HISTORIC NSG WAIVER TO INDIA TO GENERATE MORE THAN USD 70 BILLION BUSINESS TO GLOBAL SUPPLIERS OF EQUIPMENT/COMPONENTS TO NUCLEAR POWER AND RELATED SECTORS
The historic waiver to India by Nuclear Suppliers Group (NSG) which ends more than three decades of nuclear isolation for India, came after three days of intense diplomacy by the USA and India. The NSG rewrote its guidelines for resuming nuclear trade with India because India is the only nuclear country which will now be part of the global nuclear trade without having signed the Nuclear Non-Proliferation Treaty or the Comprehensive Test Ban Treaty, which is still a precondition for countries entering mainstream nuclear trade.
The Indian Government had finalized 123 Agreement with USA and the same has now been approved by the U.S. Congress and the final 123 Agreement has been entered into by India and USA.
India has also entered into an agreement for nuclear co-operation with France and the one with Russia is expected to be signed in December 2008.
The Indian planning commission has estimated that India needs at the very least 800,000 megawatts of power by 2030, from the current capacity of around 160,000 megawatts, inclusive of all captive plants. The NSG waiver is also the first step towards realizing India’s plans of adding a 20,000-megawatt capacity by 2020. At present, as per the Indian Government policy, private companies in India are not yet allowed to build nuclear power plants.
Presently, the Government owned Nuclear Power Corporation of India Limited (NPCIL) has set up 17 nuclear plants with an aggregate capacity of 4120 MW and 6 units are under construction which would add 3160 MW to the existing capacity. India 's nuclear power plants are estimated to be running at about only 50% of capacity. The country has been starved of sufficient nuclear fuel for the past 34 years and NSG waiver would enable NPCIL to raise capacity utilization to about 90%.
The entry of private sector into nuclear power generation requires amendment of current laws.
As per India 's Atomic Energy Act of 1962, only companies that are government-owned with over a 51% stake are allowed to enter the nuclear power sector. However, change in the Act and Government policy are expected very soon and sensing this, many private sector companies have announced ambitious plans for entering this sector. As per reports, General Electric, Westinghouse, USEC and Rosatom have begun talks for the manufacturing and supply of nuclear power equipment with local companies in India like BHEL, L&T, Tata Power and NPCIL. France’s Areva and Russia’s Atomenergoproekt and Atomstroyexport have already initiated discussions with several potential players in India. It is expected that the target of 20,000 MW of nuclear power could be doubled if most of the private sector players who have evinced active interest in setting up nuclear power plant go ahead with their plans. The global business that is expected to be generated on account of this in the next 10 to 12 years is expected to be US$ 50 billion.
However, the benefits of NSG waiver actually extend much beyond the nuclear power sector. India stands to gain access to a wide range of dual-use goods and technologies, which were barred until now by the NSG embargo imposed in 1979. The term “Dual-use” refers to technology that can be used for both peaceful and military aims. Almost all of the 45 NSG countries have an exhaustive dual-use list that include a wide range of products from titanium and its alloys to chemicals, advanced lasers, computers and flight control equipment. Manufacturers and suppliers of these items are prohibited from selling them to countries that have not signed the Non-Proliferation Treaty. The global business that is expected to be generated during the next 10 years on account of permission to sell “dual use equipment/technology” to India is over US$ 20 billion covering various industries like pharmaceuticals, aero space, defence, etc.
India's entry into the 45-nation Nuclear Suppliers Group is also likely to help the country become a major hub for manufacturing of nuclear components and reactors, since domestic engineering companies are expected to strike global alliances to serve the global nuclear market.
The NSG waiver is expected to create profound positive impact not only on international nuclear commerce but also on the Indian economy and enable its economy to sustain high levels of growth for atleast the next two to three decades. This is also expected to give further fillip to foreign and domestic investment in this sector.