New Delhi
22 August 2010
American companies will not be able to enter the multi-billion-dollar Indian
nuclear energy market even if Parliament hurriedly passes the nuclear liability Bill. That
is because two major US firms, General Electric and Westinghouse, are either partly or
wholly owned by Japanese companies. So the US-Japanese consortium of GE-Hitachi or
the Toshiba-owned Westinghouse will need to wait for Tokyo to conclude a bilateral
nuclear pact with New Delhi before they can begin supplying equipment or technology for
reactors in India.
Toshiba of Japan bought Westinghouse in 2006. In the US, the GE-Hitachi joint venture
is 60 per cent owned by GE and 40 per cent by Hitachi. In Japan, 80 per cent of the joint
venture is held by Toshiba and 20 per cent by GE. Incidentally, even the French state-
owned nuclear power group Areva -- which will set up at least two reactors in
Maharashtra -- has a tie-up with Mitsubishi of Japan.
In negotiating a nuclear pact with a non-NPT signatory such as India, the Japanese
government headed by Prime Minister Naoto Kan has the unenviable challenge of
balancing Tokyo's traditional philosophy of non-proliferation and disarmament, and
commercial considerations of the Japanese and American businesses alike.
In the next few months Indian and Japanese negotiating teams can be expected to
resume talks on drafting the terms of the agreement in a manner that best reflects
Japan's concerns about non-proliferation and disarmament but both sides have refrained
from setting a timeline for the conclusion of the discussions.
For Prime Minister Kan, the next few weeks are particularly crucial because his party,
Democratic Party of Japan (DPJ), will hold presidential elections on September 14.
Convention is whoever becomes DPJ president would also hold the post of prime
minister.
Katsuya Okada, the Japanese foreign minister, who concluded the fourth round of the
India-Japan strategic dialogue here Saturday, has proposed an economic dialogue which
he hopes will foster a climate of trade and investments and cushion the Japanese
government's dilemma of engaging in nuclear commerce with India by making an
exception for it.
The economic dialogue will involve Japan's ministry of economy, trade and industry
(METI) and other ministries, and it will be similar to the economic dialogue Japan has
with China.
Mr Okada also suggested that the economic dialogue involve industry representatives
from India and Japan in order to give a fillip to mutual investments in their respective
economies.
According to reports, promotion of exports and large-scale investments in emerging
markets such as India is a key strategic goal of METI's new "industrial structure vision"
strategy unveiled in June this year.
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