Progress on India-Canada nuclear cooperation accord

India has announced plans to establish 12 new nuclear power reactors by 2021 to help meet its industrial growth and burgeoning energy needs. It has been estimated that such an increase in nuclear energy capacity will require some 1,500 additional tonnes of uranium each year.

Canada is uniquely positioned to work with India in helping to meet this demand. Canada is the world’s second largest producer of uranium (after Kazakhstan) and produces over 10,000 tonnes of uranium per year, accounting for approximately 30% of annual global uranium production. This Canadian uranium is produced almost exclusively in Canada’s mid-western province of Saskatchewan, which exports some 8,000 tonnes of uranium per year to nuclear facilities in the United States and other parts of the world.

Saskatchewan is already one of Canada’s largest exporters to India (including lentils and other pulses and agricultural products) so economical shipping and trade routes are well established. In addition, Canada has several significant new uranium mines that are expected to be ready to start production within the next couple of years, further boosting Canada’s uranium export capacity.

History overcome

While nuclear collaboration between Canada and India has had a troubled history – Canada ended nuclear trade with India in 1976 when India tested its first nuclear bomb using plutonium from a Canadian test reactor – economic and bilateral relations between the two countries now are at a record high. Both governments have made nuclear cooperation a renewed focal point of their trade and economic partnership discussions.

Indeed, a strong case can be made for the nuclear agenda to be front and centre in the new relationship between India and Canada. India’s unprecedented and burgeoning demand for electricity is currently undersupplied, even with more than 205,000 megawatts of electricity in production. The majority of that electricity is currently produced from non-renewable sources such as coal, gas and oil, and the focus of the government’s energy policy is to shift as much new production as possible to renewable and more environmentally friendly energy sources.

India’s plan to establish 12 new nuclear power reactors within the next decade is a key part of that energy policy.

Can do CANDU

Many of India’s existing nuclear facilities (including those designed and constructed by India) are based on Canadian CANDU nuclear reactor technology from the earlier period of collaboration between Canada and India, and India’s nuclear scientists and engineers are therefore proficient in CANDU technology. This, coupled with Canada’s abundant supply of uranium, makes the nuclear agenda between India and Canada a natural part of the renewed economic partnership between the two countries.

A formal agreement on nuclear cooperation between India and Canada, titled the Agreement for Cooperation in Peaceful Uses of Nuclear Energy, was signed more than two years ago, but its implementation has lagged as governmental agencies work through details.

In November of 2012, during a visit by Canadian prime minister Stephen Harper to India, prime ministers Harper and Manmohan Singh announced that they had made significant progress in clearing the final hurdles, including arrangements for the International Atomic Energy Agency (IAEA) to monitor the use of uranium to ensure non-proliferation beyond peaceful uses.

Step forward

This April marked an important step towards full implementation of the India-Canada Nuclear Cooperation Agreement. In early April, India’s Department of Atomic Energy and the Canadian Nuclear Safety Commission announced that they had finalized arrangements allowing for the export of nuclear equipment and fuel from Canada to India for energy use.

These arrangements are an important milestone as they will allow Canadian companies to export controlled nuclear equipment, technology and materials (including uranium) to India for energy (and other peaceful uses) in accordance with Canada’s nuclear non-proliferation policy and under safeguards applied by the IAEA.

The insertion of IAEA monitoring and safeguards will also give Indian companies comfort that neutral and globally accepted standards will be employed and should help India gain broader acceptance as a significant player in the global nuclear power sphere.

As discussions between India and Canada on an overall economic partnership continue to make significant headway, it is interesting and heartening to see that a decades old dispute between the two countries on the nuclear issue has given way to a renewed friendship and spirit of cooperation.

Raj Sahni is a partner and chair of the India Business Group at Bennett Jones LLP, a law firm with offices in Calgary, Toronto, Edmonton, Ottawa, Dubai, Abu Dhabi and Doha, and representative offices in Washington DC and Beijing.