Australian Prime Minister Tony Abbott’s visit to India was a reaffirmation of the turnaround in bilateral ties. The fledgling relationship of yesteryear has grown into a trade and strategic partnership, drawing Australia and India closer on defence and security collaboration. The centrepiece of Abbott’s visit was the signing of the agreement on civil nuclear cooperation that will allow Australia to export uranium to India. The timing of this deal coincides with a looming power-sector crisis in India, at a time of shortages in the supply of coal for thermal plants that generate most of India’s electricity, even as a number of hydro-power projects remain stalled by environmental regulations and local protests.
The agreement is a breakthrough, given Australia’s strict and unilateral non-proliferation commitments. Despite Canberra’s lifting of the ban on uranium export to India in 2012, Delhi — an NPT non-signatory — had to give further assurances about not using the nuclear fuel for military purposes. India’s demand for energy will only rise, with its per capita electricity consumption expected to double by 2020, touching 5,000-6,000 kWh by 2050, according to the World Nuclear Organisation. To increase generation and reduce its carbon footprint, India needs to speedily diversify its energy basket, cutting back on thermal power. Nuclear power provides the most feasible alternative, but India operates just 20 small-sized nuclear reactors that contribute 2 per cent of the country’s total power capacity at 4,780 MW. To meet the government’s target of 63,000 MW by 2032, with 30-odd reactors, is a tall order. Moreover, although Australia has about 40 per cent of the known uranium reserves in the world, less than 20 per cent of that uranium is exported, and most of it is tied up in long-term contracts. So, India cannot expect its first shipment for another couple of years at least.
India has struck deals with Kazakhstan and Canada too, the world’s largest repositories of uranium. It is imperative for the government to persist in its civil nuclear outreach for the procurement of nuclear fuel and reactors. To meet its nuclear power target, India must also amend the self-defeating nuclear liability law. By putting liability on the supplier, the law effectively shuts the door on foreign equipment suppliers. The UPA’s last-minute finessing, by making the exercise of the right to recourse the operator’s call, sought to mitigate the damage, but didn’t go far enough. The NDA government, which, in its first month, showed some seriousness on implementing the Indo-US nuclear deal by ratifying the IAEA’s Additional Protocol, must now rework the liability law.