Print Friendly, PDF & Email

Insights into Editorial: The big deal with Japan



Insights into Editorial: The big deal with Japan




The annual strategic dialogue between India and Japan which began in 2009 has now come to fruition with the signing the nuclear cooperation agreement in Tokyo during Prime Minister Narendra Modi’s visit.

  • Japan has civil nuclear treaties with 13 countries, including the US, France and Russia, but this is the first with a nation that is not part of the Nuclear Nonproliferation Treaty (NPT).



India and Japan were at loggerheads since 1998 when India conducted its nuclear tests. Japan was the country that took it the hardest. It put all political exchanges with India on hold, froze aid and announced economic sanctions within hours. A thaw in ties didn’t come until 2001, when sanctions were lifted. And then, in 2009, the two countries began an annual strategic dialogue.


Why both countries took so much time to sign this deal?

The deal had been proposed six years ago and till very recently, it seemed that the process would not be concluded.

  • The two prime ministers had signed a memorandum of understanding last December but the thorny issues of Japanese companies’ liability for nuclear accidents, the reprocessing of spent nuclear fuel, and the consequences of any future testing of nuclear weapons by India, remained on the table.
  • The last stage of negotiations on the deal was keenly watched due to a “nullification clause”, which sought automatic cancellation of the agreement if India resorts to nuclear testing in the future.
  • Another sticking point has been India’s refusal to sign the NPT, as it considers the treaty unfair to the developing world.


What’s there in the new deal?

  • Nullification clause issue was resolved by annexing a separate memorandum to the treaty which specifies that Japan can suspend cooperation if India breaches its no-testing pledge to the NSG.
  • India conceded to Japan on another clause which says that Japan can notify India of the termination of the pact with one year’s notice.


Why this deal was important for India?

  • Apart from the Russian reactors, India’s planned nuclear reactors with France and US also depend on Japanese parts. Moreover, GE, Westinghouse, and Areva, the companies planning reactors in India, have important ownership stakes of Japanese companies such as Hitachi, Toshiba and Mitsubishi, which were stopped by the Japanese government from doing business with India without a final nuclear deal. This deal will help guarantee Japan’s continued support to India’s civil nuclear programme for generation of clean and cheap power.
  • Reservations in Japan against nuclear energy have hardened after the Fukushima accident. Tokyo’s support to the deal so far is therefore an indication of the importance it accords to relations with India.
  • The agreement is also important for the message of trust it would convey to Nuclear Suppliers Group members in a year the country hopes to have its admission accepted. It gives a much-needed moral boost.
  • The move will also boost the meagre, and dipping, bilateral trade of $15 billion, and lift the strategic military and defence relationship.


What’s in it for Japan?

This deal will mainly help Japan for economical reasons as companies like Mitsubishi and Hitachi are also in the nuclear energy field, and they are running in loss ever since the Fukushima disaster. These companies are frantically looking for new markets to expand in and there could be no better place than energy starved India. Japan had initially opposed the Indo-US Nuclear deal, as India wasn’t a member of NSG but later changed its position after realizing that its going to be the sole loser in the lucrative Indian market.


Why few countries are opposing this deal?

They say, signing a nuclear trade deal with a country that has shunned the treaty designed to stop the spread of nuclear weapons is itself a big mistake. Besides, the agreement contains many questionable and worrisome elements. For instance, the pact doesn’t make it clear whether India has to immediately shut down reactors using Japanese technology when it carries out a nuclear test.  


Way ahead:

Now,, Japanese Prime Minister must bring the deal to Parliament in early 2017 to ensure that the commercial agreement for Westinghouse’s six reactors in Andhra Pradesh that is due in June 2017 comes through. This will also coincide with the next plenary of the NSG. Both New Delhi and Tokyo must also be wary of the impact on Beijing of this new stage in their ties.

China has been hedging against deeper Japan-India ties in Asia by investing in its relationship with Russia and Pakistan. As the two Asian rivals to China, India and Japan might need the partnership even more in the days to come, as the U.S. President-elect has indicated a lower level of interest in “playing policeman” in the region.



Japan now follows eight other nations, including the US, France and Russia, in entering into a pact with India. It signals a wider acceptance of India’s status as a responsible actor. Overall, given the economic, nonproliferation, and regional power balance issues examined above, it is clear that full-fledged Japan-India civil nuclear cooperation is fundamentally a development to be welcomed. The question remains regarding whether India is likely to conduct further testing of nuclear weapons and how such tests would impact the bilateral agreement.