Why Australia's uranium sale to India is crucial to bilateral ties | Asia Pacific

Why Australia's uranium sale to India is crucial to bilateral ties

Why Australia's uranium sale to India is crucial to bilateral ties

Updated 16 October 2012, 22:08 AEDT

Australia's Prime Minister Julia Gillard is on a three-day state visit to New Delhi, where she'll open talks on selling uranium to India.

Already, opposition to a nuclear deal is building in India, with the ABC reporting that Indian activists are petitioning the Australian PM not to export uranium there.

Australia previously ruled out selling uranium to India as it did not sign the Nuclear Non-Proliferation Treaty, but the Labor government reversed the policy late last year in an effort to improve ties with India, one of the region's biggest emerging economies.

So would the Australia-India relationship have been impeded, if Canberra had not reversed its uranium policy towards Delhi?

Presenter: Sen Lam

Speaker: Dr Harsh Pant, Professor of International Relations at King's College, London and a Visiting Fellow at the Australia-India Institute, University of Melbourne

PANT: Yes, I think so, because the nuclear issue remains for India, a symbol of India's acceptance into the international system. Where India thought that Australia feels very comfortable selling uranium to China for example, which does not really have a very credible proliferation record, but because India has not signed the NPT (Nuclear Non-Proliferation Treaty), India does not get the same privileges - I think that was a bone of contention and remains an argument that Indians have continued to make - that India's own proliferation record is very good, that India has complied with most of the NPT provisions, though it has not signed the NPT, as the rest of the world has recognised India's nuclear credentials, many in India had argued that Canberra should at least acknowledge the fact that India's proliferation record is not bad, and therefore uranium sales should commence. So i think symbolically, it was a psychological barrier that needed to be crossed.

LAM: Well, the relationship was elevated in 2009, to that of a 'strategic partnership'. Do you think that commitment made three years ago is beginning to take off now?

PANT: Yes, but it's still moving very gradually, I think the pace should pick up. They share so many complementary interests that it's very difficult to see why it has taken them so long and such a tortuous journey to reach some of these conclusions that should've been reached much earlier. And the fault I think lies with sides - it's not simply that because Australia was not willing to clarify its position on uranium. I think Indian bureaucracy is reknowned for its ability to scuttle any partnership or any momentum in partnerships, so I think there is also that to blame.. ermm..

LAM: (jumps in) At its most basic, could India be the new China, do you think? Is it a better fit, given the commonalities of language, Commonwealth history, dare I say it - sport?

PANT: Well, it's very difficult to replace China, given the size of the Chinese economy but I do think that India can become an important partner for a range of reasons, as you've identified. But it still remains the case that it is difficult to do business with India and that is a perception that is shared across the world. There're so many domestic problems in India and the lack of transparency for example, the issue of corruption that's hitting the headlines. Compared to China, it makes it difficult for especially the corporate sector to engage in India.

LAM: Well, those are the same problems that foreign investors pin on China?

PANT: Yes, they do, but I think the sheer complexity of Indian politics, sometimes overwhelms investors. When you compare it to China - there's a certain degree of ease with which you can do business, given that it's a single-party system. That once the Communist Party decides certain decisions, they're implemented. Whereas in India, the central government, and the multiple state governments and they do not often see eye to eye on various issues, and those issues have made it difficult for a number of investors. But there is no doubt that India will continue, with all its domestic problems, will continue on an upward economic trajectory. And that opens up a range of opportunities for various countries, including Australia.

LAM: It's been pointed out that an Indian head of government has not visited Australia in over 20 years. Do you think that India can and indeed, should take advantage of this new climate of harmony?

PANT: Absolutely. I think there was some suggestion that the Indian prime minister was supposed to visit (Australia) earlier this year but it fell through given the domestic situation. In India, there's no reason why New Delhi should not reciprocate Canberra's overtures at the moment. I'm not that hopeful it's going to happen in the next two years, because there's an election coming in 2014 and the way Indian domestic politics seem to be moving, there's chaos and domestic turmoil in the country. So I think it would be very difficult for the Indian prime minister to visit in the next two years. But I think it should be on the agenda for the next government, whenever it comes to power - next year, or in 2014.

LAM: How is Australia regarded in India, in strategic terms, by the federal government in Delhi?

PANT: I think increasingly, as the American strategy has shifted to the Asia-Pacific, the whole debate on the implications of the rise of China, as it manifests themselves, India is looking for new partners in the region. For all the reasons that we have discussed, Australia seems to be a natural partner, so there is a certain strategic convergence with the big issues on the table. The question remains, whether the two sides have the political will to actually implement some of the issues that they have been discussing for quite a while now.

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