18 The Indian EXPRESS
NORTH AMERICAN Newsline
‘I did not exult when India became a nuclear
power as I feared an arms race with Pakistan’
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
N O R T H
Dr. Shan Nair with his 2008 Outstanding 50 Asian Americans
in Business Award at The Waldorf-Astoria in New York.
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?
A M E R I C A N E D I T I O N
JUNE 27, 2008
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.