dna edit: Uranium supplies

The India-Australia civil nuclear deal that was signed on Friday in New Delhi is the most significant step taken by India in the wake of the 2006 India-US civil nuclear deal. The Australian deal provides access to uranium needed to run the civil nuclear reactors in the country. One of the main reasons for the India-US deal was to access uranium supplies. It was, of course, true that India needed the technological input to build state-of-art nuclear reactors as well. But the more important thing was access to uranium. Though India has uranium mines in Jharkhand and in Andhra Pradesh, they do not have sufficient reserves for the expanded civil nuclear programme in the country. The agreement has eased the supply constraint on uranium which has been choking the functioning of even the existing network of nuclear reactors.  

The Americans after the nuclear deal had facilitated for separate deals with the Nuclear Suppliers Group (NSG), a consortium of countries dealing mainly in uranium trade. The NSG had actually been formed in the wake of India’s first Peaceful Nuclear Explosion (PNE) in 1974, to barricade access to uranium sources. Australia has the largest reserves of uranium, and the deal will make it easier for India not only to run its existing nuclear reactors at full capacity, but to pursue vigorously the building of new nuclear reactors in collaboration with France and Russia, and with the US. Though the civil nuclear deal could not be signed with Japan during Prime Minister Narendra Modi’s visit to Japan at the beginning of this month, it will be worked out sooner than later. The Japanese too know of the potential of the nuclear power market in India.

The earlier Labour governments in Australia were not eager for a civil nuclear deal with India which would have facilitated access to uranium sources. Like Japan, Australians too have a certain kind of commitment to nuclear disarmament, though the policy is based on faulty logic. The coalition government of Liberal-National has expectedly adopted a more pragmatic stance on relations with India. Australia is also keen to step up its trade and business relations with India, and it is keen on the free trade agreement (FTA) or the Comprehensive Economic Cooperation Agreement (CECA). It is expected to be finalised by 2016. The trade figures are interesting in themselves. The trade volume reduced from US$15.43 billion in 2012-13 to US$12.12 billion 2013-14. While foreign direct investment (FDI) from Australia over the last 14 years has been an unimpressive US$600 million, India has invested over a US$1 billion in the last decade. It is not a surprise then that Australia is keen to strengthen economic ties with India which would reflect Australian strengths. 

It is then a changing world. For too long Australia has kept itself aloof from the rest of Asia, aligning itself with the West and perceiving itself to be the sole Western country in the East. But it is now keen to get integrated into the Asian sphere and the best way of doing it is to engage more deeply in the economies of the region. Australian firms are engaged in China but they would feel India to be an easier connect because of the English connection. There is no need to look for a separate strategic link, with a security dimension, between the two countries because there is nothing more strategic than economic ties. The civil nuclear deal is just a prelude. The Australians are aware of the untapped potential in bilateral relations.