India has an energy-starved economy and Australia holds 40 per cent of the world's uranium reserves. Both see the merits of a deal.
Australia's PM edges closer to India uranium deal
NEW DELHI //The Australian prime minister, Julia Gillard, is in the capital this week for discussions on a civil nuclear agreement that may lead to selling uranium to energy-starved India.
Australia has agreed to consider the sale even though India has not signed the Non-Proliferation Treaty which, among its objectives, is to promote the peaceful uses of nuclear energy.
Ms Gillard and India's prime minister, Manmohan Singh, are expected to meet tomorrow to announce the start of preliminary negotiations.
India isbetting heavily on nuclear power to bridge the gap in its electricity supply. Earlier this year the country suffered through two record-breaking blackouts which left more than half the country's one billion citizens in the dark.
"They will discuss this matter and make some progress, but [it] will take some time," said an Indian government official.
An Australian official confirmed the agenda, saying that an announcement was likely to set out how safeguards would be put in place to ensure the uranium would be used for peaceful purposes.
India's government plans to spend about US$175bn (Dh642bn) during the next two decades to build 30 nuclear reactors and move away from coal-fired facilities. It now has 20 smaller-sized nuclear reactors at six sites that generate about 3 per cent of the country's total energy capacity.
By 2030, the country hopes to generate about a quarter of its total energy from nuclear energy.
Australia's ruling centre-left Labor party voted to overturn its ban on uranium sales to India last year after a long debate about nuclear weapons and reactor safety following Japan's atomic crisis.
India's fast-growing economy is a key trade partner for Australia and the two countries agreed in 2009 to upgrade their relationship to a "strategic partnership" involving greater security cooperation.
Ms Gillard, who landed in Delhi yesterday after a surprise trip to Afghanistan to visit Australian troops, will meet business leaders and visit an education project today before holding talks with Mr Singh.
Australia holds 40 per cent of the world's known uranium reserves. It does not sell uranium on the open market and bans nuclear power generation at home.
But it sells uranium only for the purpose of power generation under strict conditions banning any military applications in bilateral trade agreements with the United States, China, Taiwan, Japan, South Korea and several European countries. India ended its status as a nuclear pariah when it entered into a civil nuclear agreement with the US in 2005 that was approved by the International Atomic Energy Agency.
Australia is the third-largest exporter of uranium, after Kazakhstan and Canada, which have already signed nuclear cooperation agreements with India.
"For India, this is extremely important because they see it [potential sale of uranium] as a friendly act," said Rumel Dahiya, deputy director general of the Institute for Defence Studies and Analyses in New Delhi. "Because the Australians have huge reserves, more than what they can use domestically, and for choosing to sell to India - that is a test of bilateral relations." He also believes Australia has altruistic motivations to sell uranium to India.
"It [any agreement] is part of Australia's stand on environmental needs and clean energy. If nuclear energy is denied to India, there will be adverse effects on the environment from all the coal burning," he said.
* With additional reporting by Agence France-Presse and the Associated Press