Nuke pact on the cards as Modi visits Japan

A deal with India could benefit Japanese makers of nuclear components, such as Hitachi, which face shrinking business prospects after the 2011 Fukushima disaster.
A deal with India could benefit Japanese makers of nuclear components, such as Hitachi, which face shrinking business prospects after the 2011 Fukushima disaster.PHOTO: REUTERS

NEW DELHI • India says it is edging closer to a nuclear pact with Japan, which would open up one of the world's fastest-expanding power markets to vendors struggling for growth after the Fukushima disaster.

Indian Prime Minister Narendra Modi will go over the final steps of a civil nuclear treaty with his Japanese counterpart Shinzo Abe during a visit to Japan starting today, according to Mr Sekhar Basu, secretary at India's Department of Atomic Energy. If completed, the deal is seen as deepening ties between Asia's second- and third-largest economies while China seeks to expand its regional influence through the export of its own domestically designed reactors.

India's nuclear power market is estimated at US$150 billion (S$160 billion) and the country aims to boost energy generated from atomic plants to a quarter of its total by 2050, up from about 3.5 per cent now, according to the United States Department of Commerce.

The pact could benefit Japanese nuclear component-makers, including Mitsubishi Heavy Industries and Hitachi, who face shrinking business prospects after the 2011 Fukushima disaster led to the shutdown of the country's reactor fleet for safety checks.

Said Mr Sanjaya Baru, India director of the London-based International Institute for Strategic Studies: "You've had defence purchases, naval cooperation and military ties. But if the nuclear deal is done, we're really signalling a much stronger strategic partnership."

By agreeing to a civil nuclear cooperation pact with India, which has not signed the Treaty on the Non-Proliferation of Nuclear Weapons, Japan is showing it is willing to make an exception for India, Mr Baru said.

The Yomiuri newspaper reported last Sunday that the accord is scheduled to be signed during Mr Modi's visit and there will be a separate memorandum specifying that if India carries out a nuclear test, Japan can halt cooperation.

The agreement may lead to the eventual transfer of defence technologies after Mr Abe relaxed his country's arms export ban in 2014, said Ms Titli Basu, an associate fellow at New Delhi-based Institute for Defence Studies and Analyses. "Another critical area for India is to secure supply of high-end defence technology from Japan."

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A version of this article appeared in the print edition of The Straits Times on November 10, 2016, with the headline 'Nuke pact on the cards as Modi visits Japan'. Print Edition | Subscribe