Vol. XLI No. 06 February 05, 2017

India-Japan Nuclear Deal

Yohannan Chemarapally

AFTER years of protracted negotiations, India and Japan finally inked a civilian nuclear cooperation agreement in November last year, during the course of the State visit by the Indian prime minister, Narendra Modi. The deal will now allow Japan to supply India with nuclear fuel, equipment and technology for nuclear power production. India and Japan had started negotiations soon after the signing of the India-US nuclear deal in 2006. Formal negotiations started six years ago. It was only after the right wing nationalist government led by Shinzo Abe came back to power that the negotiations gained momentum.

Japanese public opinion continues to remain vehemently opposed to the spread of nuclear weapons. The memories of Hiroshima and Nagasaki have been indelibly etched on the Japanese psyche. Ever since returning to power, Abe has focused on reviving the Japanese economy and making his country a military power to be reckoned with in the region. Japan, an all weather political ally of the United States is a key component of the Obama administration’s “military pivot” to East Asia. After the NDA government came back to power, India has further tilted towards Washington and Tokyo in the ongoing moves to militarily encircle and try to stop the emergence of a “rising” China as a next superpower.

The nuclear deal with Japan will further strengthen the Washington-Delhi-Tokyo axis. Another important reason why Abe was keen to expedite the nuclear deal with India was because it would provide a lifeline for the floundering nuclear industry in Japan that has been reeling from the twin effects of the Fukushima disaster and global recession. Very few countries in the world, for various reasons, ranging from the economic to ecological, are now going in for nuclear power. In Japan itself, plans for the construction of more than a dozen nuclear reactors were canceled after the meltdowns in the Fukushima-Daichi nuclear plant in 2011. Big Japanese conglomerates like Hitachi and Toshiba were adversely affected by the slowdown in the business.

Among the few countries that are still keen to buy nuclear reactors, despite the high cost and risks involved, are Asian ones like India, Pakistan and Vietnam. Vietnam is said to be on the verge of canceling an order it had placed with Japan to construct a nuclear reactor. India, it seems is the only country really left, that was willing to spend big bucks on nuclear reactors. India plans to build 20 nuclear reactors within the next decade. India has already signed agreements with the US and France for the constructions of nuclear reactors. The United States is expected to build ten nuclear reactors in India in the coming years. But none of the projects have got off the ground due to the unlimited liability law in case of nuclear accident that the previous UPA government had to adopt. Under the law, foreign nuclear vendors are liable to pay billions of dollars in compensation in case of nuclear accidents, like the disaster that happened in Fukushima.  Russia and France, though remaining opposed to the liability law, plan to go ahead with the construction of new nuclear reactors in India.

China and South Korea, meanwhile have been bagging lucrative contracts to build nuclear reactors in a few countries. They have the necessary expertise to build nuclear reactors and they do it at a much cheaper cost. The Japan-India nuclear deal is important for the American companies involved in nuclear industry like Westinghouse, which has won a contract to build six nuclear reactors in India. Westinghouse was purchased by Toshiba in 2006. The Japan India nuclear deal was necessary for Westinghouse to start work on the construction of nuclear reactors in India.

Westinghouse has made little profit since its takeover by the Japanese firm. Toshiba had to incur big financial losses after it acquired the American company, because of a paucity of orders to build nuclear reactors. Areva, the French Company which has bagged a contract to build nuclear reactors in India also sources components from Toshiba. Revenues from the nuclear industry have virtually dried up in the last decade. Now with India announcing grandiose plans for sourcing most of its energy needs from nuclear power, happy days could be back again for Japanese owned companies like Toshiba, Westinghouse and GE-Hitachi.    

The Abe government went ahead and signed the nuclear deal with India despite opposition from important sections of Japanese civil society. It was after all, the first nuclear deal Japan has signed with a non-NPT signatory. The deal was inked just a couple of days after India's defense minister, Manohar Parrikar, publicly said that India's pledge of “no first use” of nuclear weapons was not a sacrosanct one. To clinch the nuclear deal with Japan India had to sign a separate “Note on Views and Understanding” along with the nuclear agreement. In the Note, the Indian government had to reiterate the commitment made by the previous UPA government that India will adhere to its “no first use” nuclear policy.

Article 14 of the India-Japan nuclear deal allows Tokyo to unilaterally suspend the deal if there is any change in India's stated nuclear doctrine. In the nuclear agreements with the US, Russia and France, New Delhi had not given such commitments in writing. According to Indian officials, this was done keeping in mind the strong anti-nuclear lobby in the Japanese parliament. In reality, the termination clause in the agreement is only cosmetic dressing as no company will like to jeopardise their massive investments and profits on the grounds of principles and ethics. Indian external affairs ministry officials are now saying that the “Note” that was signed along with the main Nuclear Agreement, is not “legally binding”.

Many newspapers in Japan published articles and editorials arguing against the signing of a nuclear deal with countries that have refused to sign the NPT and has a huge stockpile of nuclear weapons. Prime Minister Abe had to assure the Japanese public that his government has the right to revoke the nuclear agreement if India conducts another nuclear test. “The agreement is a legal framework to ensure that India acts responsibly for the peaceful use of nuclear energy. It will also lead us to having India participate practically in the international non proliferation regime”, Abe said at a press conference he addressed with the Indian prime minister, Narendra Modi by his side, after the signing of the nuclear deal. Japanese officials have said that the Indian government has agreed that Japan has the right to scrap the agreement if New Delhi resumes nuclear testing. The tough posturing of the Abe government is meant to mollify Japanese public opinion.

Many in Japan are in fact suspicious of their prime minister's stance on global nuclear disarmament. Japan itself is under America's nuclear umbrella. Donald Trump, the American president had mused publicly that Japan and South Korea should be allowed to develop their own nuclear weapons to confront the so-called nuclear and missile threat from North Korea. If Trump actually goes ahead and removes the American military from the region, a nuclear arms race could in fact turn into reality.  Japan and South Korea has enough nuclear fissile materials to weaponise at short notice. Abe anyway is determined to rewrite Japan's pacifist constitution that will once again allow Tokyo to openly flex its already powerful military muscles.

India supported the Japanese position on the South China Sea dispute. In the joint statement issued after talks between the Indian prime minister and his Japanese counterpart in Tokyo, the two sides implicitly criticised China, harping on “the critical importance of the sea lanes of communications in the South China Sea for regional energy security and trade”. The two prime ministers called upon all states to “avoid unilateral actions that could lead to tensions in the region”. China has insisted that there never was a threat posed to freedom of navigation in the South China Sea and that it was a bogey first brought up by Washington. The Chinese have said that the maritime disputes can easily be settled between the countries involved in the dispute and not by outside interference. Beijing's point of view seems to be claiming more adherents in the region. The Philippines and Malaysia, which till recently were with America and Japan on the dispute, now seem to have changed course and have preferred dialogue with Beijing to resolve long pending issues.

India, under Modi, however has toughened its stance against China on a host of international issues despite both countries being part of the BRICS grouping. The Japanese side seems to be more cautious in its approach to China. The Japanese foreign ministry spokesperson speaking to the media during the Indian prime minister’s visit, said that Japan-India cooperation is not targeted at a third country and specifically stated that China was an “important stakeholder” for both the countries.

The Chinese side is however far from reassured as it watches the growing bonhomie between Tokyo and Delhi. Military to military cooperation between the two countries is getting closer. Japan has been included in the annual “Malabar” military exercises India holds with the United States. The three countries also hold an annual trilateral dialogue. It is not known whether Japan's failure to clinch the deal to sell its amphibious Shinmaywa US-2 aircraft to India was in any way connected to the China factor. It is well known that the Indian Navy was keen to acquire the planes and the Japanese had agreed to sell them at bargain basement prices. There are reports that the Japanese side however only offered to supply the unarmed version of the plane and was also reluctant for the transfer of technology to India. India wanted the aircraft for dual use, both for rescue as well as combat operations.