India and Japan Sign Civil Nuclear Energy Pact

On Friday, November 11, Prime Ministers Modi and Shinzo Abe signed an agreement whereby Japanese nuclear companies will be allowed to sell their technology to India.

The deal, though limited to peaceful commercial use, is controversial because India has not ratified the Nuclear Non-Proliferation Treaty. It has raised concerns in Japan that India might use the technology to boost its nuclear weapons program. However, Prime Minister Shinzo Abe had told Prime Minister Modi at a meeting in New Delhi way back in December 2015, “We will discontinue cooperation should India conduct a nuclear test,” newspaper Asahi Shimbun had reported. Abe reaffirmed this statement.

Prime Ministers Abe and Modi

Bloomberg reports that India’s nuclear power market is estimated at $150 billion and the country aims to boost energy generated from atomic plants to a quarter of its the total by 2050 from about 3.5 percent now, according to the U.S. Department of Commerce.

Energy-hungry India wants to increase nuclear power generation to support its strong economic growth. The country has signed similar nuclear agreements with France, Russia, Britain and the United States. Modi said this pact is “a historic step in our engagement to build a clean energy partnership” that will help India “combat the challenge of climate change,” reports LA Times.

The New York Times says that this deal is timely for Japan’s nuclear power industry: With the domestic market moribund, Japanese companies had been pursuing deals abroad, but success was elusive. With 20 new reactors over the next decade or so, and as many as 55 more having been proposed, India does look a rare opportunity for trade, the publication said.

In addition to the nuclear agreement signed on Friday, Abe and Modi will explore plans to build new high-speed rail lines in India based on Japan’s Shinkansen bullet-train technology.



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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.


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