Kept away from international nuclear trade dialogue for several years for not being a signatory to the nuclear non proliferation treaty, India has finally got the go-ahead from Australia, which is to ship uranium to India.
While the civil nuclear deal would give the Asian nation access to vast resources of raw material, the red carpet is also being rolled out for India's Prime Minister Narendra Modi, who is set to visit Australia from November 16, after the conclusion of the G-20 Summit.
Anil Wadhwa, a government official in the External Affairs Ministry said the two countries would sign four agreements during the visit, whereas the agreement that caters to the export of the yellow cake inked earlier, has seen steady progress.
He added that though India has uranium export deals with 11 countries and imports uranium from Russia, France, and Kazakhstan, India would be the first country to get Australian uranium without being a signatory to the nuclear non proliferation treaty.
For the naysayers, Australia has said that it would ensure adequate safeguards, in the form of bilateral safeguards. Reports indicate that by 2018, exports are set to double to a billion dollars once shipment starts to India.
When Prime Minister Modi visited Japan, the visit did not see the dawn of a civil nuclear pact, though early indications had suggested as much. However, since India has been in negotiations for the sale of uranium with Australia since early 2012, the pact with Australia is seen to help boost India's energy sector.
With uranium mines in Andhra Pradesh and Jharkhand, India still does not have sufficient reserves for its expanded civil nuclear programme. Once exports start, it would ease the supply constraint on uranium, the short supply of which has been choking the functioning of the existing network of nuclear reactors across the country.
Analysts have pointed out that for some time now, Australia has been looking to replace China, its main uranium export destination, by ensuring suppplies to India.
Analyst Neelima Patil said trade between India and Australia is currently around $15 billion, while Australia's trade with China is more than $150 billion.
While India would be an additional market for exports, competition for Australia's resources would also push up prices, she said.
Since Australia has the world’s largest deposits of uranium, she pointed out that exports to India would give a boost to Australia's mining industry. It would also ensure that Australian mining companies who have been seeking to expand production, would now be able to ink deals with Indian miners.
''Deputy Premier of South Australia John Rau has said as much, while on his visit to Delhi last week, that Australian uranium miners have been waiting for some time to ink joint ventures with India, given the policy changes that have been announced over the past two years,'' she added.
India’s civilian nuclear industry is growing, said Patil, adding that over the next decade, the global demand for nuclear power is set to grow substantialy. With the number of operating plants in India expected to soar from the current 20 to more than 60 over the next decade, Patil added that Austrlian miners have been waiting to cash in on the opportunity.
Australia has about 40% of the world's uranium reserves and exports nearly 7,000 tonnes of yellow cake annually. Though the top trading partner is China, the deal would ensure regular shipments for nuclear energy starved India.
In India, not all uranium deposits explored are mined and processed. As of May 2014, Indian Parliament was informed that the country has around 1,79,329 tonnes of uranium reserves.
Moreover, Indian Rare Earths Limited, a 100% owned Government of India Undertaking, under the administrative control of the Department of Atomic Energy, has three mining and mineral separation plants at Manavalakurichi, Tamil Nadu, Chavara, Kerala, and Odisha for producing atomic minerals from beach sand.
India's Department of Atomic Energy has been importing uranium ore to supply fuel for the country's nuclear reactors. Contractual agreements have been entered into for the supply of nuclear fuel with various countries.
Official data indicates that with Areva, France, a one time supply of 300 MT of natural uranium ore concentrate was inked to be supplied during 2008-09 and 2009-10, while with JSC Tvel Corporation, Russia, a agreement to supply 2,000 MT of natural uranium oxide pellets was inked, to be shipped in quantities of 200-400 MT annually.
Another agreement was inked with the same company, for the one-time supply of 58 MT enriched uranium di-oxide pellets, which was received during 2009-10.
With NAC KazatomProm, Kazakhstan, 2,100 MT of natural uranium ore concentrate was inked to be supplied in quantities of 300-400 MT annually during 2009-2014.
With NMMC Uzbekistan, 2,000 MT of uranium in the form of uranium ore concentrate was inked for supply during 2014-2018.
Manish Panchal, another analyst with an international think tank said that India had also set up a company to acquire uranium mines abroad, in order to ensure the supply of fuel for its growing nuclear power programme.
A joint venture company between the Nuclear Power Corporation of India Limited and Uranium Corporation of India Limited has been recommended by The Atomic Energy Commission, to explore the possibility of acquiring uranium assets abroad.
''It is this new company that could seal some initial deals with Australian miners, that would allow for the export of natural uranium concentrates to Nuclear Power Corporation of India,'' he said.
He added that there were other ''political'' considerations too. A smooth nuclear deal would ensure high level maritime security between the two nations, given that India and Australia are the biggest powers in the Indian Ocean.
Smooth relations between the two countries would deepen trade, security, and educational ties. He added that it would lead to more policy clarity in India, deeper liberalisation and deregulation.