Conservative leaders Tony Abbott and Narendra Modi sealed a long-awaited nuclear energy deal on Friday, paving the way for Australia to sell uranium to India crippled by power shortages and blackouts.
The two prime ministers hailed the agreement as “a concrete symbol” of strengthening ties following their talks in the Indian capital.
The agreement signing came at the end of Abbott’s two-day trip to India to meet fellow right-wing leader Modi who rode to power in May on pledges to revive and reform India’s ailing economy, including by tackling its vast power problems.
“The prime ministers affirmed their commitment to strengthening the bilateral strategic partnership and taking it to a new level of mutual trust,” a joint statement said.
Modi called the agreement a “historic milestone” in the two countries’ relationship that would help provide clean energy to India’s 1.25-billion people.
India and Australia kick-started negotiations on uranium sales in 2012 after Canberra lifted a long-time ban on exporting the valuable ore to New Delhi to meet its ambitious nuclear energy programme.
India, which is heavily dependent on coal, is struggling to produce enough power to meet rising energy demand as its economy and large middle-class expand.
Nearly 400 million Indians still have no access to electricity, according to the World Bank, and power outages are common.
India wants to ramp up the number of nuclear plants from the 20 operating at six sites. The country derives less than two per cent of its total power capacity from nuclear sources.
Although two-way trade last year was only $15 billion, the new deal, along with a massive coal mine approved in Australia for one of India’s biggest conglomerates, was a sign of future cooperation and potential, Abbott said.
“We (Australia) have been an utterly dependable source of energy security, resource security and food security,” Abbott told Indian business leaders earlier Friday.
“I hope that we can become an utterly reliable source of energy, resource and food security for India too,” he added.
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