Nuclear commerce with India

Australian Prime Minister Tony Abbott arrived in India on a two-day visit during which he is expected to sign a long-awaited uranium deal with the energy-starved nation and look at ways to deepen bilateral economic and strategic ties. The deal is set to be signed on Friday, September 5, when Abbott meets his Indian counterpart Narendra Modi in New Delhi.

PM Modi faces the challenging task of reforming the energy sector to address the country's chronic power shortages, with 300 million Indians still without access to electricity. Coal is still the main feedstock for power generation, but the government is seeking to shift the balance towards nuclear energy over the next few years.

Australia, which has 40 percent of the world's known uranium reserves, had previously refused to sell nuclear material to India because it had not signed the Nuclear Non-Proliferation Treaty (NPT). But the country lifted the long-standing ban on selling uranium in 2012, a decision that followed a landmark US agreement in 2008 to support India's civil nuclear program.

Rory Medcalf, an expert on Indo-Australian ties at the Sydney-based Lowy Institute for International Policy, says in a DW interview that the deal is likely to lead to the opening up of India's nuclear sector to international commerce and increase the pressure on New Delhi to raise standards and transparency. He adds that is impossible to imagine that global non-proliferation will be sustainable if such a vast country like India is permanently locked out of the rule-making system.

DW: What are the main aspects of the nuclear deal?

Rory Medcalf: My understanding is that this nuclear cooperation agreement would create a framework for safeguarding exports to India of Australian uranium for civil energy purposes some time in the future, assuming that commercial entities in both sides finding it worth their while and that various technical requirements are met. Australia has such agreements with many countries, including China and various European partners, but this is unique in that India has not signed the Nuclear Non-Proliferation Treaty.

This is also the reason why Canberra had previously refused to supply nuclear material to India. What made the Australian government change its position on the matter?

The nuclear saga between Australia and India has been long and complicated. The two countries, despite being Indian Ocean neighbors and democracies, were estranged by the Cold War. Australia used to not accept India's arguments about its right to possess nuclear weapons even though it lived in a dangerous neighborhood and had fought wars with two countries, China and Pakistan, now both nuclear-armed.

Australia, like many other countries, has come to accept that the world cannot have a sustainable nuclear non-proliferation and security order in the 21st century without one of the potentially three largest economies, India, being permanently excluded from mainstream nuclear commerce and rule-making diplomacy. India, for its part, had seen Australia's earlier uranium ban as discrimination, and sometimes linked it to false and outdated perceptions of Australia as a Western country that discriminated against India on cultural or even racial grounds.

So why did India turn to Australia for this deal and not to Japan or the US?

The India-Australia deal is part of a wider global shift towards normal nuclear commerce with India. Until 2008, when the US and India finalized their own nuclear deal, most of the world treated India as a pariah on nuclear issues, even though it had a record as a responsible nuclear-armed state and there were good reasons to treat India as part of the global non-proliferation solution rather than part of the problem.

The US-India deal changed the dynamic fundamentally, and one by one the forty-plus nuclear exporting countries in the world - members of the so-called Nuclear Suppliers Group - came to support this change. Australia and Japan were among them. Japan is exploring its own nuclear deal with India, presumably to sell reactor technology, but there still seem to be stumbling blocks - the deal was not finalized during PM Modi's recent visit to Tokyo - although both governments have announced they are still working towards its conclusion.

What were the main issues delaying the signing of this deal?

The Australia-India nuclear story is long and complicated. Australia has often seen itself as something of a global crusader on nuclear arms control, and so was at the forefront of countries opposing nuclear commerce with India after its 1998 nuclear weapons tests. But gradually Australia, like many other countries, has shifted its position to see India as a major and responsible partner, in all sorts of areas, from business to education through to strategic issues and energy.

From 2007 to 2011, the uranium issue was caught up in Australian partisan politics, with the conservatives supporting exports to a rising India and fellow democracy but the Labor party focused on maintaining a ban on non-proliferation grounds. Labor finally changed policy in principle in 2011, and kicked off negotiations on a safeguards agreement. It has taken more than two years to finalize the agreement, and now the conservatives - back in power in Canberra - are ready to sign it with New Delhi. So at last there is bipartisan support in Australia for safeguarded nuclear commerce with India.

India faces chronic shortages of electricity, how would this agreement impact India's nuclear energy sector?

The Indian nuclear energy sector is growing as part of a wider plan to increase the country's energy production to meet the needs of its population. Reliable energy supply is vital to improving the living standards, dignity and opportunities for hundreds of millions of Indians. But there is probably not an urgent need for Australian uranium - India already has deals to source uranium from elsewhere, including Canada and Kazakhstan. So for India's energy sector this is about diversifying sources of supply ahead of long-term growth, and Australia has the advantage of geographical proximity, huge reserves and general reliability as a supplier.

What impact is this long-awaited deal likely to have on bilateral relations?

Australia's unwillingness to sell uranium to India has been a major source of mistrust in the bilateral relationship, and an impediment to closer ties with India. The removal of this irritant sends a signal to India that Australia is willing to take the relationship seriously, and to support India's role as a major international player.

There is a big agenda to unlock in economic partnership - including investment, innovation and education - and security cooperation, for instance shared maritime surveillance in the Indian Ocean and a soft kind of balancing against Chinese power. Also, Indians are the fastest growing migrant community in Australia, more than 450,000 in number, and the two leaders are likely to look to ways to harness this community to give the relationship between these two multicultural democracies a new kind of resilience in this Asian or Indo-Pacific century.

What safeguards measures has the Indian government put in place to facilitate this deal?

The deal should be seen in the context of the US-India deal of 2008, which included a 'separation plan' for India to clearly separate its civilian and military nuclear facilities, and the placing of the civilian ones under international safeguards and monitoring. Of course, neither Australia nor any other country should do nuclear commerce with India unless such separation is in place. India has now also concluded a so-called additional protocol with the International Atomic Energy Agency which allows international inspections.

How is the Indian government planning to ensure the uranium will not be used for military purposes or fall into the wrong hands?

It is important that India's separation plan is demonstrably well advanced, and that any Australian or other foreign uranium or other nuclear material is not diverted to India's military program. An increasing number of countries seem to be satisfied on this score.

However, there has been criticism of insufficient transparency around India's nuclear program, which is not so surprising because until 2008 almost the whole program was treated as a matter of national security. With the US-India deal and growing commerce with a range of countries, India can no longer use national security as an excuse for opacity on nuclear issues. It is likely that the opening up of India's nuclear sector to international commerce will also increase pressure to raise standards and transparency.

Many argue that such nuclear deals with countries that have yet to sign the NPT undermine the non-proliferation regime. What is your view on this?

As a former non-proliferation diplomat, I initially found it difficult to consider nuclear commerce with India. But I have come to the view that it is impossible to imagine that global non-proliferation will be sustainable if India is permanently locked out of the rule-making system - it is going to be the most populous nation this century, with one of the three largest economies, a remarkably resilient democratic system, and has moreover been one of the more responsible nuclear powers.

Still, we need to be confident about safeguards, and redouble efforts to engage India as a partner in other arms control efforts, such as preparing for a future ban on production of fissile material.

Interestingly, since the US-India nuclear negotiations began in 2005 - at which time many critics predicted this would do grave harm to the global non-proliferation order - it is difficult to see a ripple effect of more countries suddenly wanting to reject the NPT and seek nuclear weapons.

Rory Medcalf is Director of the International Security Program at the Sydney-based Lowy Institute for International Policy