KEVIN Rudd's troubleshooter on nuclear non-proliferation, Gareth Evans, says Australia could make a big contribution by entering the atomic energy fuel trade and taking back all waste derived from the uranium it sells.

The call by the former Labor foreign minister follows that from former ALP prime minister Bob Hawke last month that Australia had to assess a nuclear waste industry as a moral, financial and environmental response to climate change.

It defies the Rudd government insistence it will not take nuclear fuel waste, although Labor has yet to repeal Howard government legislation allowing a nuclear dump to be imposed on the Northern Territory.

In India at the weekend to chair a regional meeting of the Kevin Rudd-initiated International Commission on Nuclear Non-Proliferation and Disarmament, Mr Evans criticised last year's nuclear supply deal between the US and India for being "too soft" on India and weakening the Nuclear Non-Proliferation Treaty. His comments are sure to ruffle feathers on both sides of the Indian Ocean.

The Indian government is sensitive to the international community's refusal to admit it to the NPT club, and to the Australian government's persistent refusal to sell it uranium as a non-NPT signatory.

While Australia is one of the world's largest suppliers of uranium for nuclear power, the prospect of storing radioactive waste from other countries remains unpalatable to most Australians.

But Mr Evans said it was "difficult to argue with the principle that uranium producers should be responsible for the ultimate disposal of waste products that flow from them".

"It may be that in future it just comes with the territory of being a major uranium supplier - that more countries are going to accept that responsibility. That's not the same as being a repository for the entire universe," he said.

In the context of an expanding nuclear energy market, he said, it made sense for Australia to produce and sell nuclear fuel to new atomic energy entrants, perhaps as part of a consortium of countries contributing to a nuclear fuel bank.

"If we could somehow on a commercial basis - not an act of charity - ensure a reliable supply of enriched uranium for countries that might otherwise be tempted to acquire their own facilities with all the proliferation risks associated with that, it would be quite attractive."

Mr Evans conceded tensions between Pakistan and India posed the greatest risk that nuclear weapons could be used, or fall into the hands of terrorists.

Both countries had expressed a willingness to sign the NTBT if the US and China agreed to do so.