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Australia and India’s Nuclear Deal: A New Beginning in the India-Australia Relationship

Posted: October 22, 2014 at 2:42 pm   /   by   /   comments (0)

By Ashok Sharma

During his visit to India on September 5, 2014, Australian Prime Minister Tony Abbott and India’s new Prime Minister Narendra Modi signed a long pending civil nuclear deal, which will allow for the export of Australian uranium to India.[1] In their meeting, Abbott and Modi covered a broad range of issues, ranging from nuclear energy, trade, and education, to the defense relationship. For the topics discussed and the issues agreed upon, this meeting signaled a new chapter in the India-Australia relationship.

This article assesses the recently concluded Australia-India civilian nuclear agreement and argues that this landmark step shows the growing trust and confidence between Australia and India, and further strengthens the ongoing India-Australia strategic partnership. This article is divided into three main sections. The first section briefly surveys the history of India-Australia relations. The second examines India’s stand on the Nuclear Non-proliferation Treaty (NNPT) and how it has been a point of disharmony in India-Australia relations. Lastly, the third section examines the newly agreed upon civil nuclear deal and assesses its implications for future India-Australia relations—especially in the context of India’s inclusion in the global nuclear regime. Issues of nuclear safety, energy security, bilateral economic ties and emerging strategic and security scenarios are also touched upon in subsections.

 

India-Australia Relations: Towards Strategic Convergence

Despite sharing many political, cultural, and historical commonalities, India and Australia have long had a distant and uneasy relationship. For decades this was because of Cold War political dynamics and India’s choice to pursue a foreign policy of non-alignment (later, siding with the Soviet Union); this contrasted with Australia’s ANZUS pact alliance with the United States. The demise of the Soviet Union, however, brought an end to these ideological differences, and in the wake of the Cold War, India took steps to liberalize its economy and restructure its foreign policy. Over the past decade, India’s economic progress, expanding military and naval capability, and fears over the emergence of China have led to the convergence of Indian and Australian interests. As a result, the India-Australia relationship has warmed, and trade, diplomatic, and people-to-people ties have begun to flourish.

Despite these positive developments in bilateral ties, India and Australia to date have been unable to solidify their improved relationship because of “the nuclear issue.” India’s non-signatory status to the Nuclear Non-Proliferation Treaty (NNPT) and its 1998 nuclear test for military purposes have prevented the nations from coming together on many shared diplomatic and political interests. As a result, the full potential of their bilateral relationship has yet to be realized.

 

India and Nuclear Non-Proliferation Regime

India has been advocating for global nuclear disarmament for decades; while doing so, however, India has also refused to sign the NNPT, claiming that the NNPT supports an unfair global order that allows the “Permanent Five” (the US, UK, China, France and Russia) to keep nuclear arsenals while condemning others. Furthermore, India believes that the NNPT undermines its security in the face of a nuclear China and Pakistan and China-Pakistan’s “all weather friendship.”

Despite its non-signatory status, India though has adhered to a strict export control regime of nuclear material and technology. It tested atomic weapons in 1974 for “scientific purposes,” and only broke its self-imposed moratorium on nuclear tests for military purposes in 1998.  India’s nuclear tests aimed to address long-term security challenges posed by its two nuclear neighbors, Pakistan and China. In the wake of these tests, the US and other nuclear nations imposed sanctions on India for defying the international nuclear order. The US though soon lifted sanctions on India’s nuclear trade after a US-India bilateral strategic dialogue helped ease misperceptions about India’s nuclear tests, and in 2008 the two nations signed a US-India Civilian Nuclear Deal.

The US-India nuclear deal primarily aimed at addressing India’s looming energy crisis. It also recognized India’s growing economic profile, its appetite for energy, and its strategic importance in Asia’s balance of power.  The deal ensured the separation of India’s civilian and military-purpose nuclear reactors. India’s atomic reactors were brought under international safeguard measures and opened to the International Atomic Energy Agency (IAEA) inspection.

Similarly, the India-Australia relationship had also been marred by disagreements over India’s non-signatory status of NNPT. As a result of its non-signatory status, until recently, Australia would not sell uranium to India. This changed in 2006 with Australian Prime Minister John Howard’s visit to India. His visit, alongside US President George W. Bush’s 2006 India visit, reversed a long-stand policy of not selling uranium to India, a NNPT non-signatory nation.[2] Three years later, however, the Kevin Rudd-led Labor government overturned the Howard government’s 2006 decision, and again the nuclear issue became a wedge in Australia-India relations. Adding further complexity to its stance, the Rudd-led Labor government supported the nuclear exception that was made to India in 2008 when Australia voted along with the United States in the Nuclear Suppliers Group to help India overcome its energy security challenges.

In short, the Rudd government supported India’s admittance in global nuclear trade despite its non-signatory status to NNPT, but denied India access to Australian uranium. In the eyes of the Indian government, as well as factions within his own Labor party members and opposition Liberal party, the Rudd government’s stance was inconsistent. Australia was selling uranium to China (a NNPT signatory nation, but one with a suspect record of nuclear proliferation to Pakistan and North Korea), but banned uranium sales to India.[3] To many, this was hypocritical.

 

Implications of the Australia-India Uranium Deal

The latest Abbott-Modi meeting has put the final stamp on negotiations for the export of Australian uranium to India that began under the Julia Gillard Labor government in 2011. The Labor Party formally voted to lift its long-standing ban on uranium sales to India despite the latter not being an NNPT signatory. As a result, India has become the first non-NNPT signatory country to receive Australian uranium, indicating the global acceptability of its nuclear program.[4] India has integrated into the larger nuclear non-proliferation regime and is a member of multilateral organizations that deal with the NNPT agenda such as International Atomic Energy Agency and the World Association of Nuclear Operators. In light of this landmark deal, Australia and India can further work together in the following ways:

  • Ensuring India’s Nuclear Industry Safety. After the Fukushima nuclear incident in 2011, there was a growing concern for the safety of the nuclear power industry. India’s nuclear industry is at a unique point of transition where there is both political will and industrial momentum to improve its nuclear safety.[5] India’s nuclear industry, however, still lacks expertise in its public engagement and risk communication. Australia can help India improve the safety of its nuclear industry by sharing expertise in risk management and communication.
  • Addressing India’s Energy Crisis. At present, nuclear energy makes up 3 to 4 percent of India’s energy mix and has the potential to become 20 to 25 percent of India’s energy mix by 2050.[6] One fourth of India’s 1.2 billion people still have insufficient access to electricity. India currently has nuclear energy agreements with eleven countries and imports uranium from France, Russia, and Kazakhstan.  But Australia has 40 percent of the world’s uranium reserves and the sale of Australian uranium can bring a meaningful change to India’s energy security efforts.
  • Growing Australia-India Trade Ties. India-Australia bilateral trade in energy and mining-related sectors can be further strengthened. A decade ago India was not even in the top ten destinations for Australian exports; today it is Australia’s fifth-largest export partner. India accounts for $A11.4 billion or 3.6 percent of Australian exports.  And it is not just a one-way trade. Indian companies such as Adani Group, GVK Group, and Tata Consultancy have made large investments in the service, energy, mining, and infrastructure sectors of Australian economy, which now total over $11 billion. Bilateral trade too has grown in value from A$5.1 billion in 2003 to A$15.2 billion in 2013.[7]

 

India-Australia Converging Security Interests

The September Abbott-Modi meeting also reaffirmed growing security ties. Both countries share concerns about the Islamic State and Al-Qaeda’s announcement to open a franchise in India. Both countries have reaffirmed their commitment to ensure the freedom of sea-lanes, reaffirmed liberal democratic values, and pledged to fight terrorism. Furthermore, India and Australia have announced plan to hold a joint naval exercise in 2015 to enhance maritime security in the Indo-Pacific region.

In addition to this convergence of strategic interests to protect the global commons, both nations are concerned about the rise of China and resulting power shifts. Both nations seek to prevent Asia from being dominated by a single power despite the fact that both have substantial economic interests in China. Although, neither India nor Australia expects the other to provide military support in the event of Chinese aggression, both hope that India’s strategic presence in the region and its strong relationship with other maritime democracies will lead to a new regional security architecture that can prevent Chinese domination.

The growing strategic and defense partnership of India and Australia is enhanced by India’s growing closeness to the United States, the US-Australia alliance, and the US rebalance to Asia. A significant step in this direction was collaboration among the four maritime democracies in the Asia-Pacific region under the “Quadrilateral Initiative,” an idea which emerged after the naval exercise between US, Japan, Australia and India during tsunami rescue operations and the Malabar naval exercise in 2007.[8] Finally, the India-Australia “strategic partnership” has yet to achieve full maturity. Both governments will have to clarify their expectations on areas of cooperation, so as to make a meaningful impact solving traditional and non-traditional security issues.

While signing the new uranium deal, Prime Minister Abbott remarked, “We signed a nuclear cooperation agreement because Australia trusts India to do the right thing in this area, as it has been doing in other areas….That is why we are happy to trust India with our uranium in the months, years and decades.”[9] This shows the growing confidence and mutual trust that Australia and India have developed in their strategic partnership.  In the face of growing strategic and energy challenges, there is reason for optimism regarding the future of Australia-India relations.

 

Ashok Sharma is an honorary academic in Politics and International Relations at the University of Auckland. He is also a fellow at the New Zealand India Research Institute at Victoria University of Wellington, and deputy chair of the New Zealand Institute of International Affairs, Auckland Branch.

 


 

Citations

[1] Mark Kenny, “Tony Abbott’s Indian summer: uranium, artworks and cricket,”  The Sydney Morning Herald, 5 September 2014. http://www.smh.com.au/national/tony-abbotts-indian-summer-uranium-artworks-and-cricket-20140905-10d41x.html. Accessed on 16 October 2014.

[2] Ashok Sharma, India-Australia Relations: A Deeper Engagement, Institute of Peace & Conflict Studies, 26 April 2006.  http://www.ipcs.org/article/india/india-australia-relations-a-deeper-engagement-1998.html, Accessed on 26 April 2006.

[3]  Ramesh Thakur, “Ballast for Australia-India Relations,” Japan Times, 4 March 2013, http://www.japantimes.co.jp/opinion/2013/03/04/commentary/world-commentary/ballast-for-australia-india-relations/#.VCjMIqP2-Uk. Accessed on 22 April 2014.

[4] Amitabh Mattoo, “The new promise of India-Australia Relations,” Al Jazeera, 4 September 2014; Nick Bisley, “Australia’s India gambit, the final step in wooing Asia’s key players,” The Conversation, 9 September 2014.  https://theconversation.com/australias-india-gambit-the-final-step-in-wooing-asias-key-players-31225, Accessed 6 September 2014.

[5] Catherine Mei Ling Wong, “Australian uranium deal could make Indian nuclear power safer,” The Conversation, 5 September 2014, https://theconversation.com/australian-uranium-deal-could-make-indian-nuclear-power-safer-31290, Accessed 6 September 2014.

[6] Ashok Sharma, “India and Energy Security,” Asian Affairs, Vol38, No.2, 2007, Pp.158-172;  Ashok Sharma, “Abbott’s visit to take Australia-India relations beyond cricket,” The Conversation,3 September 2014, https://theconversation.com/abbotts-visit-to-take-australia-india-relations-beyond-cricket-31056, Accessed 3 September 2014.

[7] Australia-India Comprehensive Economic Cooperation Agreement Negotiations.  https://www.dfat.gov.au/fta/aifta/. Accessed 26 August 2014.

[8]  Ashok Sharma, “Quadrilateral Initiative: An Evaluation,” South Asian Survey, Vol. 17, No. 2 , Pp.  237-253.

[9] Nigam Prusty, “India and Australia seal civil nuclear deal for uranium trade,” Reuters, 5 September 2014, http://www.reuters.com/article/2014/09/05/us-india-australia-idUSKBN0H00N320140905

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