Cracker of a Deal

India became the first country to sign a nuclear cooperation agreement with Japan without ratifying the Non-Proliferation Treaty (NPT). This will open the doors for Japan to share technology and forged steel, and allow US-based companies with substantial Japanese investments, including Westinghouse Electric, to build six nuclear reactors in the country. India plans to add 63 GW of nuclear-based energy by 2032.

The civil nuclear deal with Japan was crucial to execute the historic agreement signed in 2008 with the US, given that Japan Steel Work, or JSW, the world's biggest forged steel supplier, required the Japanese government's ratification before it could supply to India. Westinghouse, too, had committed investment in a project in Andhra Pradesh, but was awaiting the nod from Japan, or India's entry into the Nuclear Suppliers' Group (NSG). Besides, India has signed similar deals with the UK, Russia, France, Australia, Canada, South Korea, Mongolia, Kazakhstan, Argentina, and Namibia.

Japan, however, came under severe criticism because India has not signed the NPT and Comprehensive Test Ban Treaty (CTBT) yet.

Nuclear energy is critical for India. It has already committed to cut emissions intensity (carbon dioxide emissions per unit of GDP) by 33-35 per cent by 2030 from the 2005 levels. And to attain it, India needs to achieve 40 per cent of its cumulative electric power of 350 GW installed capacity from non-fossil fuel-based energy resources. Thirteen out of its 21 reactors are safeguarded by the International Atomic Energy Agency.

The deal also brings China into the spotlight. International pressure has been growing on China to rethink its strategy of blocking India's membership to NSG, but it has maintained that India must sign the NPT before its application is considered. Now with Japan entering into a bilateral agreement with India, it would be very difficult for China to look the other way. This treaty will boost India's credibility before the international community, and help build a strong case in its favour.

NSG is a group of 49 countries with nuclear capabilities and resources, and a consensus must be built among member nations before a new country is allowed to join it. In the last meeting at Seoul, China had maintained that if NSG members want to bring India on board by relaxing existing rules, Pakistan's application must also be considered. But the international community is suspect of Pakistan's credibility in non-proliferation, especially following allegations of supplying technologies to North Korea and Iran. In 2008, India had got a status equivalent to an NSG member, and since 1998 it has not conducted nuclear tests. In fact, one of the conditions in the agreement with Japan's restrains India from conducting future tests.

A full NSG membership for India is being seen as a move to balance the power equations in Asia. Now, China can take its time to rethink its strategy, as India concentrates on domestic challenges to kick-start its nuclear capacity expansion.