INDIA JOINS NUCLEAR CLUB, GETS (NSG) WAIVER

HBJ Capital Report....
[Publisher of "10in3" (Small Cap with 10 times in 3 years potential) Equity Research Report & "Street Smart" (Lots of Investment Ideas) Newsletter]

As many as 400 Indian and foreign firms are seen as the beneficiaries of the far-reaching verdict in Vienna on Saturday where the 45-member Nuclear Suppliers Group (NSG) decided to resume civilian nuclear commerce with India. India's apex industry bodies, which have hailed the decision, also feel that the country can now attract over $40 billion in foreign investment over the next 10-15 years as the result of private sector entry into India's nuclear power generation.

Today is an important day as we have achieved a major breakthrough after 34 years of isolation. The US and the rest of the world imposed economic sanctions when India first conducted its nuclear test in 1974.

The historic moment, which will end more than three decades of nuclear isolation for India, came after three days of intense diplomacy by the US and India in the nuclear cartel that controls the global flow of nuclear fuel and technologies. "Today's development is a major confidence-building move for the international community to engage with India especially in high technology trade".

The act and the decades of India's nuclear isolation had resulted in capping the country's nuclear power generation capacities to an extent of just 3,900 MWe in over 60 years of independence. As a result, out of a total installed generation capacity of about 145,000 MW of electricity, 70 is accounted for through thermal fuel and 20 percent by hydro, with nuclear energy contributing to just two percent. The remaining capacities come by tapping the various sources of non-conventional energy such as solar, wind, biomass and tidal waves.

At present nuclear power production in India accounts for only a measly 2% of the total generation of 120,000 MW. Large scale nuclear power production would also mean less dependence on traditional sources of non-renewable fuel such as coal,oil and petroleum. Abundant nuclear power production would obviously lead to a fall in fuel and electricity prices.

It especially holds relevance as a promising new alternative in the face of price rise and fall in oil output.

Following the NSG waiver, the India-US nuclear deal will head for the US Congress, which meets Sep 8 to discuss and approve the 123 India-US bilateral pact to seal the negotiations that were started more than three years ago.

The steps after NSG waiver...

- The US Congress is likely to take up the 123 India-US bilateral civil nuclear cooperation pact when it convenes on September 8. The Congress has to approve the pact by an up and down vote before the Congressional session ends on September 26.

- The Bush administration will ask Congress not to insist on the mandatory 30-day session period required to present a pact for its approval. As this will technically allow senators to move amendments, the Bush administration has to ensure that the Congress approves the text of the 123 pact without a re-look.

- The two countries are expected to formally sign the bilateral pact, likely when Manmohan Singh goes to Washington towards the end of September, the last step that will restore nuclear trade with the US after a gap of 34 years. - India will sign similar pacts soon with nuclear suppliers like Russia, France and others in its quest for energy security in the coming decades.

- HBJ Capital Team.