With billions of dollars from contracts to be earned from India’s ambitious nuclear power projects, Japanese government has started intra-governmental negotiations to decide whether it should ink a civilian atomic pact with New Delhi, which is yet to sign the NPT.

Major U.S. and French nuclear power companies are keen that Japan should conclude an agreement with India so that they can use Japanese technology for an Indian reactor project they are seeking to win, Japanese government sources said.

Intra-governmental negotiations are under way in Japan to decide whether to start negotiations with India over an agreement to cooperate in the field of civilian nuclear power, Kyodo news agency quoted Japanese government officials as saying.

The transfer of Japanese technology to India for civilian use requires a nuclear pact, but Tokyo has so far declined to conclude one as New Delhi has not signed the Nuclear Nonproliferation Treaty (NPT), the report said.

Japan - which suffered U.S. atom bomb attacks on Hiroshima and Nagasaki at the end of World War II - maintains an official policy of not possessing or producing nuclear weapons, and not allowing them on its territory. The nuclear issue is sensitive in Japan, which campaigns for a nuclear-weapons-free world.

While the Ministry of Economy, Trade and Industry is pushing for the nuclear treaty, Foreign Ministry officials are studying the terms under which India can effectively contribute to nuclear arms reduction as a prerequisite for concluding the accord, it quoted sources as saying.

For the Indian project, the major U.S. and French nuclear companies, including Areva SA of France, want to use reactor vessels made by Japan Steel Works Ltd., which commands some 80 per cent of the global market for the equipment, it said.

The companies plan to work out a system for the supply of related equipment for the Indian project after Japan determines its stance on the issue, the report said.

The government needs to decide whether to launch negotiations with India “by autumn or by the end of this year at the latest” to let Japanese companies participate in the project, a METI source said.

When METI minister Masayuki Naoshima visited India in late April, the two governments set up a joint working group to discuss nuclear policies and safety standards to pave the way for a future bilateral nuclear pact, according to a senior ministry official.

A possible nuclear pact between Japan and India may adversely affect the international nuclear non-proliferation framework at a time when Pakistan, which is also a non-member of the NPT, is moving to import Chinese nuclear power-generation technology, the report said.

With an increasing number of countries inclined toward cooperating with India in the field of nuclear power, “I wonder if it is meaningful for Japan to say something different” from them, Foreign Minister Katsuya Okada said during a recent interview with Kyodo News.

“We will have to make a rather tough decision,” he added.

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