India, US at the business end of
nuclear deal By Siddharth
Srivastava
NEW DELHI - It is one year
since US President George W Bush visited India. To
mark the occasion, a high-powered US business
group is in India to take forward what will be a
major milestone of Bush's tenure as
commander-in-chief: the US-India civilian energy
nuclear deal.
Representatives of 38 major
companies of the US-India Business Council
(USIBC), a leading lobby group, are in New Delhi
to "keep the ball rolling" after the nuclear pact,
cleared by the US Congress and ratified by Bush,
which will enable India to import
international technology
estimated to require foreign investment of over
US$100 billion.
The USIBC team is led
by US Chamber of Commerce executive vice
president Lieutenant-General (retired) Dan Christman and
USIBC president Ron Somers, and is upbeat.
Christman said: "The future is bright for our
partnership and industry looks forward to working
together to meet India's future energy needs."
Somers said, "We have brought 38 major US
companies to India to make sure that we keep the
ball rolling on US-India business cooperation.
Eighteen of these companies are in the civil
nuclear industry. US-India peaceful atomic energy
cooperation is good for India and the United
States. Commercial implementation of US-India
civil nuclear cooperation will open the door to a
wide range of cooperation in high technology." The
USIBC comprises more than 300 US companies.
Promoting his company's case,
Tim Richards, director of General Electric, said:
"We know India's need for nuclear power. We
support India's fast movement into the Nuclear
Suppliers Group [NSG] and India signing the
International Atomic Energy Agency [agreement]. There are
huge opportunities in civilian nuclear cooperation
between India and the US. We have high-end
technology to offer. We have set up the most
advanced nuclear reactors in Japan and Taiwan."
More firms looking at garnering business
include Westinghouse Electric Co, which
supplies technology to almost half of the world's
operational nuclear power plants. Companies and
institutions in the nuclear energy business - such
as GE Energy, Nuclear Energy Institute, Thorium
Power, Westinghouse Power and WM Mining Co are
also making pitches.
Others that have
touched base with Mumbai-based state-run Nuclear
Power Corp India Ltd (NPCIL), which
builds and operates India's atomic power stations
to generate electricity, include French nuclear
power major Areva NP and Russian nuclear plant
manufacturer Atomstroyexport.
As per
New Delhi's revised targets of nuclear
power generation, India will have to build at least
30 more reactors of 1,000 megawatts each and
spend over $40 billion in the international
market.
New Delhi has
announced plans to double electricity production
from nuclear power plants by 2030 to realize the target
of 20,000MW and scale it up to 40,000MW by 2030. At
the current levels of 3,900MW, nuclear energy
constitutes only 3% of the installed capacity in
the country.
As domestic uranium
supplies are not enough to deliver such a big target,
NPCIL is working on a plan to set up 10,000MW of new
capacity via imported uranium over the next five
to 10 years.
NPCIL is also planning
to add another 5,600MW of nuclear power capacity
through domestic uranium supplies. The utility
is currently building around 3,000MW of additional
capacity that is expected to produce electricity
in the next two years.
New Delhi is
working on amending the Atomic Energy Act to
facilitate private sector participation in nuclear
power production that has so far been the
exclusive fief of government agencies. Many Indian
private players, including Reliance and Tata, have
expressed interest.
India is also looking
to turn into a supplier of low-cost nuclear
reactors to other countries, once international
roadblocks are finally cleared. India may look to
export pressurized heavy water reactors. According
to Indian nuclear officials, India could export
designs to countries, such as Cambodia, Indonesia,
Thailand and Vietnam, for less than $30 per
kilowatt, much cheaper than the international
average of $1,500 per kilowatt.
India is
keen to keep its options open rather than rely too
heavily on the US for its nuclear fuel supplies,
due to Washington's past record of sanctions.
This week. Foreign Minister Pranab
Mukherjee told Parliament that the Indo-US nuclear
deal is independent of India's cooperation with
Russia, which will help in building four more
atomic plants.
The proposal came about
during the recent visit of Russian President
Vladimir Putin to India. Two nuclear power plants
have already been built in the country by Moscow.
Mukherjee said that India's collaboration
with Russia in civil nuclear field had started
before the Indo-US deal and it is a "continuing
and long-term" one. Mukherjee is slated to visit
Japan later this month with nuclear diplomacy at
the top of his agenda.
But the US is going
to bargain hard. Washington has already impressed
on New Delhi that it will expect special leverage
due to its critical role in pulling India out of
global nuclear isolation. The US also expects a
few big-ticket defense contracts to come its way
as well.
Diplomatic efforts Intense diplomatic efforts continue to take
the nuclear deal to a final fruition.
India and the US still have to sort out a
final 123 Agreement, while the 45-nation NSG has
to arrive at a consensus on accepting India as a
"nuclear exception" due to its good record as a
responsible democracy, despite not signing the
nuclear Non-Proliferation Treaty.
Indian
Foreign Secretary Shivshankar Menon has presented
a draft of the 123 Agreement - an agreement for
cooperation as a prerequisite for nuclear deals
between the US and any other nation - for
discussions with Nicholas Burns, US under
secretary of state for political affairs, during
his visit to the US last month.
The US
Congress has to approve the 123 Agreement, to be
followed by a go-ahead from the NSG before actual
nuclear trade can take place.
New Delhi also has to
negotiate a safeguard agreement between with the
International Atomic Energy Agency that will apply only to the
separated civil nuclear sector.
Recently,
Richard Boucher, assistant secretary of state for
South and Central Asian affairs, told a hearing of
the foreign affairs sub-committee: "Progress is
being registered on all the necessary key steps,
perhaps not as rapidly as we might desire, but in
a manner that is consistent with the complexity
and weight of the issues under consideration."
While Russia, the US, France, Canada and the
United Kingdom will pitch for India for the sake of their
own business interests, New Delhi is aggressively
lobbying other countries such as Brazil, Japan and
China.
Shyam Saran, the prime minister's
special envoy on the India-US civil nuclear deal,
has been visiting major NSG countries to elicit
support. Saran has already visited Japan, Sweden
and Norway, known to be a bit sensitive about
issues related to nuclear proliferation.
In the recent past, both Japan and China
have been more positively inclined towards the
deal, with Beijing hinting that it is not averse
to bagging a few big contracts. Australia, which
is already dealing with China, has also softened
its stand after initially refusing to sell uranium
to India.
Siddharth Srivastava
is a New Delhi-based journalist.
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