What will be the consequences if Australia agrees to export uranium to India?
It has been reported that an agreement for Australia to export uranium to India will be signed during Australian Prime Minister Tony Abbott's visit in September 2014.
What will be the consequences of such an agreement, not only on India's nuclear energy industry but also the relationship between the two countries? Will there be any negative consequences?
Answer by Balaji Viswanathan:
Why is India so desperate for energy deals?
An average Swedish person [an example of an energy efficient country] uses about 5,134.48 kg equivalent of oil through the year [all economic activities put together]. An average Indian uses about 613 kg. As India develops, its energy consumption would come to to Sweden's levels and that means 8 times more energy consumption.
India's current electricity production is in the range of 250 GW. To get to the level above, we need to grow 8 times to 2000 GW in the next 50 years. A typical nuclear reactor [like the recent one at Koodankulam] produces about 1 GW. That means, to get to our goal without increasing pollution through coal and oil, we need about 1000 such nuclear reactors [like the one we have at Koodankulam] besides drastically increasing our solar and wind units [100x the existing capacity] to get the remaining 1000 GW.
Where are we going to get nuclear material and technology and money for feeding 1000 new reactors? Beg every nation, from Japan to Australia to US to France.
John Howard of Liberal party already promised a nuclear deal 7 years ago, but frequent shifts in Australian government there have poured cold water. Prime Ministers Kevin Rudd and Julia Gillard have been going back forth, irritating India's leadership.
With business friendly leaders coming back on both sides, it is time to say carpe diem.
What this Nuclear Deal Means For India
- Australia has 40% of the world's known Uranium reserves. Thus, an agreement with Australia will be huge for Indian nuclear energy. Australia also has plenty of nuclear tech for refining and processing.
- Australia and India are the biggest powers in the Indian Ocean and it makes a lot of sense for both of them to come together in maritime security. The nuclear deal will make the process smooth.
What this means for Australia [and the West]
- Tap India's domestic market. Australian industries like tourism, banking, energy and education are to directly gain from a growing trade deals.
- Australia is now putting too much of its eggs in Chinese basket and wants to diversify its export market. India could offer an additional market and a competition for its resources would push prices up (that is good for Australian producers).
- India doesn't lean too much on Russia, Sudan, Iran and other energy rich nations that are considered enemies of the West. For an energy hungry India, a deal with the above countries is inevitable if the West doesn't give it the energy. A desperate nation with new riches will make all the West's sanctions on these countries go meaningless.