- Apr 21, 2009
This seminar took place at the Brookings institution at the end of March 09. There's a transcript up on the Brookings website which I'm posting here. There's a lot of important information in there, and I suggest anyone having some interest in the implementation of the nuclear deal and it's associated strategic implications, have a look. Here's a few paragraphs I found interesting:
Also read the speech by George Perkovich, who goes into details about how India has managed to kill many birds with one stone with the nuclear deal, and going into the future, the nuclear deal has become one of the major foundations on which India can claim to be a first tier rather than a second or third tier great power.Swaminathan S Anklesaria Aiyar: Now the interesting thing has happened. There is now an explosion in world demand, it seems, for nuclear equipment. And suddenly, the demand for nuclear equipment is much more than can be handled by the existing capacity of companies in the U.S. -- or, for that matter, companies around the world. I went and talked to the Areva people last year, and they made the point that, you know, “India, you’re saying you want nuclear equipment, but we are fully (inaudible). We are unable to even manage our supply chain for the current plants in Normandy and Finland, let alone create new capacity for new guys outside.”
And so they said, “We will be extremely keen on setting up large-scale manufacturing facilities in India for making nuclear equipment. And the reason we want to do this is that we have already seen your capacities. India is potentially a very low-cost producer of this kind of equipment. So we would like to use the manufacturing capacity in India--not only for India’s own nuclear program, but for exporting to our various plants all around the world.”
Okay. That was Areva. Then there was a group of U.S. companies that came over and visited India. They said exactly the same thing. They too said, you know, there is a very, very serious problem in the supply chain right now, and a lot of new capacity has to be created. And we would like to make a lot of this in India, and we would like to see India used as a production hub for global supplies.
The biggest bottleneck, in fact, appears to be in what they call “giant forgings.” If you want really large new generation nuclear power plants, you require massive forgings. And for these massive forgings --there are only two plants in the whole world which have the capacity to produce it, one in France, one in Japan. Because of that, that is the area where Indian private sector companies are now focusing. Joint venture agreement has been signed between Bharat Forge, Areva and BHEL to manufacture giant forgings. A separate agreement has been signed with (inaudible), with Mitsubishi to produce those giant forgings, and the Jindals appear to be interested, too. So you have a large number of Indian companies getting into the production of these giant forgings, which are likely to be critical for the supply chain across the world.
Bharat Heavy Electricals, a government company, have had a monopoly in the production of large turbines. That’s ending. Now complete power plants are going to be made in the Indian private sector, (inaudible), Bharat Force just started up (inaudible). They’re going to start by making these large gold-based power plants, and then they’ll be upgraded into producing nuclear power plants. Tata, Reliance and others are interested. So, by 2020 or 2025, India could be a key part of the global supply chain for nuclear equipment.
This has major strategic implications. If India becomes a global hub for nuclear equipment production, it becomes largely sanctions proof. If, for instance, India at some point tests a nuclear thing, but already equipment supply is localized, you know it’s self-sufficient. You can’t be sanctioned. India would, of course, still require fuel imports perhaps. But by then, it will have stockpiled fuel, and it will have its own nuclear uranium mines by then in Niger, or Kazakhstan or somewhere else. And, of course, it’s going to finally develop its own mines in Andhra Pradesh and (inaudible).
If India is a global supplier, and there’s some sanctions against India, those sanctions would disrupt the global supply chain. So India would have considerable countervailing power in those circumstances. For practical purposes, India will become a B-5 member. And, of course, this will not happen for Pakistan. To that extent, it will change the power equation in South Asia quite dramatically.