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N-deal highlights growing energy ties

India-Australia agreement follows two years of dialogue

September 06, 2014 04:33 am | Updated December 04, 2021 11:27 pm IST - NEW DELHI

Australian Prime Minister Tony Abbott offers floral tribute to Mahatma Gandhi at Rajghat on Friday.

Australian Prime Minister Tony Abbott offers floral tribute to Mahatma Gandhi at Rajghat on Friday.

Australia on Friday boosted its credentials as India’s core energy partner by signing a deal for uranium supplies, and imparted urgency to the transfer of coal for thermal power plants, facing severe shortage of the resource.

Visiting Australian Prime Minister Tony Abbot unveiled Canberra’s aspirations by pointing out that Canberra could become an “utterly reliable source of energy, resource and food security for India.”

Analysts point out that the deeper engagement in energy and food security could pave the way for a broader strategic relationship between the two countries, which could include a significant defence component.

A joint statement on defence cooperation signed last year had emphasised joint forays specifically in the Asia-Pacific region — an area of growing tensions because of rival claims on South China Sea resources between China and other littoral States — as well as the Indian Ocean region.

Yet, on Friday, the visiting Prime Minister stressed that Australia was pursuing a policy of dual engagement with India and China. “I should add, in respect of our relationships with China and with India, that it’s possible to have more than one friend at the same time,” observed Mr. Abbot.

The nuclear deal follows two years of dialogue, ending with the lifting of Australia’s longstanding ban on exporting uranium to help offset India’s chronic energy deficit. Observers point out that the Indo-U.S. nuclear deal has paved the way for countries like Australia, a major ally of the United States, to emerge as India’s nuclear supplier, despite New Delhi’s refusal to sign the Nuclear Non-Proliferation Treaty (NPT).

India runs 20 atomic reactors at six sites, generating 4,780 MW of electricity — a mere two per cent of the country’s total power output. But the government has ambitious plans to generate 63,000 MW of nuclear power by 2032.

Queensland project

Observers say both India and Australia aspire to be investors in a broad spectrum of areas including energy. In July, the Australian government approved a $16.5 billion investment by the Adani group in a coal and rail project in the province of Queensland.

Indian industry wants urgent coal imports from Australia as thermal power plants in the country are facing acute shortage of coal. Commerce and Industry Minister Nirmala Sitharaman said on Friday that India had invested more than $ 1 billion in Australia in the last decade, but the Australian contribution in India stood at a more modest $ 600 million.

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