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India Eyes Uranium for energy

India’s hopes of a fairy tale deal with the Australia ended when PM John Howard spelt out his exit catch-the Nuclear Non Proliferation Treaty (NPT). Despite mixed signals, no change is likely in uranium sales policy was his last bow. Howard’s passage comes close on the heels of US President George Bush’s agreement to supply India with nuclear technology for its civilian program. This has been welcomed as a transforming gesture, drawing America and India much closer and enhancing India's regional status. What Bush had done nearly forced Australia to support and rewrite the longstanding rules that, for three decades, have forbidden countries from providing nuclear technology to those that have not signed the NPT.

During his visit, Howard has been put on the spot because the question is: if the Americans are willing to give the Indians nuclear technology, why should Australia not provide them with uranium? The answers from the Australian Government have been contradictory and confusing. For Australia, the US agreement has raised the issue of the appropriateness of its tough safeguards policy which demands that buyers of its uranium be signatories to the NPT, which India is not. This has ramifications for regional relations, including building up the clout of India as, if not a counterbalance to China, at least another power centre in the region.

But Foreign Minister Alexander Downer and Industry Minister Ian Macfarlane are crystal clear stating that there will be no deals with non-signatories. Downer pointed out that the arrangement with US was "suboptimal". It would be optimal if India signed the treaty. But Premier Howard, in his statements, juggled with the idea of a change in policy though later he reaffirmed that there was no current intention to do that. The whole matter seemed incongruous since Downer and Howard were always in touch with each other over the issue.
For a change the Indians resorted to bold statements and assertions that paid dividends in the US deals by not letting their guest off the hook. Prime Minister Manmohan Singh, during the joint news conference, highlighted India’s "impeccable" credentials on nuclear issues despite not being in the treaty and expected Australia to take "a positive view of recent developments

Downer’s apprehension is that the deal raises the question of Israel and Pakistan, who will not entertain the NPT if India gets uranium. But Australia is wielding uranium as a tool of its wider strategic and political interests in the region on consequences - such as the implications for relations with Pakistan, which might be offended by being treated differently from India, however justified. Howard appears to have been listening and responding to this view, but also remaining with the official policy.

Why uranium? With depleting oil reserves and widespread concern over climate change, uranium has become the fuel of choice. This demand and the ever-present spectre of nuclear weapons make uranium a potent global political issue. Observers have viewed America's recent nuclear deal with India as a counter-balance to growing concerns in the US about China's economic ambitions. To get closer political and economic ties with India, the US has led the push to end India's nuclear isolation.

The NPT was primarily made to ensure that nuclear technology rested in the hands of the Big-Five alone and India originally did not sign the treaty because it objected to the cut-off date to determine the states allowed to have nuclear weapons, which excluded it. According to the World Nuclear Association, there are now 441 nuclear power plants in 30 countries. Among the world's wealthier nations, Japan and the United States are virtually alone in pushing for more nuclear power at home. Several European countries are heading in the other direction, slowly decommissioning their nuclear power plants. But the big growth area is in the developing world, spearheaded by China and India, as they scramble to cope with ballooning energy demands.

Chinese demands

Australia on the other hand does not desperately need the Indian market since Australian and Chinese officials had met in Canberra in January to continue negotiations on a nuclear safeguards agreement that will allow the export of uranium to China. China has a huge demand for civilian energy and ambitious plans to double its nuclear power capacity over the next 20 years. This deal will allow China to use Australian uranium for its energy, diverting more of its existing uranium to its weapons programme. India is miffed at being put in a different category from China, but Australia can point to the long-established nature of its NPT-linked policy.

The bottom line is probably that Howard personally would like the Australian uranium to go to India but has to accept there is no practical way to shift policy without causing too many problems. The Indians can see it as the beginning of a transition in Australian policy. But it can equally be explained as simply teasing out the implications of a crucial regional development.

Sources: The Hindu, ND TV, Hindustan Times, PTI, Sydney Morning Herald, THE AGE