Australia's uranium sale to India will come with strict inspection regime

The Australian Labour Party has backed Prime Minister Julia Gillard's proposal to reverse the ban on sale of uranium to India. It was the Labour Party that forced the then Premier, Kevin Rudd, to overturn an assurance by the Conservative Party that was in power previously, to sell uranium to India.

Ms. Gillard, who replaced Mr. Rudd, was initially not receptive to India's requests for a change in stance. New Delhi proposed sending an envoy to the Labour Party conference to explain India's non-proliferation credentials though it had not signed the Nuclear Non-Proliferation Treaty and possessed nuclear weapons.

But New Delhi's intervention was not required, and at the conference, Ms. Gillard made a forceful plea for selling uranium to India. It was good for business, she argued, and withholding the sale was not going to make India give up nuclear weapons.

Official sources here expect the proposal to go through the executive process, after which diplomats will start negotiating the terms and conditions. This is expected to be tough because Australia has proposed a strict regime of inspections in its civil nuclear agreement with China. Moreover, a day after Ms. Gillard wrote an article pushing for India's case, Pakistan sought a similar deal and demanded that it should not be left in the cold, as was the case after the U.S.-India civil nuclear deal.

In that article, Ms. Gillard gave a broad hint of the conditions in store for India: “We must, of course, expect of India the same standards we do of all countries for uranium export — strict adherence to the International Atomic Energy Agency arrangements and strong bilateral and transparency measures, which will provide assurances our uranium will be used only for peaceful purposes.”

At the conference, she made the same point. “...we can — under the most stringent of agreements — sell uranium to India if we so choose and, delegates, I believe that we should make that choice.”

Ms. Gillard won most of the Labour Party delegates over to her side, a fortnight after meeting Prime Minister Manmohan Singh and days after a summit with U.S. President Barack Obama.

A favourable atmosphere was created when Dr. Singh met Mr. Obama at the Association of South East Nations (ASEAN) summit in Bali after New Delhi announced the fine print of the nuclear liability legislation a night earlier. Its rules were considered flexible enough to allow U.S. companies to put their plans of setting up a dozen nuclear power reactors in high gear. This might have encouraged Mr. Obama to put in a word for India during his meeting with Ms. Gillard in Australia.

Australia is home to 40 per cent of the world's economically extractable uranium and would secure supplies for several reactors India plans to build with foreign assistance.

India has traditionally bought the high quality Australian coal; it has recently inked a multi-billion-dollar deal to import gas. Uranium would add to India-Australia energy ties, which may begin drifting to the security sphere.

A White Paper in Canberra suggested a U.S.-India-Australia trilateral dialogue on security. A few days ago, Mr. Rudd, now Foreign Minister, was said to have suggested this trilateral in return for selling uranium to India. There were sharp reactions from the Ministry of External Affairs and the Defence Ministry here, but the next day the Australian Foreign Office claimed he was misquoted.

But Australian think-tanks have adopted the theme and are suggesting that since India has agreed to a trilateral dialogue with the U.S. and Japan, there should be no problem with a similar arrangement with Canberra. They have also predicted that this arrangement might lead to joint naval operations and theatre missile defence.

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