Australia and India in uranium sales talks

Australia and India have begun talks on sales of uranium, a significant diplomatic victory for the South Asian power as Canberra drops its reservations about selling yellowcake to a non-signatory of the Treaty on the Non-Proliferation of Nuclear Weapons.

Reaching out to India, Australian Prime Minister Julia Gillard, who held talks with Prime Minister Manmohan Singh yesterday, highlighted her government's decision to overturn a longstanding ban on uranium sales to India.

"I am glad we have been able to overcome the issue about uranium which had become a point of tension... I think we can be a contributor to meeting India's energy needs," Gillard said at a business meeting here yesterday.

Dr Singh said the two countries had agreed to begin negotiations for civil nuclear cooperation and said he appreciated Australia's decision to allow uranium sales to India.

India's nuclear test in 1998 triggered heavy Western sanctions, including from Australia. In 2008, the Nuclear Suppliers Group, the group which governs nuclear trade, lifted all sanctions against India, allowing international commercial nuclear trade.

Australia's initial position was that it would not enter into nuclear trade with a country that had not signed the Nuclear Non-Proliferation Treaty. India has refused to sign, saying it is discriminatory.

Gillard, who was instrumental in reversing the Australian position on nuclear trade last year, is signalling Australia's interest in working more closely with India at a time when Western markets are in decline.

"It is in Australia's own interest to sell uranium to India," said Dr G. Balachandran, consulting fellow at the Institute for Defence Studies and Analyses, a New Delhi-based think-tank.

Shifting geopolitical currents are playing a part. "Australia looks at India as an emerging factor at a time when China is becoming more aggressive and developing differences with many... countries on its maritime boundary," said G. Parthasarathy, former Indian ambassador to Australia.

Trade between India and Australia has grown 13 per cent annually in the last five years.

Australian exports to India, which include coal and wool, were valued at around US$15 billion, while India's exports were just under $2.4 billion for the last financial year. Indian investments in Australia worth $11 billion were approved last year. Ms Gillard said the countries aim to grow bilateral trade to $40 billion by 2015.

"Asia is becoming the world's largest consumer market," said Gillard, who is in India for three days. "For Australia, we are in the right part of the world at the right time."

It is expected to take a year or two before India can buy uranium from Australia.

In recent years, New Delhi has signed agreements with the United States, France, Russia and other countries to import nuclear technology and equipment. It has also signed agreements to import uranium from Kazakhstan.

Gillard's overtures to India have met with resistance in Australia. Her announcement in India on Tuesday that Australia would award an Order of Australia to cricketer Sachin Tendulkar for his contribution to sports also sparked criticism.

Independent MP Rob Oakeshott said the special award, rarely given to non-Australians, should not be used for diplomatic gain, according to Australia's ABC News.

"I love Sachin Tendulkar, I love cricket. But I just have a problem with soft diplomacy as you call it... getting in on the act of the Australian honours," he said.