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Japan moves to mend nuke fences

New Delhi, July 6: Japan has removed from a list of banned entities several Indian companies and government institutions to pave the way for high-technology transfers, particularly in the defence sector.

The move assumes significance as the two countries are close to an agreement on peaceful uses of nuclear energy, following which Japanese companies can participate in India’s civil nuclear energy sector.

Some of the 11 companies removed from the list, called the end-users’ list, include the Defence Research and Development Organisation (DRDO), the Indian Space Research Organisation, PSU Rashtriya Chemicals and Fertilisers Ltd and private firm Godrej & Boyce.

Although the DRDO’s Aeronautical Research Development Establishment and three companies were added to the list recently, the external affairs ministry sees the overall reduction of Indian entities on the roster as a positive step.

The two countries’ top defence and foreign ministry bureaucrats met today for their first 2+2 dialogue — so called because it involves two ministeries from either side. Japan is the first country with which India has such annual consultations. The talks mechanism was instituted by the two Prime Ministers in December 2009 to advance defence cooperation. Japan only holds such 2+2 dialogues with close allies like the US and Australia.

During the consultations, India welcomed the decision to remove Indian companies from the end-users’ list. Apart from enabling transfer of high technology, the move will allow Japanese companies to bid for defence contracts in India, said sources in the external affairs ministry.

In foreign office-level consultations, also held today, the two sides said they were satisfied with the progress towards signing of the civil nuclear energy deal. The Japanese, the only people to have suffered a nuclear attack, in the Second World War II, had earlier been wary of such co-operation because of India’s refusal to sign the Nuclear Non-proliferation Treaty or the Comprehensive Test Ban Treaty.

Under pressure from its private sector, Tokyo recently amended regulations to allow Japanese companies — Hitachi, Toshiba and Mitsubishi Heavy Industries — to partner the US and French companies seeking to build nuclear power plants in India.

The relaxation will also help operationalise the Indo-US nuclear deal faster. Two of the biggest US companies that plan to build nuclear power plants in India — General Electric and Westinghouse Electric Co — are partly or wholly owned by Japanese companies.

New Delhi is also said to be close to a similar civil nuclear deal with South Korea. Another area where both the Japanese and the South Koreans want to strengthen co-operation with India is in anti-piracy operations in the Gulf of Aden.

The Japanese and South Koreans’ efforts at closer defence co-operation with India are also seen as part of their attempts to contain Chinese influence.

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