Casting a fresh nuclear deal : Important Topics for UPSC Exams

Casting a fresh nuclear deal : Important Topics for UPSC Exams

Why in News?

  • Around a decade has passed since the memoranda of understanding were signed, the India-U.S. civil nuclear deal remains defunct as there are no indicators yet of any solid contract between a US firm and the Indian authorities to create a reactor.

  • Westinghouse’s recent visit (in Feb 2018) to India in order to reopen negotiations to revive plans for the Kovvada nuclear project in Andhra Pradesh has been opposed by civil society groups from various countries.

Indo-US Nuclear deal

  • It is also known as the 123 Agreement or U.S.–India Civil Nuclear Agreement.

  • Joint statement (July 18, 2005) by then Indian PM Manmohan Singh and then U.S. President George W. Bush, under which India agreed to separate its civil and military nuclear facilities and to place all its civil nuclear facilities under International Atomic Energy Agency (IAEA) safeguards set the framework for this agreement, and in exchange, the United States agreed to work toward full civil nuclear cooperation with India

Status of Nuclear Reactors under India-US Civil Nuclear Agreement

  • In 2009, both GE-Hitachi and Toshiba-Westinghouse had begun talks on techno-commercial agreements for six reactors each in India, but GE-Hitachi’s plans were shelved after it rejected the Obama-Modi agreement in January 2015, saying GE would not accept the compromise formula on supplier liability. Although other firms have stipulated that they would accept the liability offer, but none has put that on writing.

  • Toshiba-Westinghouse then carried the baton to realise the India-U.S. civil nuclear deal, an agreement between Indian stakeholders and Westinghouse was supposed to have been reached by July 2017 but the company ran into major financial troubles in 2017 and after a near-bankruptcy, Toshiba sold Westinghouse for just $4.6 billion and this further resulted into multiple inordinate delays.

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Issues and Concerns

  • The deal was envisaged almost a decade ago and with shifts in global politics, renewable energy technology, the U.S.’s commitment to India, and the supplier’s capacity and ability, it would be ridiculous if India don’t renegotiate the deal as India’s own requirements from the India-U.S. civil nuclear deal have changed considerably.

  • The near bankruptcy financial crisis was set off because Westinghouse went into major cost overruns, in building four AP1000 reactors at two projects in the U.S., the same reactors as the ones meant for India.

  • Even if an India-U.S. techno-commercial agreement gets ready by 2019, and the work commences immediately, then also it may not see production of electricity until 2029.

  • Westinghouse has now stated that it will only provide components and reactors, and it won’t construct the plant while the original negotiation was that Westinghouse would set up the plant in its entirety.

  • Six 1,208 MW reactor units of its AP1000 design which Westinghouse wants to supply in India are untested and has run into regulatory issues, massive cost and time over-runs and serious safety questions in the US, UK, China and other countries. 

  • The fuel loading has been delayed at the world’s first Westinghouse-designed AP1000 nuclear reactor on China’s east coast has been delayed due to “safety concerns” and this project too has faced a long line of setbacks. 

  • In case of Indo-French negotiations for six 1,650 MW European Pressurised Reactors (EPRs) in Maharashtra’s Jaitapur, costs that India has to pay for nuclear energy emerged as another major issue, the Department of Atomic Energy in 2013 stated that the cost “cannot go above” ₹6.50 per unit, while the French company Areva wanted more.

New Opportunities for India

  • In May 2017, the Cabinet approved 7,000 MW construction plan for 10 Indian-made pressurised heavy water reactors (PHWRs) the cost of $11 billion. This approval will increase the Indian Nuclear capacity to 14,600 MW by 2024 from the current capacity of 6,780 MW.

  • There is a push for indigenous nuclear power plants, and the Department of Atomic Energy is also seeking for development of PHWRs (pressurised heavy water reactors) in more inland sites in Rajasthan, Madhya Pradesh, Haryana and Karnataka as there are apprehensions of disasters like Tsunami and Earthquake along the southern coastline, where the U.S. and French projects are.

  • India’s existing agreement with Russia’s Atomstroyexport, are much more comfortable since the Russian cooperation which began with the Intergovernmental Agreement for Kudankulam 1 and 2 in 1988, though the progress was slow, but it maintained steady pace in delivering reactors and operationalising power projects.

Protests from the locals

  • The communities around the village of Kovvada (Andhra Pradesh) where the negotiations for setting a nuclear plant by Westinghouse is running on, see Nuclear Power Plant as a threat to their environment, livelihood, health and traditional lifestyle. The plant was initially to be established in Gujarat, but due to the protest of local farmers for almost a decade the project was moved to Andhra Pradesh.

Response of the Govt

  • Both the Nuclear Power Corporation of India and the Department of Atomic Energy have maintained that the project meets adequate safety standards and that the technology being used is state of the art and stated that in case of emergency; the reactors in Kovvada Atomic Power Plant would shut down automatically without human intervention.

Impact of New US Administration under the Trump

  • Donald Trump’s presidency has taken a very sharp turn away from renewable energy as U.S. has decided to pull itself out of the Paris climate change accord. Thus, India may not get the support that the Obama administration had promised both in facilitating India-U.S. civil nuclear power deals and on financing renewable energy projects.

Issues with Nuclear Power

  • Most nuclear companies globally are analysing major losses over their nuclear businesses, and this factor should also be included into India’s nuclear negotiations.

  • More countries across the globe are considering Nuclear power to be kept as back-up for the, abundant, less costly and eco-friendly solar, hydroelectric, and renewable power options.

  • In 2016, global wind power output grew by 16%, solar by 30%, but nuclear energy only by 1.4%. Thus, it shows that Nuclear Energy is losing its dominion in the energy mix.

Due to advancements in other forms of energy production, the pressure to lower nuclear power tariffs increases, additionally nuclear safety requirements have become more stringent, putting intense strain on Nuclear Energy Sector thus shifts in the world nuclear industry must be studied closely before heading towards such negotiations.


Q. Which of the following statement is wrong about the Indo-US Civil Nuclear Deal?

A. It is also known as the 123 Agreement.

B. GE (General Electric) mentioned it would not accept the compromise formula on supplier liability which came in to realisation during Modi-Obama Agreement.

C. Around the village of Kovvada the negotiations for setting a nuclear plant by Westinghouse is running on under the premises of this agreement.

D. None of the above


Q. What is the present status of Indo-US Civil Nuclear Deal? Do you think the deal has still not lost its relevance?

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