Australia could consider joining the nuclear supply group (NSG) and the International Atomic Energy Association in arriving at a consensus to provide uranium to India, if the the 123 agreement with the US is ratified by Parliament.

“The Labour Party has a strong policy of not exporting uranium to any country that has not signed the nuclear non-proliferation treaty (NPT). We have made this clear to Indian officials that we are bound by the party policy. But if the 123 agreement is passed by Indian Parliament we could consider joining a consensus of the NSG and IAEA,” the Australian Foreign Minister, Mr Steve Smith, told a group of Indian journalists on a trip sponsored by the Australian Department of Foreign Affairs and Trade.

Mr Smith was responding to a query why the Australian Government had changed its policy on uranium supply for Indian power plants after the Labour Party-led Government under Mr Kevin Ruud came to power in December last.

The statement assumes significance as it comes on the heels of the Centre conceding that uranium shortage was affecting the functioning of nuclear plants in the country, especially the Rajasthan Atomic Power Plant. Section 123 of the US Atomic Energy Act of 1954 makes it mandatory to sign an agreement for co-operation as a prerequisite for nuclear deals between Washington and any other nation.

“We see our party policy and India not being a signatory of NPT as separate issues. We have made this clear to the US and Indian authorities. We don’t see our party policy automatically preventing us from joining the consensus of NSG and IAEA,” Mr Smith said.

“We will wait for the 123 agreement between India and the US to emerge and then make a judgment,” he said, adding that high-ranking Indian officials have all been appraised of the Australian position.

“Both the nations have differences over the issue of uranium supply. But it is not disturbing the fundamental relations between us,” he said, adding that Australia was in favour of India being given a permanent seat in the United Nations Security Council.

Mr Smith said Australia was interested, strategically, in India’s rise as a nation of economic importance. Australia favoured a high-level relationship with India and Mr Ruud was likely to visit New Delhi either this year-end or early next year.

Before that, there could be an exchange of visits between Mr Smith and the Indian External Affairs Minister, Mr Pranab Mukherjee.

Mr Smith said there was potential for trade in more commodities between the two countries and not just in mineral resources, services and capital investments. Stating that there was potential for people to people exchange, he said Australia saw potential for providing liquefied natural gas and clean coal technology to India.

“There is also capacity with India to export more to Australia,” he said. To a question on fears being expressed by the Australian mining industry over increasing investments by Chinese companies in Australia, he said investments were judged by whether they were in national interest. He also said Australia would like the commodities of the bilateral trade basket to expand. Currently, Indian exports are around $1.3 billion against Australia’s $10.3 billion. Australia’s exports to India comprise mainly gold, copper and coal which make up for 80 per cent of the basket.

On the free trade agreement between India and Australia, Mr Smith said a feasibility study had been done a couple of years ago and if a pact is signed by 2010 as stated by the Indian Commerce and Industry Minister, Mr Kamal Nath, it would be good.