Why is India pushing for the Nuclear Agreement with USA ?
Why is USA pushing for the Nuclear Agreement with India ?
despite there being sizeable opposition in both countries to this Deal
Let’s address the first question.
India,clearly needs significant additional Power Generation to sustain it’s GDP growth for the next few decades.In fact from the current US $ I Trillion economy ,if India grows at 7% to 8% CAGR it will cross US $ 4 Trillion in the next 20 years.Any higher rate of growth will see it becoming a US $ 6 Trillion economy in this period !
‘Powering India—the road to 2017’, a report by global consultancy firm McKinsey states that India will need $600 billion to meet electricity demand that may triple to 3,35,000 mw by 2017 and it will face a huge shortage of power if it does not act now.
India’s Hydel and Thermal Power Generation Capacities and those generated by Altrenative Sources like Wind and Solar would just not be enough to cope with an expected Power Demand
So what’s the opposition about ? ! Well for One it’s the way the UPA Government has gone about this whole process.Full Transperancy and Communication from Day One would have been a better idea.
A more compelling argument is that many believe that India will surrender some part of it’s sovereignty in that it will not be able to conduct further nuclear tests or it will risk facing stoppage of the supply of uranium which is the feed to the reactors.Australia,who holds 25% of the world’s uranium reserves, has already taken a U turn as the Labour Party has come into power and stated that it will not supply any uranium to India as India had not signed the 1970 Nuclear Non Proliferation Treaty.The risk is that if supplies do stop there is very little “corrective measures” (Draft IAEA Agreement) that India can take to keep the reactors in operation….The Reactors would at best serve as gigantic storage Bins…like the silos that store Wheat!…and they would have cost India over US $ 40 billion to build
The arguments on higher creation costs (Nuclear :Rs 6 crores/MW against Thermal :Rs 4 crores/MW) and safety issues (Chernobyl Disaster in 1986 in Ukraine was more due to lack of safegaurds prescribed by IAEA and the Three Mile Island Leakage was controlled by conventional means) are less compelling.
Now let’s tackle the second question as to why USA is pushing for this deal.
Clearly USA benefits two fold with this deal.