Muddy policy hurdle faces India-US nuclear deal

NEW DELHI (Reuters) - The India-US civilian nuclear deal, already hit by procedural delays, may face a new
hurdle: the Japanese partners of top US nuclear firms may need to convince Tokyo and get approval to do
business in India.
Analysts say this could mean India and Japan may need to sign a nuclear deal first, adding to the multiple policy
and regulation hurdles that have already delayed commercial implementation of the India-US pact.
The Imagindia Institute, a New Delhi-based independent think-tank, says it was a significant worry that it may
be difficult for US firms Westinghouse and GE to do business in India unless Japan and India entered a nuclear
cooperation agreement.
Westinghouse is a subsidiary of Toshiba Corp, while GE has a strategic partnership with Hitachi to jointly
execute nuclear energy projects worldwide.
In case such required clearances are not forthcoming from Tokyo, the ability of GE and Westinghouse to
engage in Indias nuclear business may be severely handicapped, said Robinder Sachdev, Imagindias
president.
Already, the deal, which could unlock an estimated $27 billion nuclear market in India over the next 15 years, has
been bogged down by issues like accident liability protection for US firms and fuel reprocessing technology
transfer.
There also seems to be little clarity in India on what the actual policy requirements are.
It is true that if there is Japanese equity in a US company then the Japanese government can intervene, said an
Indian government official who spoke on condition of anonymity.
But also the fact is a US-registered company is governed by American laws.
Westinghouse said Japanese approvals would be needed for nuclear technology or equipment that uses
Japanese components.
The Westinghouse reactor that we plan to supply to India ... does not have any Japanese nuclear technology
content and therefore Westinghouse does not need Japanese government approvals, Meena Mutyala, a
Westinghouse vice-president, told Reuters.
Danny Roderick, senior vice-president for GEs nuclear plant projects, said the company was awaiting US
government licences: Subsequent technology transfer and export authorisations will be addressed as project
planning progresses in the future.
India and Japan held their third round of strategic talks this month to discuss possible areas of cooperation,
including civil nuclear energy, but it was not clear if they addressed the issue regarding American firms with
Japanese links.
Japan will have some say in any transfer or sale of (nuclear) technology, but I think the Americans have got an
implicit okay from them, strategic analyst Bharat Karnad said.
US nuclear firms lag in a competitive scramble with Russian and European firms whose governments guarantee
their liability.
They want India to sign a global pact on liability that limits the onus on private nuclear operators and suppliers in
case of an accident, and speed domestic legislation on the issue.
But Indias divergent politics may mean opposition to any dilution of liability for private firms in the nuclear trade.
The issue is sensitive in India where a gas leak in a Union Carbide factory killed about 3,800 people in 1984,
among the worlds worst industrial disasters.
Many more have died from gas-related illnesses, and many victims say they still have not been compensated.