Civil Nuclear Energy Development: The Japanese Link
It is expected that the agreement between India and Japan for cooperation in the peaceful use of nuclear energy would accelerate the setting up of nuclear power projects in India and thus strengthen the overall energy security of the country.
The beginnings of the Indian civil nuclear programme can be traced to the early fifties which was led by a committed political establishment, and a talented pool of scientists and researchers.
Thinkers like Dr Homi Bhabha visualised a civilian nuclear programme in line with India’s ideology of peaceful uses of nuclear energy, which continues to be the blue print even today.
For India, development of its civilian nuclear energy has been of paramount importance. India has constantly aimed for energy security and prides itself on the ability of its scientists to continue their work in the area of civilian nuclear energy.
New Delhi has remained consistent in its ideology of developing civilian nuclear energy for the benefit of its people. This is also in line with India’s commitments under the Paris Agreement which aims to increase the share of non-fossil fuel energy to 40 per cent of India’s energy mix by 2030.
India’s impeccable non-proliferation record and engagement with the multilateral export control regimes have also made it a natural partner for cooperation in the peaceful uses of nuclear energy.
In this context, signing of the agreement between the Government of India and the Government of Japan for cooperation in the peaceful uses of nuclear energy in November 2016, and it's coming into force on 20 July 2017 is a historical development that underlines the strength of the bilateral strategic partnership between the two countries.
It is expected that the agreement would accelerate the setting up of nuclear power projects in India and thus strengthen the overall energy security of the country.
It would also open up the door for collaboration between Indian and Japanese industries in our civil nuclear programme.
With India set to accelerate its nuclear capacity addition in the coming years, Japanese companies can be seen as natural partners to collaborate with Nuclear Power Corporation of India Ltd. (NPCIL) to design nuclear reactors and balance of plant equipment and give build to print business to companies like L&T, Godrej, Reliance Power, BHEL and Bharat Forge, pushing the “Make in India” campaign.
With Japanese collaboration, capability development and localisation efforts will get the right impetus as has been experienced in other sectors like automobiles and electronics.
Currently India’s primary imports from Japan are machinery, iron and steel products, electrical machinery, transport equipment, chemical elements/compound, plastic materials, manufactures of metals, precision instruments, rubber manufactured, coal and briquettes.
With bilateral trade at $ 14.5 billion in 2015-16, the momentum for growth already exists. Japan is the third largest investor in India with a CAGR of 10.83 per cent and has been investing in the sector of drugs and pharmaceuticals, automobile and services and with the opening of the civil nuclear trade further FDI in this sector can be forecast.
The high level of Japanese nuclear sector manufacturing will be beneficial for the local industry as we achieve higher levels of localisation (much as in the case with other sectors like electronics, automobiles, etc.).
Specifically, the agreement will open doors for the well-developed Japanese nuclear industry to contribute substantially to building civilian Light Water Reactors in India utilising global supply chain networks.
While it will ensure a high level of quality of the reactor components or parts being provided, it will also go a long way in safe running of these reactors.
With well-established competitors from France and Russia in the fray for getting their share of the nuclear business in India, Japanese technology players may have to offer some extra sweeteners to get the lion's share in our nuclear pie eventually.
That sweetener is certainly long term and low-cost financing accompanying the technology.
Japan has been a long term partner in providing low-cost finance to various infrastructure projects like Delhi Metro Rail Corporation and Delhi-Mumbai Industrial Corridor Project and replicating this for the nuclear sector should be the trump card for Japan.
Over the years India has signed agreements with 14 countries to secure fuel and technology for India’s home grown programme.
The coming into effect of the Agreement with Japan gives India the required pace to further foster the civilian nuclear industry and contribute in the global nuclear energy production.