AUSTRALIA has left open the option of supporting international uranium sales to India, even though the Rudd Government has ruled out Australian yellowcake exports to the energy-hungry South Asian giant.

Foreign Minister Stephen Smith announced earlier this week that Australia would not sell uranium to India unless it signed the Nuclear Non-Proliferation Treaty.

But a spokesman for Mr Smith said yesterday that the Government has not yet made a decision on whether to block uranium sales to India by other countries — an option open to Australia and members of the 45-nation Nuclear Suppliers Group, which sets global export controls for nuclear materials.

Mr Smith risked Delhi's ire by junking the Howard government's decision last year to push ahead with a uranium export agreement in light of India's long-standing political stability and record as a responsible nuclear power.

This plays out in the shadow of a critical deal between the US and India to share civilian nuclear technology. The so-called 1-2-3 agreement is mired in opposition in the Indian parliament, but analysts warned yesterday if the deal took off again, the Rudd Government's reversal on uranium sales could have "quite serious" ramifications for Australia-India relations.

"In the longer term, it could emerge as a source of friction between India and Australia. But that would only occur if the 1-2-3 agreement were to go ahead," said Sandy Gordon, a South Asia specialist with the University of Wollongong.

Mr Smith's spokesman said Australia appreciated the significance of the US-India deal and would take that into account in the Government's response.