Just as Japan’s Diet has ratified the civil nuclear agreement with New Delhi, India has decided to build 10 nuclear power reactors of indigenous design in what is the largest such construction decision in the world since the 2011 Fukushima nuclear disaster. India’s turn to a “fully home-grown initiative” reflects the continuing problems in implementing the 2005 Indo-US nuclear deal.

India, duped by its own hype over the nuclear deal, had announced plans to import Western reactors costing tens of billions of dollars. The Indian plans helped to motivate Toshiba to acquire Westinghouse – a takeover that ultimately proved a huge blunder, plunging Toshiba into a grave financial crisis.

Japan, a top nuclear-equipment supplier, signed a separate nuclear agreement with India only last year after other supplier-nations had already concluded such accords. The recent Japanese parliamentary approval removes a critical missing link in commercialising the Indo-US deal. It, however, has come when Westinghouse, GE Hitachi and Areva – which dominate the international reactor export business – are in a dire financial state, with their futures hanging in balance.

Having invested considerable political capital in the vaunted Indo-US deal, India today confronts an embarrassing situation: the nuclear power promise is fading globally before New Delhi has signed a single reactor contract as part of that deal. To save face, India, with one of the world’s oldest nuclear energy programmes, has embarked on a major expansion of domestically designed power reactors.

That the decision to construct 10 reactors of 700 megawatts capacity each is monumental is underscored by the fact that the total size of these units surpasses the current installed nuclear-generating capacity in the country. India has 22 nuclear power reactors in operation, with capacity of 6,780 MWe but producing 6,219 MWe. To be clear, the 10 reactors will be in addition to seven others already under construction, with a combined capacity of 5,300 MWe.

The 10-reactor decision fits well with India’s commitment under the Paris climate accord to reduce reliance on fossil fuels. The single-minded focus on carbon, however, threatens to exacerbate India’s water crisis, given the water-guzzling nature of the energy sector, especially nuclear power. Moreover, US President Donald Trump’s decision to exit the Paris accord has cast unflattering light on the onerous climate-related obligations India has taken on before it has provided electricity to all its citizens.

Given that the Indian nuclear plant construction time frame averages seven years, India’s decision to ramp up its nuclear power capacity may contribute little to meeting its goal of making 24-hour electricity available to all villages and towns by 2022. But the decision will yield major economic dividends, including boosting domestic industry and creating tens of thousands of jobs. By providing $11 billion worth of likely manufacturing orders to Indian industry, the decision will help to transform the domestic nuclear industry.

By contrast, had India relied primarily on imports of Western reactors to accelerate new capacity additions, the financial costs would have been considerably higher, without tangible benefits accruing to domestic industry. In fact, with India already a top weapons importer, reliance on Western reactors would have made it the world’s largest importer of nuclear power plants – a double whammy for Indian taxpayers, especially given that the country is the only major Asian economy that is import-dependent rather than export driven.

In this light, the travails of the Indo-US deal may be a blessing in disguise for India. But for the serious financial woes of Westinghouse, GE Hitachi and Areva – each of which was to build a cluster of reactors at a separate Indian park – Indian taxpayers would have been potentially saddled with plants like Areva’s reactor project in Finland, which is currently almost a decade behind schedule and billions of euros over budget. To be sure, a dispute with Western suppliers over nuclear accident liability also put a break on India’s reactor-import plans.

Nuclear power may be on a downward trajectory globally, yet it has earned a rightful place in India’s energy mix. The country’s domestic nuclear power industry, without technological assistance from overseas, has done a good job in beating the mean global plant-construction time frame and in producing electricity at a price that is the envy of Western reactor vendors.

For many in India’s governing elite, the nuclear deal with the US – despite the conditions quietly put into the American ratifying legislation – became the acme of their aspirations for the country. They believed the deal would turn the US into India’s enduring benefactor and catapult the country into the big-power league.

It has taken 12 years for Indian hype over the nuclear deal to give way to sober realism. A cost-benefit analysis has helped to lower India’s expectations from the deal. India may still buy some Western reactors, but the latest decision clearly signals that its focus will be on building its own reactors. By emphasising its reactor models, India is laying the base for its potential emergence as a reactor exporter. The inward turn reaffirms India’s embrace of a zero-carbon power source and underscores its faith in the likely advent of commercially attractive reactors based not on uranium – a resource it lacks – but on thorium, which it has in plenty.