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Japan to start nuclear power talks with India

world Updated: Jun 25, 2010 19:34 IST

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Japan will start talks with India over a civil nuclear energy deal, Foreign Minister Katsuya Okada said on Friday, a move that would give Japanese firms access to the rapidly growing market amid rising global competition.

Firms from countries such as the United States, France and Russia have scrambled for a foothold in energy-starved India's civilian nuclear market, worth about $150 billion, after a 2008 U.S. nuclear accord opened up global access to it.

India, Asia's third-biggest economy, aims to double the share of nuclear power on its grid to more than 8 percent over two decades. Nuclear energy is also being touted as a way for the world's fourth-biggest emitter to curb fossil fuel emissions.

Major Japanese firms have partnered with companies abroad and engage in joint development for nuclear reactors, such as Hitachi Ltd's cooperation with General Electric and Mitsubishi Heavy Industries with France's Areva.

But Japanese companies currently cannot access the Indian market due to a lack of legal framework.

"There are projects that suppliers of other countries are involved in (in India) that require Japanese technologies. That is a point of consideration," Okada told a news conference.

A deal between Japan and India would allow Japan to conduct nuclear trade with India, the foreign ministry official said, adding that the United States and France have big expectations for a pact.

The 2008 civil nuclear accord between the United States and India ended the nuclear isolation India had experienced since its 1974 atomic test and gave it access to U.S. technology and fuel, while also opening up the global market to India.

Japan, the world's only country to suffer atomic attacks, had been cautious about negotiating a nuclear pact with India, which is not a signatory to the Nuclear Nonproliferation Treaty.

But Okada said Japan cannot go against the international trend, referring to a 2008 decision by a group of major nuclear suppliers to lift a ban on nuclear trade with India.

The first round of negotiations will be held in Tokyo on June 28-29. It is unclear how long it will be until an agreement is reached, an official at the ministry said.