A deal for Australia to supply India with uranium could still be struck, even after Australia's recent confirmation that it will not be exporting the fuel to the sub-continent, reversing an agreement made by the previous government.

Exporting uranium to India "will not occur under the new government because we have a long-standing commitment of not exporting uranium, Australian uranium, to nations who are not party to the nuclear Non-Proliferation Treaty [NPT]," Australian

Foreign Affairs Minister Stephen Smith told reporters in late January during a visit to the United States.

Last August, the pre-general election Howard government broke from Australia's previously stated position on uranium exports by agreeing to supply uranium to India, which is not a signatory to the NPT.

The reversal of this agreement by Australia's current Labor government, which came to power in November under new Primer Minister Kevin Rudd, may yet be overturned, despite Labor's policy of exporting uranium only to signatories of the NPT, experts said.

"I think the answer is 'no' for now," said Robert Ayson, director of graduate studies in the strategy and defense program at the Australian National University. "The government can say that quite clearly at the moment because there are a number of things that clearly aren't finalized yet," he told Inter Press Service (IPS).

The agreement made by the Howard government was subject to certain pre-conditions being met. These requirements, which included India completing a safeguards agreement with the International Atomic Energy Agency, the approval of civil nuclear supply to India by the Nuclear Suppliers' Group, and the finalization of the "123" agreement between India and the US - have yet to be satisfied.

The 123 Agreement is an agreement under section 123 of the Atomic Energy Act, 1954. By virtue of this legislation, the United States of America, a sovereign state possessing nuclear weapons, seeks to commit non-nuclear weapon states to a nuclear weapons non-proliferation regime.

"The de facto NPT that the Americans and the Indians were, in a sense, trying to build around India hasn't really happened," said Ayson. "But if and when that de facto [NPT] is assembled around India, then it's possible that Australia might come back, even under a Rudd government, to re-look at that question."

Associate Professor Damien Kingsbury, from Deakin University's school of international and political studies, said Australia's official withdrawal from the uranium agreement will "certainly ruffle the feathers in India".

While the decision "shouldn't come as a terrible shock to India, I'm sure that given that there was an existing agreement the Indians will feel that any government in Australia should stick to that agreement," he said.

Kingsbury told IPS that if the India-US 123 agreement is concluded, then Australia - with an estimated 40% of the world's known uranium reserves - will be under pressure to participate.

"It may be that if the United States goes through with its deal with India that the Australian Labor government may actually say that they are beholden, at least to part of the agreement, and may allow part of that agreement to proceed," said Kingsbury.

An indication that Australia's position may be flexible, according to Rory Medcalf - a former Australian diplomat in India and currently director of the international security program at the Lowy Institute for International Policy - may be seen in its stance in the suppliers' group.

"Indian officials now interpret Canberra's public hints that it won't obstruct the US-India deal in the Nuclear Suppliers' Group as meaning that Australia will also come round to allowing its own uranium sales," writes Medcalf in Pragati.

But while India still appears unlikely, at least in the short term, to overcome domestic opposition in order to pass the 123 agreement, the south Asian giant is likely to continue to seek an expansion of its nuclear energy capabilities.

Ayson said that India, like all expanding economies, faces the challenge of finding the right mix of energy sources. "Simply for carbon-emission reasons, [India] can't rely simply on carbon-type sources," he said.

And with India's growing status as a regional power, Ayson argued that "under any government, I think Australia wants a closer relationship with India. And that's not been a relationship that's been particularly easy to build in the past."

Yet there is little doubt that the bilateral relationship has developed in recent times. Australia is now India's 10th largest trading partner while for India, Australia ranks ninth in terms of its trading partners. Total trade rose 32% between the two nations to A$11.4 billion (US$10.6 billion) in the last financial year.

In a visit to India in January, Australia's Trade Minister, Simon Crean, had discussions with India's Minister for Trade and Commerce, Kamal Nath, on how the two countries could work together in order to bring the World Trade Organization's Doha Round of talks to a conclusion.

Crean also conveyed Australia's willingness to have India invited to join the Asia-Pacific Economic Cooperation forum - a 21-member grouping of countries bordering the Pacific - and also held preliminary talks on a potential bilateral free trade agreement.

Ayson said that intensified India-Australia trade "will take care of one important part of the bilateral relationship ... But there is the political, security, strategic elements which remain kind of more open questions," he told IPS.

The Rudd government has already notified China that Australia will not be attending anymore so-called "quadrilateral" (US-India-Japan-Australia) security talks. Instead, Australia will continue its security dialogue with the US and Japan, but notably not with India.

Australia is also looking to take on a leadership role on nuclear issues. Foreign Affairs Minister Stephen Smith has spoken of the government's desire for Australia to be more committed "on nuclear non-proliferation and disarmament matters".

Smith has also called on the nine remaining countries whose ratification of the Comprehensive Nuclear-Test Ban Treaty is needed to bring the treaty into force, to do so.

To use uranium exports in order to forge closer Australia-India ties, the Rudd government would have to undertake a reversal of its own policy. "I think it would be a change. But not as big a leap as saying right now [that] we're willing to sell uranium to India," argued Ayson.

But while Australia wants a strong relationship with a growing India, "unfinished business over uranium could make the dawning of that relationship even more difficult", he said.