The Indian Express: Dr. Shan Nair on the Indo-US Nuclear Agreement
1
NORTH AMERICAN EDITION NORTH AMERICAN Newsline JUNE 27, 2008 18 The Indian EXPRESS DR SHAN (SHANKAR) NAIR, co-founder of Nair & Co is an Oxford University trained PhD nuclear physicist and Charter Member of TiE-Boston with a background in high-technology, software and accounting. Nair was recently named as one of the 50 Outstanding Asian Americans in Business for 2008, an award presented by the Asian American Business Development Center. Nair, who has lived in 13 countries in South East Asia, Eu- rope and the Middle East, started his career as a research scientist in the UK nuclear industry and helped develop a code which set that country’s standard for calculating waste from spent nuclear fuel. He was one of the two UK technical experts assisting the Eu- ropean Commission on its post-accident risk assessment of the Chernobyl nuclear disaster. Once the UK power generation industry was privatized in the early 1990s, he retrained as an accountant within the industry and left to found Nair & Co with his wife, Vyoma, in 1994. The entrepreneur is also responsible for the overall develop- ment of the group’s policies, strategies and goals. He has driven the company's strong focus on using IT to leverage business ad- vantage. Nair & Co which specializes in corporate tax compliance in over 40 countries, today has its headquarters in UK and offices in USA, China, Japan and India and acts for nearly 700 foreign op- erations in over 40 countries. In an interview with SUJEET RAJAN, Nair talks about why he was never in favor of the Indo-US civil nuclear deal, what India needs to do to address its energy concerns, and if the ‘death’ of the nuke deal could prove to be a deterrent in community efforts to bolster ties between the two countries. Excerpts: ❚ The Indo-US civil nuclear deal seems to be dead for now. You were not in favor of the deal from the beginning. Why? I am not in favor of the deal because it would have severely restricted India’s ability to produce fissile material for mili- tary purposes without imposing any similar constraints on Pakistan or China, both of whom are nuclear powers and with both of whom India has boundary disputes. Also the well-established democratic process in India will ensure that the nuclear know-how remains in secure hands unlike the case in Pakistan. ❚ For the US it is an important deal, financially at least, as companies here stand to get at least $50 billion in contracts in the long run, if it materializes. Is this a serious financial blow for the US, especially with the country in the throes of a tight economy and tough global competition? India is currently lacking in electricity generating infra- structure, which has failed to keep up with demand. A signifi- cant beefing up of this infrastructure is inevitable. There are plenty of opportunities for US companies to bid for work on conventional plants. It, therefore, seems unlikely to be a serious financial blow for the US economy taken as a whole since the lost nuclear orders could be made to translate into orders for non-nuclear generating capacity for US companies. ❚ How is India going to take care of its energy problems a cou- ple of decades down the road if a civil nuclear deal never ma- terializes? Is India doing enough to develop alternate energy resources? I believe the private sector should be enabled to fill this de- mand and indeed this is already happening in India. A nuclear power plant has an extremely high capital cost, has a high back end nuclear decommissioning and disposal cost spanning a very long time period and produces returns over decades of its operational life. By comparison, a conventional plant like a gas turbine plant has a much lower capital cost and produces re- turns for investors over a decade or so. It is therefore unlikely that the private sector in India would find it attractive to build nuclear power plants. The government's ability to step in and do this is in any case limited by its budget deficit. ❚ Disposing of nuclear waste is a contentious subject. In your earlier work as a scientist in the UK nuclear industry, you had helped develop a code which set the country’s standard for calculating waste from spent nuclear field. Later, you were one of two UK technical experts assisting the European Commis- sion on the post-Chernobyl accident response. What is your assessment of India’s readiness to dispose of nuclear waste on a larger scale? I believe India’s nuclear industry is not large and old enough and the high-level waste disposal problem not severe enough to have hit this problem in a major way as yet. Never- theless I feel sure that a policy must being evolved to deal with this problem although I am not privy to its details. The major is- sue is to ensure that the long-term radioactive wastes are held in a repository, which cannot affect groundwater. India has sufficient desert areas to enable it to take care of this problem itself when the time arises. ❚ Did you exult when India became a nuclear power? What were your ideals for the nation during your time at Oxford get- ting a PhD in nuclear physics? No, I did not exult when India became a nuclear power be- cause I feared this would result in an arms race with Pakistan. My own ideals were the hope that the nation would realize its true greatness and potential by shaking off the yoke of being an underdog, instilled in its psyche from the colonial era. I am very happy to see this ideal being accomplished today in a ma- jor way both individually by Indians here in the US and in Eu- rope as well as by India’s emergence as a major economic power in the world today. ❚ The Indian American lobby did a lot to push the civil nuclear deal through, apart from the efforts of the Indian government and embassy officials here. Do you see the failure of this ini- tiative, even though the lobby is not at fault, as a dampener on future bipartisan efforts by the community to enhance Indo- US relations? No, I do not see this as a dampener. We are about to have a new president in this country and there is a lot to play for. The US and India are both great democracies and our interests are converging. ❚ Is the Indian American lobby doing enough to promote busi- ness ties between the two countries? There are a lot of busi- ness organizations now and more and more American politi- cians and corporate honchos are doing the rounds of India to gauge business prospects and invite collaborations. How much of this is really translating to real business deals at the end of the day? I believe the Indian American lobby is doing an excep- tional job of promoting business ties between the US and India. While it is difficult to pin down specific results from specific initiatives, I believe the lobby's contribution to enabling deals to happen is significant. For example, the recent interest of foreign companies in setting up manufacturing operations in India to avoid all their eggs being in the China and Vietnam baskets is a development that the lobby is actively pursuing at present. This is an exciting new avenue for additional US and European investment into India. ❚ What are some of the areas that you think offer good prospects for India-US cooperation? Both countries are democracies and our business cultures are very compatible. We could cooperate further in scientific and technological R&D, increase our synergistic economic in- terdependence on each other as a two-way process between equals and at a political level act jointly to calm tensions in the world, particularly in the Middle East and South Asia. ❚ You decided to take up accounting after your stint as a nu- clear scientist, and set up Nair & Co in 1994. Now you run a company that specializes in corporate tax compliance. That seems a rather unusual move. I was getting into a rut as a nuclear scientist. I wanted to make a complete career change and get out of this rut. I be- lieve I have shown that a physicist can generally do anything he sets his mind to do! ❚ Do you miss being a nuclear scientist? No. I do not miss being a nuclear scientist although some- times I miss the excitement of doing basic research. The nu- merate skills gained in this role have been invaluable in spot- ting and analyzing business trends. ❚ Dr A.Q. Khan is again in the news. His nefarious activities in the past continue to confound nuclear experts and give rise to fear of a catastrophe. Did you ever get a chance to interact with him? No, I have never known him or indeed wish to meet him. The good news is that it is not easy for a rogue scientist on his own to create damage because the fissile materials needed are hard to get hold of even if you know how to mis- use them. The main risk is of rogue countries with govern- ments not accountable to their people getting access to this technology and materials. ❚ Let me turn back to business. Your company does corporate tax compliance work in more than 40 countries. How do you rate India in that area? India has a well-established regulatory system and a legal system that works and is fair, albeit slower than one would like. It is at the same level as all of Europe and the US. ❚ The Indian government has touted liberalization and trans- parency as two of their mantras for doing business in the country. Are Indian companies really up there with the top lot when it comes to transparency? I believe they are up there with the top lot and some Indian companies such as Reliance, Tata and Infosys are standard set- ters. I am also excited to see a crop of new entrepreneurial In- dian start-up companies emerging in the international arena. ❚ What are some of the areas where Indian companies need to improve upon in tax regulations and rules? I do understand the need for the Indian government to raise more tax revenue to reduce the budget deficit. However, too aggressive an approach by the regulators can kill the goose that lays the golden eggs. I believe reducing corporate taxes may actually increase the tax take. Also increasing the speed of processing regulatory applications to, say, Hong Kong and Singapore levels of response could make the environment much more business friendly and encourage more inward in- vestment into India. These are just some areas that could be actioned quickly. ❚ Your father was a diplomat and you have lived in 13 coun- tries. You have now spent considerable time in the West, but have ties to Kerala from where you are originally from. Would you consider moving back to India given the economic strides the country is making? If not, why? Yes, I would consider moving back to India in the right business circumstances. However, the cost of property in India today is an inhibitor. ‘I did not exult when India became a nuclear power as I feared an arms race with Pakistan’ Dr. Shan Nair with his 2008 Outstanding 50 Asian Americans in Business Award at The Waldorf-Astoria in New York.
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Transcript of The Indian Express: Dr. Shan Nair on the Indo-US Nuclear Agreement
N O R T H A M E R I C A N E D I T I O N
NORTH AMERICAN Newsline JUNE 27, 2008
18 The Indian EXPRESS
DR SHAN (SHANKAR) NAIR, co-founder of Nair & Co is anOxford University trained PhD nuclear physicist and CharterMember of TiE-Boston with a background in high-technology,software and accounting. Nair was recently named as one of the 50Outstanding Asian Americans in Business for 2008, an awardpresented by the Asian American Business Development Center.
Nair, who has lived in 13 countries in South East Asia, Eu-rope and the Middle East, started his career as a research scientistin the UK nuclear industry and helped develop a code which setthat country’s standard for calculating waste from spent nuclearfuel. He was one of the two UK technical experts assisting the Eu-ropean Commission on its post-accident risk assessment of theChernobyl nuclear disaster.
Once the UK power generation industry was privatized in theearly 1990s, he retrained as an accountant within the industryand left to found Nair & Co with his wife, Vyoma, in 1994.
The entrepreneur is also responsible for the overall develop-ment of the group’s policies, strategies and goals. He has driventhe company's strong focus on using IT to leverage business ad-vantage.
Nair & Co which specializes in corporate tax compliance inover 40 countries, today has its headquarters in UK and offices inUSA, China, Japan and India and acts for nearly 700 foreign op-erations in over 40 countries.
In an interview with SUJEET RAJAN, Nair talks about why hewas never in favor of the Indo-US civil nuclear deal, what Indianeeds to do to address its energy concerns, and if the ‘death’ of thenuke deal could prove to be a deterrent in community efforts tobolster ties between the two countries. Excerpts:
❚ The Indo-US civil nuclear deal seems to be dead for now. Youwere not in favor of the deal from the beginning. Why?
I am not in favor of the deal because it would have severelyrestricted India’s ability to produce fissile material for mili-tary purposes without imposing any similar constraints onPakistan or China, both of whom are nuclear powers and withboth of whom India has boundary disputes. Also the well-established democratic process in India will ensure thatthe nuclear know-how remains in secure hands unlike thecase in Pakistan.
❚ For the US it is an important deal, financially at least, ascompanies here stand to get at least $50 billion in contracts inthe long run, if it materializes. Is this a serious financial blowfor the US, especially with the country in the throes of a tighteconomy and tough global competition?
India is currently lacking in electricity generating infra-structure, which has failed to keep up with demand. A signifi-cant beefing up of this infrastructure is inevitable. There are plenty of opportunities for US companies to bid forwork on conventional plants. It, therefore, seems unlikely to be a serious financial blow for the US economy taken as awhole since the lost nuclear orders could be made to translate into orders for non-nuclear generating capacity forUS companies.
❚ How is India going to take care of its energy problems a cou-ple of decades down the road if a civil nuclear deal never ma-terializes? Is India doing enough to develop alternate energyresources?
I believe the private sector should be enabled to fill this de-mand and indeed this is already happening in India. A nuclearpower plant has an extremely high capital cost, has a high backend nuclear decommissioning and disposal cost spanning avery long time period and produces returns over decades of itsoperational life. By comparison, a conventional plant like a gasturbine plant has a much lower capital cost and produces re-turns for investors over a decade or so. It is therefore unlikelythat the private sector in India would find it attractive to buildnuclear power plants. The government's ability to step in anddo this is in any case limited by its budget deficit.
❚ Disposing of nuclear waste is a contentious subject. In yourearlier work as a scientist in the UK nuclear industry, you hadhelped develop a code which set the country’s standard forcalculating waste from spent nuclear field. Later, you were oneof two UK technical experts assisting the European Commis-sion on the post-Chernobyl accident response. What is yourassessment of India’s readiness to dispose of nuclear waste ona larger scale?
I believe India’s nuclear industry is not large and oldenough and the high-level waste disposal problem not severeenough to have hit this problem in a major way as yet. Never-theless I feel sure that a policy must being evolved to deal with
this problem although I am not privy to its details. The major is-sue is to ensure that the long-term radioactive wastes are heldin a repository, which cannot affect groundwater. India hassufficient desert areas to enable it to take care of this problemitself when the time arises.
❚ Did you exult when India became a nuclear power? Whatwere your ideals for the nation during your time at Oxford get-ting a PhD in nuclear physics?
No, I did not exult when India became a nuclear power be-cause I feared this would result in an arms race with Pakistan.My own ideals were the hope that the nation would realize itstrue greatness and potential by shaking off the yoke of beingan underdog, instilled in its psyche from the colonial era. I amvery happy to see this ideal being accomplished today in a ma-jor way both individually by Indians here in the US and in Eu-rope as well as by India’s emergence as a major economicpower in the world today.
❚ The Indian American lobby did a lot to push the civil nucleardeal through, apart from the efforts of the Indian governmentand embassy officials here. Do you see the failure of this ini-tiative, even though the lobby is not at fault, as a dampener onfuture bipartisan efforts by the community to enhance Indo-US relations?
No, I do not see this as a dampener. We are about to have anew president in this country and there is a lot to play for. TheUS and India are both great democracies and our interests areconverging.
❚ Is the Indian American lobby doing enough to promote busi-ness ties between the two countries? There are a lot of busi-ness organizations now and more and more American politi-cians and corporate honchos are doing the rounds of India togauge business prospects and invite collaborations. Howmuch of this is really translating to real business deals at theend of the day?
I believe the Indian American lobby is doing an excep-tional job of promoting business ties between the US and India.While it is difficult to pin down specific results from specificinitiatives, I believe the lobby's contribution to enabling dealsto happen is significant. For example, the recent interest offoreign companies in setting up manufacturing operations inIndia to avoid all their eggs being in the China and Vietnambaskets is a development that the lobby is actively pursuing atpresent. This is an exciting new avenue for additional US andEuropean investment into India.
❚ What are some of the areas that you think offer goodprospects for India-US cooperation?
Both countries are democracies and our business culturesare very compatible. We could cooperate further in scientificand technological R&D, increase our synergistic economic in-terdependence on each other as a two-way process betweenequals and at a political level act jointly to calm tensions in theworld, particularly in the Middle East and South Asia.
❚ You decided to take up accounting after your stint as a nu-clear scientist, and set up Nair & Co in 1994. Now you run acompany that specializes in corporate tax compliance. Thatseems a rather unusual move.
I was getting into a rut as a nuclear scientist. I wanted tomake a complete career change and get out of this rut. I be-lieve I have shown that a physicist can generally do anythinghe sets his mind to do!
❚ Do you miss being a nuclear scientist?No. I do not miss being a nuclear scientist although some-
times I miss the excitement of doing basic research. The nu-merate skills gained in this role have been invaluable in spot-ting and analyzing business trends.
❚ Dr A.Q. Khan is again in the news. His nefarious activities inthe past continue to confound nuclear experts and give rise tofear of a catastrophe. Did you ever get a chance to interactwith him?
No, I have never known him or indeed wish to meet him.The good news is that it is not easy for a rogue scientist onhis own to create damage because the fissile materialsneeded are hard to get hold of even if you know how to mis-use them. The main risk is of rogue countries with govern-ments not accountable to their people getting access to thistechnology and materials.
❚ Let me turn back to business. Your company does corporatetax compliance work in more than 40 countries. How do yourate India in that area?
India has a well-established regulatory system and a legalsystem that works and is fair, albeit slower than one would like.It is at the same level as all of Europe and the US.
❚ The Indian government has touted liberalization and trans-parency as two of their mantras for doing business in thecountry. Are Indian companies really up there with the top lotwhen it comes to transparency?
I believe they are up there with the top lot and some Indiancompanies such as Reliance, Tata and Infosys are standard set-ters. I am also excited to see a crop of new entrepreneurial In-dian start-up companies emerging in the international arena.
❚ What are some of the areas where Indian companies need toimprove upon in tax regulations and rules?
I do understand the need for the Indian government toraise more tax revenue to reduce the budget deficit. However,too aggressive an approach by the regulators can kill the goosethat lays the golden eggs. I believe reducing corporate taxesmay actually increase the tax take. Also increasing the speedof processing regulatory applications to, say, Hong Kong andSingapore levels of response could make the environmentmuch more business friendly and encourage more inward in-vestment into India. These are just some areas that could beactioned quickly.
❚ Your father was a diplomat and you have lived in 13 coun-tries. You have now spent considerable time in the West, buthave ties to Kerala from where you are originally from. Wouldyou consider moving back to India given the economic stridesthe country is making? If not, why?
Yes, I would consider moving back to India in the rightbusiness circumstances. However, the cost of property in Indiatoday is an inhibitor.
‘I did not exult when India became a nuclear power as I feared an arms race with Pakistan’
Dr. Shan Nair with his 2008 Outstanding 50 Asian Americansin Business Award at The Waldorf-Astoria in New York.
