Beyond uranium sales

During her visit to India earlier this month, Australian Prime Minister Julia Gillard made headlines in her country over "yet another shoe slip up" after tripping spectacularly at the Raj Ghat. In contrast, what made headlines in India were the talks between Gillard and Dr Manmohan Singh about the sale of uranium to India. At 31 per cent, Australia's known uranium resources are the world's largest. But any uranium sales to India will not be immediate. The talks only set the stage for negotiations to begin on the establishment of nuclear safeguard agreement. It may thus take a couple of years before uranium sales can start.

The issue at stake is not really the sale of uranium. Its significance for India goes beyond the sale. It is about trust, and about Australia's acceptance of India's nuclear status. Go no further than Indian Prime Minister's statement in the presence of her Australian counterpart while welcoming the Australian decision, "This is recognition of India's energy needs as well as of our record and credentials."

Good start: The talks between Gillard and Singh about the sale of Uranium to India set the stage for negotiations to begin on the establishment of a nuclear safeguard agreementu00a0

Australia is perhaps the last major supplier of nuclear technology and materials to negotiate a deal with India. It was only last December that Gillard had moved a proposal where the ruling Australian Labour Party voted to overturn its policy on uranium exports to India. Prior to that, India had been blacklisted by Australia because India is not a signatory to the nuclear Non-Proliferation Treaty (NPT). In 2008, the United States pushed a deal at the Nuclear Suppliers Group allowing its members to conduct commercial civilian nuclear trade with India, notwithstanding India's status in the NPT. Since then, all the major nuclear technology suppliers - Britain, France, Canada, Japan, Russia, South Korea and the United States - have concluded or are negotiating agreements with India.

India currently has 19 existing nuclear power plants which supply 2.4 per cent of power (4,680 MW) produced in India. India plans to add nearly 30 new reactors over the next two decades, seven of which are being constructed. The goal is to have 25 per cent of power (63,000 MW) from nuclear plants by 2032. Of the 19 operating reactors, only nine run on domestic uranium. The rest are dependent on France, Russia and Kazakhstan, three countries supplying uranium to India since 2008.

In the last parliamentary session, Indian government announced its plans to acquire uranium mines overseas to ensure a continuous supply of the fuel to nuclear plants. The reasons are obvious. Unconfirmed estimates suggest that India currently produces about one-third of its reactor requirements of uranium. Moreover, its uranium deposits are believed to be of very low grade. Currently, only half a dozen operational mines are working on these deposits across the country. The biggest of these mines, at Tummalapalle, was formally commissioned in April this year but hadn't reached full production till last month. At full production, it can boost India's uranium output by as much as 34 per cent.

Of the world's top five uranium producers - Kazakhstan, Canada, Australia, Namibia, and Niger - India is currently importing uranium only from world's top uranium producer, Kazakhstan. India has signed a civil nuclear cooperation agreement with Namibia, but India's non-NPT status prohibits Namibia from supplying uranium to India. Namibia is a signatory to the Africa Nuclear-Weapon-Free Zone Treaty, which bars supply of nuclear material to non-NPT signatory countries. While Namibia ratified the treaty in February, Niger is yet to do so. But India is yet to sign a civil nuclear cooperation agreement with Niger.

This leaves Canada whose Prime Minister, Stephen Harper is set to visit India this week. India and Canada had signed a civil nuclear cooperation agreement two years ago but it is yet to be implemented. The two governments have failed to conclude an administrative arrangement because under its Nuclear Safety and Control Act, Canada wants the right to verify India's handling of all nuclear material it supplies to India.

But India considers this as unacceptable interference because it already reports such activity to the International Atomic Energy Agency (IAEA) under the 2008 NSG deal. In fact, an IAEA operational safety review team yesterday made its maiden inspection visit to two reactors of Rajasthan Atomic Power Station.

The ball is in Canada's court now. As with Australia, it isn't just about uranium sales. It is about Canada living up to its foreign minister's recent statement that when it comes to supplying civil nuclear energy to India, his country had "turned the pages of the last century".u00a0

Sushant K Singh is Fellow for National Security at the Takshashila Institution and editor of Pragati-The Indian National Interest Review