After concluding the nuclear deal with Japan, the Modi government must review India’s atrocious nuclear liability regime.
It is a big deal. Owing to the controversy over the replacement of currency notes, though, it has almost slipped popular attention. India and Japan have concluded an agreement that allows Japanese vendors to compete in the India’s nuclear power market.
The deal holds potential for greater competition in the Indian market for nuclear reactors and technology. It also is a shot in the arm for Japan’s beleaguered nuclear power sector, and can help in attempts to rejuvenate the Japanese economy. That’s the economics of it.
Greater significance lies in what persuaded Japan to set aside its decades-old anti-nuclear, ‘anti-proliferation’ stance and conclude a deal with a non-signatory of the nuclear non-proliferation treaty (NPT). Shinzo Abe is finding greater political traction in making big changes to Japan’s traditional foreign policy in the light of an assertive China that is fast expanding its geopolitical footprint. Prime Minister Abe’s policies are by no means fully accepted in the Japanese polity, but he is likely to have his way. With Donald Trump having created unprecedented doubts as to the United States’ commitment to its treaty allies, realists in Tokyo are even more likely to desire closer relationships with potential non-treaty allies (better known as ‘strategic partners’).
To help get the deal through the Japanese Diet, Prime Minister Abe needs to reassure sceptics that Tokyo retains its anti-nuclear weapons positions. Hence, a note to the effect that Japan reserves the right to give a year’s notice and suspend nuclear commerce with India in the event of New Delhi conducting another nuclear test, was signed and exchanged following the formal nuclear agreement. The concession makes it easier to conclude the deal.
It is not unusual for Indian critics to complain that New Delhi conceded too much, based on a legalistic parsing of an international agreement and its associated notes. Such criticism is overstated. An agreement between two sovereign states depends to a overwhelming extent on the will of the parties to comply. If Japan seeks to renege, it can do so, no matter what is written and signed on paper. So legalities matter only to an extent. No sleep needs to be lost over the matter.
What policymakers and analysts in India should worry about is whether the atrocious law on nuclear liability is consistent with India’s energy, environmental and safety needs. At the moment it seems to restrict competition by keeping vendors from rule-of-law conscious countries out of the Indian market. Not only is the Indian power sector deprived of the possibility of newer and safer technologies, New Delhi (and its strategic partners) are unable to fully harvest the geopolitical rewards of nuclear deals. It makes little sense to sign nuclear deals with dozens of countries only to find that the liability clause is a show stopper.
All parties, including the BJP were complicit in enacting an unworkable nuclear liability law during the UPA government’s term. Now, the Modi government must undo the damage, confront the anti-nuclear lobbies and put in place a sensible nuclear liability regime.