Seoul), vol.19, no.2, December 2011, p. 101-138. 47. Hiroko Tabuchi, “Tokyo rally is biggest yet to oppose nuclear plan”, The New York Times, 16 July 2012, http://www.nytimes.com/2012/07/17/world/asia/thousands-gather-in-tokyo-to-protest-nucl...

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