India-Australia: Visits and Uranium Shipments

After Prime Minister Malcolm Turnbull’s visit to India in April, Australia highlighted the increasing importance of its relationship with India in a mid-July visit to New Delhi by Foreign Minister Julie Bishop. The visit included meetings with Prime Minister Narendra Modi as well as External Affairs Minister Sushma Swaraj and Arun Jaitley, who is responsible for both the defense and finance ministries.

The trip was designed to consolidate Turnbull’s earlier visit and strengthen the increasing economic ties – with Australia seeking to capitalize on India’s strong rates of growth – as well as broaden the defense and security ties between the two countries.

Symbolically, Bishop’s visit to New Delhi coincided with the departure of the first shipment of Australian uranium to India. The Australian government refused to state how much uranium is being transported, from which port in Australia it has left, and to which port in India it was heading. Australia and India had negotiated a nuclear cooperation deal in 2014, with Australia reversing its long established policy of not selling uranium to any country that had not signed the Nuclear Non-Proliferation Treaty (NPT).

The policy reversal came after the U.S. administration of George W. Bush approached the Nuclear Suppliers Group (NSG) to allow India to access civilian nuclear technology and fuel from other countries, providing an opening for Australia. However, Australia also began to realize that an overreliance on China as a trading partner was not healthy and India would need to become a larger part of its economic and strategic future. This policy reversal also presented a more consistent line from Australia in its uranium exports, recognizing the biases of the NPT that India had continually objected to.

Australia possesses the world’s largest uranium deposits – around one-third of the world’s known deposits – yet its strict guidelines on usage and legal issues around mining rights within land owned by Indigenous Australians makes it only the third-largest producer after Kazakhstan and Canada.

Australia sees its primary opportunity in India as being able to facilitate India’s massive, and increasing, energy requirements. This includes the ability to export significant quantities of uranium to complement its exports of coal (including the future US$16.4 billion Carmichael Mine in central Queensland proposed by Indian businessman Gautam Adani).

However, both these materials are deemed highly controversial, and are potentially at the mercy of emerging markets forces with coal, or shifting government attitudes in the case of uranium (although both of Australia’s current major parties are now on the same page with regards to uranium exports).

Australia seeks to insulate itself from any moral quandaries around India’s nuclear weapons program by stipulating that any uranium it exports can only be used for civilian purposes like power generation. However, this provision simply allows India to divert uranium from its domestic deposits toward its nuclear weapons program. This makes Australia’s sale of uranium to India an implicit endorsement of India’s nuclear weapons program, and subsequently makes Australia a secondary, but active, participant in the regional power dynamics with India’s nuclear armed neighbours.

India’s nuclear policies – “no first use” and “credible minimum deterrence” – offer some moral safeguards to Australia’s implicit participation; however, in an scenario where tensions are escalated within India’s neighborhood “credible minimum deterrence” becomes a flexible concept.

While in New Delhi, Bishop made mention of Australia’s recent commissioning of an “India economic strategy” – to be headed by a former Australian high commissioner to India – to help Australia understand where its economic opportunities with India are located. Presently, Australia still lacks the sophistication to see itself beyond a supplier of raw materials to emerging economic powers like India. These “big ticket” items like uranium and coal are deemed to be the building blocks for the broadening of further engagement.

However, such controversial raw materials tend to put significant sections of the Australian public offside, making them suspicious of the burgeoning relationship, and potentially undermining a deeper civil society engagement, and the impetus for others areas of possible trade. Overcoming these domestic suspicions and attempting to find more comfortable areas of economic engagement should become a serious priority of Australia’s approach to India.