Uranium Could Take India Relationship beyond the Three ‘C’s


In an announcement on 15 November 2011, Prime Minister Julia Gillard proposed changes to Australia’s position on uranium exports to India. Despite attempts in the later stages of the Howard Government, India’s status as a non-signatory to the Nuclear Proliferation Treaty (NPT) has precluded the South Asian power from purchasing Australian uranium. The proposed changes have the potential to re-balance and strengthen nascent, and occasionally strained, ties with India. Australia-India ties have long been based on the three “Cs”: cricket, curry and Commonwealth. Uranium, however, could provide a more nuanced dimension of diplomacy, leading to greater economic and security symmetries.

Australia boasts a strategic share of the international uranium market, as the third-largest uranium exporter and with close to 40 per cent of the world’s low-cost reserves. Australia’s status is likely to be bolstered in the coming decades, as advanced projects including Olympic Dam, Lake Maitland, Lake Way and Yeelirrie come on-line.

Simultaneously, India is projected to enter an energyintensive growth phase. Structural changes to the Indian economy will provide a catalyst for rapid urbanisation and industrialisation, further increasing demand on the already strained energy market. Currently, India’s energy mix is carbon-intensive, relying on fossil fuels for some 90 per cent of the country’s energy mix. Recognising emission considerations and concerns over the long-term political situation in supplier states in the Middle East and Central Asia, India has committed to a platform based on nuclear power.

An additional five nuclear plants, currently under construction, will double India’s nuclear power capacity, providing a nuclear electricity supply comparable to Japan and South Korea. Although the 2011 discovery of large uranium deposits in the state of Andhra Pradesh provided cause for optimism in India over uranium supplies, the nation remains energy poor and dependent on uranium-exporting states.

In response to uranium limitations, and within its constraints as a non-signatory to the NPT, India has developed bilateral deals to ensure security of supply. Since 2008, waivers provided by states within the Nuclear Supply Group have allowed India to access civilian nuclear technology and uranium supply arrangements from various states, including the United Kingdom, the United States and Russia.

While founded on noble notions, based on preventing the proliferation of nuclear weapons during the Cold War, the government’s current uranium policy vis-à-vis India fails to reflect twenty-first century realities.

India is projected to have a population of over one-and-ahalf billion people by 2050. Increased emissions, shortages in supplies of fossil fuels, and current limitations on renewable energy, dictate that nuclear power represents the only viable energy option, particularly in meeting demands for greater access to electricity for India’s poor. Fears over increased nuclear proliferation from India’s nuclear programme have failed to materialise. India has proven to be a responsible stakeholder in the nuclear domain and has abided by obligations from the NPT, even as a non-signatory.

Issues remain, however, and must be negotiated over the long-term. Protests by villagers in the southern state of Tamil Nadu, supported by the newly-elected government, over the construction of Koodankulam Nuclear Power Plant, demonstrate the controversial nature of India’s energy policy in a post-Fukushima environment. In the international context, India has failed to sign the Comprehensive Test Ban Treaty and the International Atomic Agency Safeguards Agreement, prompting enduring concerns over the country’s programme.

While the economic benefits of uranium exports to India are clearly evident, the Australian Government should use uranium as part of a broader platform with which to engage India. Australia and India share a number of strategic concerns in the Indian Ocean region, including trade, military and transnational challenges. Uranium may provide the impetus for greater synergies, including a free-trade agreement and closer defence relations.

Within this context, Australia could potentially be in a better position to advance its own strategic objectives, including proliferation issues. Ironically, for Australia to continue as an international campaigner against the spread of nuclear weapons, it is essential to engage one of the key non-signatories of the treaty. Failure to do so may result in Australia’s isolation from the nuclear dialogue, with potentially long-term security and economic consequences.



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