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 because two major US firms in the business, 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 the commercial considerations of the Japanese and American businesses.
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.