HighLights
  1. India-Australia sign uranium supply agreement for nuclear power.
  2. Deal boosts India's clean energy goals, under IAEA safeguards.
  3. Australia to export uranium, supporting India's energy security.

India and Australia on Thursday signed an important uranium supply agreement during Prime Minister Narendra Modi’s visit to Australia. The agreement is a major step in strengthening energy cooperation between the two countries. It will help India meet its growing electricity needs, expand clean nuclear energy and support its long-term goal of increasing nuclear power capacity.

India-Australia Energy Partnership

Both countries completed the administrative arrangements needed to allow the export of Australian uranium to India under the Australia-India Nuclear Cooperation Agreement (2015). In an official statement, India noted that the uranium will be used only for peaceful civilian purposes and will remain under International Atomic Energy Agency (IAEA) safeguards.

“Australia and India have finalised the administrative arrangements necessary to enable the export of Australian uranium to India for exclusively peaceful purposes and under International Atomic Energy Agency (IAEA) safeguards, as provided for under the Australia-India Nuclear Cooperation Agreement (2015),” the statement from PMO read.

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The agreement is considered a major step in supporting India's nuclear energy programme. After the talks with Australian Prime Minister Anthony Albanese, PM Modi said, “We have signed an important agreement today on nuclear energy." He added that Australian uranium would give India’s clean energy goals “fresh momentum.” Albanese also welcomed the deal, saying, “The arrangement facilitates Australian uranium exports to India, to help increase the share of non-fossil fuel power capacity.”

Why Does India Need More Uranium?

India is the world's fastest-growing major economy and has a rapidly increasing demand for electricity. More power is needed because of industrial growth, electric vehicles, data centres, and improving living standards. At present, coal produces nearly three-fourths of India's electricity. To reduce pollution and meet climate goals, India wants to increase the use of clean energy, including nuclear power.

Why Is Australia Important?

Australia has about 28 per cent of the world's known uranium reserves, making it the largest holder of uranium resources. However, Australia does not use nuclear power itself and exports its uranium.

For many years, Australia did not sell uranium to India because India is not a signatory to the Nuclear Non-Proliferation Treaty (NPT). Although India and Australia signed a civil nuclear cooperation agreement in 2014-15, this latest arrangement is expected to enable regular long-term uranium exports.

Why Does The Deal Matter For India?

India has uranium deposits in states such as Jharkhand, Andhra Pradesh, Telangana, and Rajasthan. However, much of this uranium is low-grade and costly to extract. Domestic production is not enough to meet the country's growing needs, so India imports more than 70 per cent of its nuclear fuel.

Australia's uranium will help India reduce the risk of fuel shortages and diversify its imports. Also, the contract is India's third major uranium deal in a short time. India had earlier signed a similar deal with Kazakhstan on February 24 and Canada on March 4. Most of the uranium in India is sourced from Uzbekistan and Russia.

How Will The Deal Support India's Nuclear Growth?

India plans to expand its nuclear energy capacity to 100 GW by 2047. The current capacity is 9 GW. India currently uses around 1,500-2,000 tonnes of uranium every year. As nuclear power capacity expands, this requirement is expected to increase to around 5,400 tonnes annually. Even if domestic uranium production increases, it is expected to meet only about 30 per cent of future demand. Therefore, long-term imports from countries like Australia remain essential.

India's Three-Stage Nuclear Programme Goal

The long-term goal of India is to develop a three-stage nuclear program. This program will eventually use thorium, and India already has abundant reserves of it. The first stage is currently operational with nuclear reactors that use uranium. For the second stage, a prototype fast-breeder reactor is nearing completion in Kalpakkam, Tamil Nadu. The third stage, using thorium as the main fuel, is still in the planning and development phase.

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