What does it mean when a country holding almost 40 percent of the world’s known uranium reserves, decides to review and consequently lift its ban on nuclear trade with India? This suggested policy u-turn on part of Australia, has been viewed as a result of the political influence and visit of US president Barack Obama, who was in Canberra recently. While Obama has denied putting any pressure on the Australian prime minister Julia Gillard, the Australian resources minister Martin Ferguson stated that it was time Australia recognized and accepted India as a  “responsible nation.”  Nonetheless, this policy shift, as it unfolds itself in future, is going to be a major highlight in New - Delhi’s nuclear politics since the US-India Nuclear deal in 2008. This, however, is not a mere policy u-turn but should be viewed as a result of immense nuclear diplomacy that India has engaged in, specially since 2001.

Indeed, as Obama stated “India is a big player and the Australia-India relationship is one that should be cultivated.” However, a pertinent question is that apart from providing support to India’s growing energy needs, what does this uranium sale really mean for India’s status in particular and for international politics in general? Secondly, how does this affect a nuclear regime that is premised on norms of non-proliferation and (at some point) total disarmament by those states that possess nuclear weapons?  The purpose of this article is not to condemn or endorse trade with India, but to draw attention to the politics that surrounds this economic rationale of trade.

To answer the first question, the justification of nuclear trade with India in the past and as PM Gillard stated is something that  “seemed to be compatible with international law and the NPT (Non-Proliferation Treaty)” has only led to a further legitimation of India’s status as a nuclear weapon state (NWS). While the US-India nuclear deal in 2008, as Gillard stated in an interview, “effectively lifted the de-facto international ban on cooperation with India in this area,” importantly, it also further endorsed recognition of India’s emerging identity as a de-facto nuclear state. Ironically, this recognition and support defies the basic rationale of a non-proliferation regime that seeks to prevent the proliferation of nuclear weapons by and to any states.

India is viewed not only as a viable business partner in South - East Asia but also implicitly is an important balancing partner (vis-a-vis China) and explicitly is an influential mediator (in context of Iran), especially for the United States. India, given its strong past relations with Iran, is viewed as a strategic partner in putting pressure on Iran’s clandestine nuclear programme, that continues to upset and worry the rest of the world, primarily the United States. Several ‘soft’ clauses to align India with U.S. views over Iran were incorporated in the Hyde Act. India also supported the International Atomic Energy Agency (IAEA) resolution that prevents Iran from developing a uranium-enrichment facility in secrecy and to open its sites completely to IAEA inspections and investigations. Again in 2009, India’s vote in IAEA resolution was welcomed by the US as a critical step to prevent Iran from developing a uranium-enrichment facility in secrecy. Most recently the IAEA’s governing council adopted a resolution on November 18, expressing “deep and increasing concern about the unresolved issues regarding the Iranian nuclear program” and U.S. secretary of state Hillary Clinton stated, “...we will work with our international partners to increase the pressure on Iran's government until it decides to meet its international obligations.” Indeed, the US amongst other nations sees India as one such important international partner.

In response to the second question, India’s recognition as a responsible nuclear power unlike let’s say an Iran, has allowed for differentiating between “good states” and “rogue states” within the nuclear regime. It has furthered the belief, as Richard Price states, ‘Nuclear Weapons Don’t Kill People, Rogues Do.’ This distinction is made based on overt and covert intentions, which itself relies on differentiating between civilian “peaceful” use and military use by placing the former under safeguards thus permitting peaceful cooperation for nuclear technology. An implication of this distinction, as Price takes note, is to ‘remove nuclear weapons themselves as the referent of threat and transfer it to particular potential possessors and users of the threat’ (Price, 2007:243). This rejects the very premise of the regime that regards nuclear weapons as ‘non-conventional weapons’ and thus inherently illegitimate.  Moreover, since India never actually signed the NPT, thus technically it has not been in violation of it, which makes for India’s recognition as a legitimate nuclear power easier without upsetting the constitutive norm of the NPT.

We are yet to see the full implications of these new developments, apart from the immediate reaction of Pakistan saying “Why not us?”.  However, what is interesting is the process whereby so-called policy shifts, u-turns or anything else it might be designated are justified and proposed in context of the norms of regime itself. The nuclear regime is an interesting case that offers insights into the interlinkages between the economics and the politics of trade and it’s eventual impact on the inter-relations between nations.