The US-India Business Council believes that India will install nuclear reactors worth up to USD150 billion in the coming decades. While Russia has positioned itself as the leading supplier of nuclear technology to India, other suppliers are also keen for a slice of the market. France’s Areva, one of the world’s largest suppliers of nuclear reactors, has signed an accord to supply between two and six nuclear reactors, and South Korea is also keen to demonstrate its credentials. US suppliers are also seeking a major role in the market, but have been hamstrung by legal complications. Although the so-called 123 Agreement between India and the United States, approved in 2008, opened the way in principle for the supply of US technology to India, a key agreement on reprocessing has only just been finalised and there are further requirements to be satisfied in coming months. US companies are also demanding Indian legislation that would limit their liability in the event of an accident.
At the same time, India has been securing uranium supplies for its civil nuclear program. Over the past year or so, India has concluded deals with Russia (which may involve Indian stakes in Russian resource fields), Kazakhstan, Gabon, Mongolia and even Canada.
Two noticeable absences from this list of countries are Japan and Australia. Negotiations between India and Japan over the supply of Japanese nuclear technology have been deadlocked over Japan’s demand that India become a party to the Fissile Material Cut-Off Treaty (FMCT), which would have the effect of precluding India from conducting further tests. India has so far refused to sign the FCMT, although it has recently reiterated its unilateral moratorium on nuclear testing. The Japanese government is under significant pressure from its nuclear industry to access the Indian market. There were indications of progress on the issue during Japanese Prime Minister Hatoyama’s visit to New Delhi in December. However, it is not yet clear how Japan and India might reach a compromise. It is possible that there may be some movement on India’s nuclear status in connection with this month’s global Nuclear Security Summit to be held in Washington.
Australia remains the most obdurate of potential major nuclear suppliers to India. Since the election of the Rudd government, Australia has not indicated any progress over the supply of uranium to India. The Rudd government, it seems, is hostage to the ALP Left and the Greens over the issue and seems unlikely to consider the question until after the next election, if then. New Delhi remains perplexed at Australia’s irrational stance, particularly after Australia agreed in the Nuclear Suppliers Group in 2008 that other suppliers could supply uranium to India.
Where does this leave India? The Russian reactor supply deal underlines the fact that, if necessary, India can make do without US and Japanese nuclear technology, although it does prefer to use both. India’s ability to secure uranium supplies from Russia, Canada and others also underlines that India can make do without Australian uranium, although again it would prefer to have Australia on board.
The Russian deal will also confirm the view of many in New Delhi (and there are surprisingly many) who regard Russia as a much more reliable strategic partner than the US and its allies are ever likely to be. The partnership with Russia contrasts with what some might see as the somewhat more conditional relationships offered by the United States and its regional allies. While India seems prepared to cut Japan a bit of slack on the nuclear issue (while continuing to pressure them for a deal), Australia’s position is seen by many as indicating a lack of respect. To a large extent the issue might be symbolic, but Australia’s refusal to show itself as a respectful friend does it no favours in building a long term and constructive relationship with a rising India.
David Brewster is with the Strategic and Defence Studies Centre, Australian National University.