The Indo-Japanese agreement on civilian nuclear cooperation may not radically alter India’s energy scene or even amount to much for various reasons but it is nonetheless a vital part of a larger and more important relationship that could define the 21st century.

Prime Minister Narendra Modi has had a special relationship with Japan ever since his days as the chief minister of Gujarat. Today, in his latest visit, he brought to a successful conclusion an agreement for civilian nuclear cooperation between India and Japan. Negotiated over for six years, this agreement has been eagerly anticipated in many circles for what it represents rather than what it actually promises. Despite the pessimism in some corners, the treaty is an impressive achievement of which both Modi and Japanese Prime Minister Shinzo Abe can be proud.

According to media reports, the Indo-Japanese nuclear agreement will allow Tokyo to transfer nuclear fuel, equipment, and technology to Delhi for use in its energy programme. India retains a default right to reprocess spent fuel – under safeguards, of course – and may also enrich uranium fuel up to a concentration of 20 percent uranium-235. However, written permission from Tokyo will be required to exceed this limit beyond which the fuel becomes suitable for use in nuclear warheads. This is not an entirely unimaginable situation. Highly-enriched uranium allows for greater miniaturisation of nuclear reactors, a useful trait for nuclear propulsion, and with India preparing to embark on building a fleet of nuclear-powered submarines and aircraft carriers, less theoretical than it sounds at first. Furthermore, even the Nuclear Non-Proliferation Treaty – to which Japan is a signatory but India is not – recognises the right of states to pursue nuclear propulsion.

These permissions were a major sticking point for India during the negotiations, for they represented to Delhi an international recognition of its nuclear maturity. While India may be seen to have won this point with Japan, Modi had to concede to Abe the inclusion of a nullification clause into the treaty that India had objected to until now. The addition stipulates that Japan may suspend the nuclear agreement in the event of India conducting nuclear tests, even with its own resources. This was an important concession for Abe to have, whose domestic constituency has largely been against such deals with non-NPT members and nuclear energy in general.

It is hoped that the nuclear cooperation agreement will breathe new life into Japan’s flailing nuclear industry. With a hostile public environment domestically post the Fukushima incident and a tepid reaction to nuclear energy in the developed world, India remains one of the few countries that maintains aggressive plans for the expansion of nuclear power in its energy mix. These hopes may, however, be misplaced. Although India announced an ambitious target of 63 GW of nuclear energy capacity by 2032, up from about 4.8 GW then, not a single nuclear reactor has come online since the conclusion of the Indo-US nuclear deal in 2008 – Kudankulam was part of an earlier agreement with the Soviet Union in 1988 – that ended India’s four-decade status as a nuclear pariah since the 1974 test of a peaceful nuclear explosive at Pokhran. In fact, not even a single new nuclear project has been commissioned in the past eight years despite the country’s critical energy needs.

One reason for this is the suicidal civil nuclear liability law co-authored by Modi’s own party, the Bharatiya Janata Party. Designed to prevent the Congress from claiming a win with the Indo-US nuclear deal, it has now, some would say karmically, obstructed even the BJP's efforts to create a nuclear renaissance in the country. A second and often neglected reason is that nuclear energy has not been the priority of this government – neither the minister of state for atomic energy nor the prime minister's office has hauled up the sluggish bureaucrats at the Department of Atomic Energy for the slow pace of domestic development.

There is, to be sure, some room for optimism – the agreement with Japan will make the it easier for Western companies like Westinghouse and Areva who source several important components of their reactors from Japan. However, Tokyo still remains bound by the Nuclear Suppliers Group's trigger list of prohibited and dual-use items that will deny Delhi some of the most sought after technologies such as isostatic presses, lasers, and certain alloys. India's dependence on a global nuclear cartel will not be affected much and any latent Make-in-India ambitions will have to remain so.

Although India’s nuclear agreement with Japan does not bring it to the threshold of a clean energy renaissance, it is still important for several reasons. First, it must be noticed that Japan has made an exception for India in that it did not let the country’s non-NPT member status get in the way of the treaty

Nuclear cooperation is reserved for only between states with a high degree of trust between them and a compact that accepts such a fundamental aspect of the non-proliferation regime must be even more so. Second, Japan has dropped its demands that India takes meaningful steps towards the Comprehensive Test Ban Treaty and Fissile Material Cut-Off Treaty. While this may seem a small concession sitting in Delhi, treaties such as these have become almost a creed with the Japanese government as well as people. Abe's weltanschauung and presence at the helm are fortuitous for Modi.

An ambitious agenda for both leaders, at the appropriate time, would be to extend nuclear relations to their fast breeder reactor programmes and to initiate plutonium trade under safeguards. This holds immeasurable benefits to both countries but would require substantial politico-diplomatic effort, both domestically and internationally.

The dragon in the room, everyone pointedly ignoring, is China. Both Modi and Abe realise the threat their giant neighbour presents, especially with its newfound assertiveness, and have worked to develop the bonhomie between their two states into a strategic partnership. Modi has referred to Japan several times as a natural partner and indeed it is so. Tokyo's financial and technological strength complements India's need for both as well as the size and strategic geography. Japan has invested heavily in India’s growth, making exceptions for it in nuclear cooperation, amending its constitution to allow defence relations and assistance in high-end infrastructural development.

These common perceptions of the Asia-Pacific region will continue to fuel an Indo-Japanese entente, especially as both countries outgrow their passivity in response to their common neighbour. Japan's lack of interest in Pakistan and India’s indifference towards N Korea probably keeps both countries out of each other’s core circle but the confluence of visions is unmistakable. The Indo-Japanese agreement on civilian nuclear cooperation may not radically alter India’s energy scene or even amount to much for various reasons but it is nonetheless a vital part of a larger and more important relationship that could define the 21st century.