Events & Issues

New Delhi, 12 December 2011

Uranium Deal

WIN-WIN FOR AUSTRALIA, INDIA

Dr PK Vasudeva

By Col. (Dr.) P. K. Vasudeva (Retd)

Australia’s decision lift its ban on uranium sales to India is well considered as it will result in flowering of a closer strategic co-operation between the two nations. India is the sixth largest energy consumer in the world, accounting for 3.4 per cent of global energy consumption. The demand for energy has grown at an average of 3.6 per cent per annum over the past 30 years due to fast economic growth of country. The Government has set an ambitious target to add approximately 78,000 MW of installed generation capacity by 2012. The total demand for electricity in India is expected to cross 950,000 MW by 2030.

About 75 per cent of the electricity consumed in the country is generated by thermal power plants, 21 per cent by hydroelectric power plants and 4 per cent by nuclear power plants. The country has also invested heavily in recent years on renewable sources of energy such as wind and solar energy. As of 2008, India's installed wind power generation capacity stood at 9,655 MW. In July 2009, India unveiled a $19 billion plan to produce 20,000 MW of solar power by 2020. Additionally, India has committed massive amount of funds for the construction of various nuclear reactors, which would generate at least 30,000 MW.  

Thus, nuclear power is the fourth-largest source of electricity in India after thermal, hydroelectric and renewable sources of electricity. As of 2010, India has 20 nuclear reactors in operation in six nuclear power plants, generating 4,780 MW while five other plants are under construction and are expected to generate an additional 2,720 MW. India's nuclear power industry is undergoing rapid expansion with plans to increase nuclear power output to 64,000 MW by 2032.  

Following a waiver from the Nuclear Suppliers Group (NSG) in September 2008 which allowed it to commence international nuclear trade, India has signed nuclear deals with several other countries including France, United States, United Kingdom, Canada, Namibia, Mongolia, Argentina, Kazakhstan, and Russia (2000 tonnes of nuclear fuel) except Australia which had not agreed to sell its rich and low cost Uranium.   

India has one of the lowest per capita consumption of energy and the highest economic growth next to China. It has an urgent requirement for additional sources of ‘clean’ energy in order to develop without contributing overly to global warming in consonance with Australian mindset of reducing carbon emissions to save the planet.

Australia holds approximately 40 per cent of the world’s estimated low-cost uranium reserves at more than 50 known economic deposits and minor occurrences. Significantly sized deposits exist in the far north of the Northern Territory, northern and central Western Australia and northwestern Queensland and in central South Australia.  

An important obstacle in the way of India-Australia relations has been removed with Australia’s Prime Minister Julia Gillard indicating willingness to sell uranium to India. Delegates at the 46th national conference of the Labour in Sydney endorsed Gillard's plan to export uranium to India, with 206 of them voting in favour and 185 against. While moving a motion to change the party's policy on the issue, Gillard had stated that clearing the move would boost trade and enhance Australia's ties with India.

"We are at the right time in the history of the world to seize a new era of opportunity in this, the Asian century," she had elaborated. Importantly, she made it known that Australia needs to make sure that across its regions, Canberra has the strongest possible relationships it can, including with the world's largest democracy, India.

The landmark policy change came after a fiery debate, with Gillard, who was supported by Resources Minister Martin Ferguson, Defence Minister Stephen Smith and South Australian Premier Jay Weatherill, rightly justifying that it was not rational that Australia sells uranium to China but not to India.

This apart, the she set aside any apprehensions at home noting that that Australia could sell uranium to India without breaching its obligations under the NPT as any agreement in this regard would include strict safeguards to minimise proliferation risks. In an interview to an Australian paper, Gillard justified her decision on three counts. One, that it will be good for the Australian economy and for Australian jobs. Two,  it would be one way of taking a step forward in the country’s ties with India, which is the world’s largest democracy; a stable one and that Australia has worked on its links with it. Three, this change should take place as circumstances have developed in the international community. The US-India Civil Nuclear Agreement changed the strategy. It effectively lifted the de-facto international ban on cooperation with India in this area.  

However, an additional reason that was not spelt out but is worth noting is that Canberra’s change in heart towards New Delhi is that the Obama administration has been pursuing a closer partnership with India and considers Australia an integral part of its strategy. Undoubtedly, the US seems to have influenced Gillard's U-turn on uranium exports, as the Obama administration viewed the long-standing ban as a roadblock to greater engagement between Washington and New Delhi itself.

It is pertinent to mention here that the US has reconfigured its military commands so that the US Pacific Command embraces responsibility not only for the Pacific but also for India and the Indian Ocean. This is in line with sustained argument from Australian officials and ministers over many months urging the Americans to consider the Pacific and Indian Oceans as a single unified theatre of operations. Likewise, the Americans urged deeper engagement with India for Australia but for this ending the ban on uranium exports was critical.

But it hasn’t been easy for Gillard. Sections within her party as well as the Australian Greens continue to question India’s nuclear energy programme, which fortunately she has discounted by drawing attention to New Delhi’s exemplary record as a nuclear power.

The Australian ban on sales was seen in Delhi as a sign of Canberra’s distrust of Indian intentions. The shift in position will go some way in changing that perception at home. With mutual suspicions likely to come down soon, the two countries can focus on economic and maritime security co-operation, as they are key players in the emerging Asia-Pacific security architecture.

Importantly, the shot in the arm to India-Australia relations could result in a flowering of a closer strategic co-operation. It has in the past engaged in joint naval exercises with Australia. In 2007, there was some animated discussion over the formation of a ‘Quadrilateral of Democracies’ including India, Australia, Japan and the US. If this comes into play, it will held India to have both stronger economic and defence ties among these nations for economic growth and to safeguard the sovereignty and integrity of the country. –INFA

(Copyright, India News and Feature Alliance)