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Renewed India-US Nuclear Cooperation: Strategic Gains and Diplomatic Implications
Context:
The recent commitment by India and the United States to “fully realise” the US-India 123 Civil Nuclear Agreement marks a renewed push to overcome past hurdles and leverage the Indo-US nuclear deal two decades after its inception.
Key Gains for India
- Large-Scale Localisation and Technology Transfer
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- One of the most significant takeaways from the renewed cooperation is the potential for large-scale localisation of American-designed nuclear reactors in India.
- The agreement paves the way for American firms to build reactors in India with a substantial portion of components manufactured domestically.
- It enhances India’s capabilities in nuclear reactor construction and fuels the growth of a robust indigenous nuclear supply chain.
- Local manufacturing of key reactor components will reduce costs and create employment opportunities in India’s high-tech industries.
- Upgrading Reactor Specialisation
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- India’s civil nuclear program has primarily relied on Pressurised Heavy Water Reactors (PHWRs) that use natural uranium and heavy water. However, the global nuclear industry predominantly employs Pressurised Water Reactors (PWRs), making India’s technology somewhat outdated.
- The Indo-US nuclear collaboration provides India an opportunity to transition to PWR technology, which is more efficient and widely accepted internationally.
- Leveraging private sector expertise, particularly in the domain of Small Modular Reactors (SMRs), allows India to modernise its reactor technology and enhance its competitiveness in the global nuclear energy market.
- Strategic Positioning in the Global SMR Market
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- Small Modular Reactors (SMRs) are emerging as a key technological advancement in nuclear energy. Unlike large reactors, SMRs offer flexible deployment options, particularly in remote areas and industrial applications.
- India’s Department of Atomic Energy is exploring collaborations with Holtec International, a major American nuclear technology firm, for developing SMRs.
- Holtec’s SMR-300, an advanced modular reactor, could be deployed at existing coal plant sites in India, aiding in the transition from fossil fuels to nuclear power.
- Given China’s aggressive push in the SMR domain as part of its diplomatic outreach in the Global South, a joint Indo-US SMR initiative positions India as a credible alternative in emerging markets.
Challenges and Roadblocks
- Legislative Hurdles: India’s Civil Liability for Nuclear Damage Act (2010) has been a significant impediment for foreign nuclear firms investing in India due to concerns over liability in case of accidents.
- Project Financing and Cost Competitiveness: Nuclear projects require substantial capital investment, and ensuring cost competitiveness with renewable energy sources remains a challenge.
- Public Perception and Environmental Concerns: Nuclear energy projects often face resistance from environmental groups and local communities due to concerns about safety and radioactive waste disposal.
Broader Geopolitical Context
The renewed push for nuclear cooperation comes at a time when global energy security is a key concern. Several geopolitical factors add strategic weight to this agreement:
- US-India Strategic Partnership: This cooperation strengthens the broader Indo-US strategic partnership, which includes collaborations in defence, critical minerals, and emerging technologies.
- Countering China’s Nuclear Diplomacy: China has been aggressively pushing its nuclear reactor exports, particularly in Africa, the Middle East, and Southeast Asia. An Indo-US collaboration in this domain can offer an alternative to countries looking for non-Chinese nuclear solutions.
- Energy Security and Clean Energy Transition: With India’s growing energy needs and its commitment to achieving net-zero emissions by 2070, expanding nuclear energy is critical for reducing reliance on fossil fuels and meeting climate targets.
