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Australia-India uranium deal

The civilian nuclear deal India had entered into with the US during Bush Junior’s presidency undoubtedly opened the doors for India-Australia uranium business. Hitherto, Abbott’s predecessors’ saw India through the NPT prism and blocked the sale of uranium since India is not a signatory to treaty.

Australia has agreed to export uranium ore to India marking the visit of Prime Minister Tony Abbott to New Delhi. This is another significant stride in India’s quest for N-energy while cementing the economic and trade ties between the two countries. 

The civilian nuclear deal India had entered into with the US during Bush Junior’s presidency undoubtedly opened the doors for India-Australia uranium business. Hitherto, Abbott’s predecessors’ saw India through the NPT prism and blocked the sale of uranium since India is not a signatory to the Nuclear Non-Proliferation Treaty (NPT). Even now India has not taken kindly to NPT saying it is discriminatory. 

Abbot has justified his decision by showering praise on India’s non-proliferation record. “India has an absolutely impeccable non-proliferation record. India has been a model international citizen. India threatens no one”, he declared, as his host, Prime Minister Narendra Modi sported a broad smile. Abbot is the first foreign dignitary to come to Delhi after Modi returned from his historic first visit to Tokyo where he had forged a “special, strategic global partnership”   with Prime Minister Shinzo Abe.

Under the uranium deal, India is committed to using Australian uranium ore for civilian purposes—to fuel its 21 power reactors. Seven more are under construction as India plans to more than double its nuclear power generation capacity by 2032. 

For Australia, the deal offers a badly needed opening to push up uranium sales since the prices of uranium ore have nosedived following the 2011 Fukushima nuclear disaster and the shutdown of Japan’s nuclear power reactors. Australia, which  accounts for about one third of the world’s known uranium reserves, is pinning hopes on India and China for a surge in its uranium exports  from $A630 million in 2013–14 to about $A1.1 billion in 2019.     

Like all such deals, the India-Australian deal has not happened over night. It took months and months of back channel talks and repositioning within the Australian government.   In early 2008, for instance, the then Labour Prime Minister Kevin Rudd reversed plans by the previous Liberal-National Coalition government to sell uranium to India. His regime, nevertheless, forged a strategic partnership with India in 2009. New Delhi was not overtly enthusiastic about it in the absence of U-sales.  

Rudd’s ousting in an inner-party coup in 2010 changed the course of the events in a manner of speaking. Julia Gillard, who succeeded Rudd, dropped his foreign policy reservations vis-a-vis the United States and its China policy. Her government also signed an agreement to host US Marines in Darwin. And opened the door for closer military collaboration, particularly naval cooperation in the Indian Ocean. Australia and India are planning to hold their first joint naval exercise next year. The US, India and Japan are also planning trilateral naval exercises.

Gillard also announced her government’s intention to sell uranium to India and pushed to lift the Labour Party’s ban on the sale. This decision had set in motion five rounds of negotiations that culminated in Abbot –Modi deal. 

For India, as Indian Prime Minister Modi said, the uranium deal is a historic milestone in its ties with Australia. It also reflects, a Modi himself said, “a new level of understanding, mutual trust and confidence” in bilateral ties. Abbott shared Modi’s assessment. The agreement, he said is “an important sign of mutual trust” and described India as “the world’s emerging democratic superpower”. 

Modi and Abbott announced plans to increase security cooperation. In another sign of closer ties, Modi will stay in Australia after November’s G20 Summit in Brisbane for a long overdue bilateral visit -the first by an Indian prime minister since 1986.

There is more than uranium to India-Australia trade. Trade between the two countries has tripled over the past decade to $A15.2 billion last year, amid surging Indian demand for Australian coal and other commodities. India is Australia’s fifth largest export market and tenth largest overall trading partner. Abbott’s visit was therefore aimed at expanding trade and investment with India.

So no surprise, therefore, Abbott was accompanied by Trade Minister Andrew Robb and 30 Australian CEOs. He told his Indian interlocutors that he wanted to conclude a comprehensive economic partnership by the end of 2016. Robb is due to return to Delhi in three months with a 300-strong delegation to stage the Australian Business Week in India to secure “real commercial outcomes.”
 
– By Ram Singh Kalchuri 

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