Round The World

New Delhi, 9 September 2014

Civil Nuke Handshake

INDIA, AUSTRALIA COME CLOSER

By Ashok B Sharma

It is the geo-political theatre in Indo-Pacific region that prompts both Australia and Japan to have closer relationship with India. Taking advantage of this gravitational pull from both the countries, India struck the uranium deal with Australia and extracted a promise for $35 billion investment from Japan in a span of five years plus ODA loan of 50 billion yen.

Civil nuclear energy deal and the sale of yellow cake, uranium matters much to an energy starved country like India. Australia will now be a long-term uranium supplier to India. Australia will also cooperate in production of radio isotopes and nuclear safety. Before signing of the accord Abbott had stated: “In a sign of the mutual trust and confidence that our two countries have in each other, Prime Minister Modi and I will today sign a nuclear cooperation agreement that will, finally, allow Australian uranium sales to India.”  

The civil nuclear deal, which was initiated by the former Australian Prime Minister Howard, fructified after five rounds of intense negotiation and finally signed during the recent visit of the Australian Prime Minister Tony Abbott to New Delhi.

India has low deposits of uranium and therefore it needs a long-term supply of uranium for its nuclear power plants. During Prime Minister Modi’s 5-day visit to Japan an agreement for cooperation in peaceful uses of nuclear energy could not be signed as the negotiations had not reached a level of finalisation. The negotiations are at an advanced stage and are expected to be finalised soon as Japanese Prime Minister Shinzo Abe indicated.

One such indication of the accord being signed in the near future is Japan removing six of India’s space and defence-related entities from its foreign end user list.  Abe has also commended India’s efforts in the fields of non-proliferation including the affirmation that goods and technologies transferred from Japan would not be used for delivery system for WMD. Similarly the negotiations for production and technology transfer of US-2 amphibian aircraft is also at an advanced stage.

Both Abe and Abbott are supportive of India’s full membership of four international export control regimes – Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Agreement and Australia Group.

Nuclear apartheid on India ended after the India-US Civil Nuclear Agreement in July 18, 2005 and subsequently India separating its defence and civil nuclear establishments. India’s first nuclear reactor was set up in Rajasthan with Canadian assistance. After India conducted first nuclear test in 1974 and the second in 1998, the world powers withheld civil nuclear cooperation with India and asserted that that the country should sign Nuclear Non-Proliferation Treaty. India termed the treaty as discriminatory and unequal between parties.

India has signed bilateral deals on civilian nuclear energy technology cooperation with several other countries, including France, the United States, the United Kingdom, Canada and South Korea. India has also uranium supply agreements with Russia, Mongolia, Kazakhstan, Argentina and Namibia. An Indian private company won a uranium exploration contract in Niger.

India as an emerging economy has become a valuable partner in Indo-Pacific region. Abbott hailed Modi’s Japan visit and said: “I acknowledge India’s Look East Policy and I also acknowledge Prime Minister Modi’s very successful visit to Japan.” He never missed to stress the importance of the geopolitical theatre saying “So as economic weight shifts to the Indo-Pacific region, the strategic balance moves too.”

While coming closer to India, Abbott has not underplayed the importance of China, a country with which Australia has $150 billion two-way trade. Australia spent three decades promoting trade with China and has recently “re-discovered India’s economic potential.”

At present the two-way trade between India and Australia is only $15 billion and Indian investment in Australia is about $11 billion, whereas Australian investment in India is only $600 million. In resource rich Australia leading Indian investors such as Sterlite Industries and Aditya Birla group are in copper mines while Asian Paints and Reliance are in uranium exploration.

Australia has massive reserves of uranium, gold, copper, zinc among other minerals and its coal feeds power plants in India.  In fact, Australian coal, iron ore and gas has powered the economic transformations of Japan, Korea and China. With a view to double the bilateral trade India and Australia are eager to conclude the negotiations on Comprehensive Economic Cooperation Agreement (CECA) by 2016.

According to Abbott “Australia will not and should not neglect the economic gains to be made in North Asia; but we should not and must not purse these at the expense of the mutual economic benefits to be had here in South Asia, especially as India’s GDP grows strongly.”

Australia is reluctant to join the India-Japan–US Trilateral with a view not to displease China. But Abbott has agreed for a first bilateral naval exercise with India scheduled in 2015. Both the countries will join together in the commemoration of 100 years of the First World War in which soldiers of both nations fought side by side.

There is a 450,000-strong Indian community in Australia and 36,000 Indian students are pursuing their study in that country, particularly in vocational education. Abbott during his visit launched the New Colombo Plan, which would facilitate Australian students to pursue their studies in India. New Delhi and Canberra has also agreed on vocational education and training. A MoU signed between the two countries for cooperation in sports will promote exchange programmes, sharing of experiences, particularly so in cricket which is of interest to both the countries. Renewal of MoU for cooperation in water management will help much in Prime Minister Modi’s dream project of cleaning river Ganga. 

India-Australia cooperation is expected to get a further boost when Prime Minister Modi makes a scheduled return visit to Australia. He will be the first Indian Prime Minister to do so after over two decades i.e. since 1986. Clearly, the handshake is set to be more firm.---INFA

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