Today I and my friend were discussing a possible impact of the Japanese Earthquake and Tsunami on Indian shores and market. Due to the blast in the nuclear reactor, Japan will be more cautious in the nuclear fuel and reactor treaty for India-US. Japanese companies are deeply entangled with US and French companies which have the expertise to build nuclear plant.
Due to the destruction of nuclear plants there would be change in the pattern of power production in Japan. Japan had 3 nuclear reactors on their land. Currently due to blast at one of the reactor, there would be huge impact on the power production at the island. Lot of demand will be on the crude oil and natural gas. So the world may observe a little hike in the prices of crude oil and gas in medium term. India will be impacted due to the increased prices of crude oil and gas.
Many of us may not be knowing that Japan is the biggest lender to the Asian Development Bank (ADB), Manila, Philippines and India is one of the biggest borrower from ADB. This year we may see a trend reversal and Japan may borrow some money from ADB for reconstruction and rehabilitation activity. So the proportion of loan which India may be seeing from ADB this year would be less. The proportion of investment by ADB in may see a decline for 2-3 years.
A good news may be for India would be the export of Steel and cement to Japan may rise for the reconstruction activity. It may result in mild rise of domestic prices of steel and cement but I suppose Government will take care of that.
With that I may rest my case. If you agree or disagree please use the comment section. If you think, there would be some more aftershocks, please share with others.
Bharat
Due to the destruction of nuclear plants there would be change in the pattern of power production in Japan. Japan had 3 nuclear reactors on their land. Currently due to blast at one of the reactor, there would be huge impact on the power production at the island. Lot of demand will be on the crude oil and natural gas. So the world may observe a little hike in the prices of crude oil and gas in medium term. India will be impacted due to the increased prices of crude oil and gas.
Many of us may not be knowing that Japan is the biggest lender to the Asian Development Bank (ADB), Manila, Philippines and India is one of the biggest borrower from ADB. This year we may see a trend reversal and Japan may borrow some money from ADB for reconstruction and rehabilitation activity. So the proportion of loan which India may be seeing from ADB this year would be less. The proportion of investment by ADB in may see a decline for 2-3 years.
A good news may be for India would be the export of Steel and cement to Japan may rise for the reconstruction activity. It may result in mild rise of domestic prices of steel and cement but I suppose Government will take care of that.
With that I may rest my case. If you agree or disagree please use the comment section. If you think, there would be some more aftershocks, please share with others.
Bharat
Hey Bharat nice initiative and nice thought.... Just a couple of things i wanted to share. As i understand there are 56 nuclear reactors in Japan. May be i am wrong, just double check. Also, one of the biggest repurcusion the world is rethinking about the use of nuclear energy.India too might have to reconsider its ambitious nuclear energy plan.
ReplyDeleteThanks for the comment rohan, According to Wikipedia, there are around 53 reactors in Japan providing 34.5% of the power. I think the demand of nuclear energy may be affected in short term, but in long term there may be no affect in demand. Even after Chernobyl, the demand for nuclear has only increased. But I think the terms, India is demanding will be agreed on like joint liability and others. Similar may be the case with Hydro electricity in case of dam breach.
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