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Within days of the NSG waiver, close to 40 Indian companies in the private and public sectors announced their plans to participate in India’s nuclear power dreams.
Given the fact that private companies in India are not yet allowed to build nuclear power plants, immediate beneficiaries of the NSG waiver would be public sector companies like the Nuclear Power Corporation of India Ltd. – the country’s only nuclear power generation company – and equipment suppliers like National Thermal Power Corporation, Bharat Heavy Electricals Ltd. and Larsen & Toubro Ltd. However, that could change soon, industry sources predict.
“With the civil nuclear power agreement becoming a reality, 40 domestic companies have already started negotiations with their foreign counterparts for nuclear power generation,” said Venugopal Dhoot, former president of the Associated Chambers of Commerce and Industry of India, a local industry lobby.
The current restrictions on the private sector’s participation may be removed soon, said Dhoot. “Power is one of the most crucial infrastructural needs for India and a huge business opportunity as well, that requires maximum focus and investments,” he said. “We have already sent our representatives to the government requesting amendments to current legislation and we hope that the entry of private sector firms in the generation of nuclear power would be facilitated soon.”
For India – which last Saturday powered its way into the global nuclear community after the NSG rewrote its guidelines for resuming nuclear trade with New Delhi – the waiver is a big deal. This is not only because it opened up an estimated US$50 billion market in nuclear commerce in India, but also because India is the only nuclear country to be part of the global nuclear trade without having signed the Nuclear Non-Proliferation Treaty or the Comprehensive Test Ban Treaty, which is still a precondition for countries entering mainstream nuclear trade.
India's entry into the 45-nation Nuclear Suppliers Group is likely to help the country become a major hub for manufacturing of nuclear components and reactors, since domestic engineering companies are expected to strike global alliances to serve the global nuclear market.
“The NSG waiver is a major confidence-building move for the international community to engage in trade with India,” says Chandrajit Banerjee, director of the industry lobby the Confederation of Indian Industry. “It will provide an opportunity to Indian manufacturers to supply spares and components to the global manufacturers of nuclear power plants.”
This deal is also the first step towards realizing India’s plans of adding a 20,000-megawatt capacity by 2020, a plan stalled for years due to the global ban on the supply of nuclear fuel imposed on India, says government-owned NPCIL.
Admittedly, India faces formidable challenges in meeting the energy needs for its scorching economy that is growing between seven and eight percent each year. The country’s planning commission says that to sustain this economic growth, India needs at the very least 800,000 megawatts of power by 2030, from the current capacity of around 160,000 megawatts, inclusive of all captive plants.
According to the Planning Commission, the more important issue is that, “The demand for nuclear energy is met through safe, clean and convenient forms of energy at the least cost in a technically efficient, economically viable and environmentally sustainable manner.”
However, despite attaining nuclear capabilities since the mid-1950s, when India built its first nuclear reactor to develop nuclear energy for peaceful activities, the country has been able to achieve little in terms of nuclear energy. For instance, its 17 nuclear power units have a total installed capacity of merely 4,120 megawatts in operation. Presently, another 3,160 megawatts of generating plants are in various stages of construction at Rawatbhata station in the state of Rajasthan and at Kaiga and Koodankulam in the state of Tamil Nadu.
One of the main reasons for India’s slow growth of nuclear power generation plants is that, between 1974 and 1998, it changed tracks several times to utilize its nuclear capabilities to develop nuclear arms. While it emerged as one of the world's six nuclear powers, this also resulted in a ban on the transfer of technology.
In 1998, when India tested a nuclear bomb, it resulted in international trade sanctions by the United States, starving India's nuclear reactors of uranium and its scientific institutes of super-fast computers and other equipment. Critics say that although India did manage to develop indigenous nuclear-power generation capability, much of that is technologically weak and commercially unviable.
But more than technology, it is the lack of fuel that made India's indigenous nuclear power program almost a nonentity until now. According to NPCIL, all its nuclear power plants operate at 50 percent or less capacity, due to shortage of fuel.
"Therefore, the NSG waiver would not only help India achieve its nuclear power targets but is also likely to add another 40,000 megawatts of power in the next 15 years,” said Dhoot.
Nevertheless, the nuclear deal is also big for NSG countries, including the United States. After all, following the Three Mile Island accident in 1979 – the most significant in the history of American commercial nuclear power generation – the U.S. government has not approved a single nuclear reactor, although American companies have been building reactors in other countries.
According to David Bohigian, assistant secretary for market access and compliance in the U.S. Department of Commerce, the civilian nuclear opportunities in India are immense and “U.S. firms certainly wanted to be part of that.”
Reports mention that nuclear powerhouses such as General Electric, Westinghouse, USEC and Rosatom have begun talks for the manufacturing and supply of nuclear power equipment with private local companies like BHEL, L&T and Tata Power, while also initiating parallel negotiations with the NPCIL.
Meanwhile, France’s Areva and Russia’s Atomenergoproekt and Atomstroyexport have already jumped ahead in line. While the two Russian companies are helping NPCIL for building its nuclear reactor in Kudankulam, France's Areva is negotiating with state-owned National Thermal Power Corporation to kick-start nuclear power generation plans.
Industry sources say countries like Japan, Germany, Switzerland, the United Kingdom, Australia and many others, including China despite its objections at the NSG meeting, could gain from the waiver.
However, the benefits actually extend much beyond the nuclear power sector. India stands to gain access to a wide range of dual-use goods and technologies, which were barred until now by the NSG embargo imposed in 1979. Dual-use is a term often used in politics and diplomacy to refer to technology that can be used for both peaceful and military aims. In the current context, it usually refers to the proliferation of nuclear weapons.
Almost all of the 45 NSG countries have an exhaustive dual-use list that include a wide range of products from titanium and its alloys to chemicals, advanced lasers, computers and flight control equipment. Manufacturers and suppliers of these items are prohibited from selling them to countries that have not signed the Non-Proliferation Treaty.
The NSG waiver would impact Indian manufacturing, commercial research and development and commercial scientific programs sooner than nuclear power, says ASSOCHAM, because India can now import many of the otherwise banned dual-use items and technologies, including software.
Meanwhile, the last hurdle of approval from the U.S. Congress still remains for the Indo-U.S. nuclear deal to materialize, although experts believe that should not be a problem.
There is bipartisan support for the deal in the U.S. Congress, which would help see it through by the end of the month, said U.S. Ambassador to India David Mulford in a statement to the press. “I am optimistic and confident that the bipartisan majorities that we saw at the time of the votes are still intact. I think you could see that in the statements that Mr. John McCain and Mr. Barack Obama both made, so that would seem to still be a situation where the majorities are intact.”
