Australia has created more dismay over it's attitude to India, after approving uranium sales to Russia but leaving India subject to a ban.

The ban is the policy of the ruling Labor Party and so is the policy of the Rudd Labor government too and it applies to countries like India that have not signed the Nuclear Non-Proliferation Treaty.

In contrast, Australia's previous Liberal government received international standard safeguard agreements from India and thus had cleared the way for uranium sales.

Indian companies are lining up to invest in Australia's massive uranium deposits, but while they may patiently take a long term view, others say the policy position makes no sense.

Presenter: Linda Mottram 
Speakers: Senator Nick Minchin, Australian Opposition spokesman on Resources and Energy; 
Simon Crean, Australian Trade Minister; Brian Hayes QC, National Chairman Australia India Business Council, South Australian special envoy to India

MOTTRAM: The Saudi Arabia of uranium is one characterisation of Australia with its 23 per cent of the world's uranium reserves, more than any other single country.

But in particular Labor Party policy over the years has been an obstacle to development of Australia's uranium industry. Last week, a Labor government .. the Federal Labor government in Canberra .. took another step in the evolution of its attitude to uranium by rejecting a Parliamentary committee recommendation and approving uranium sales to Russia. It had already decided it would sell uranium to China. There are arguments about the merits in both cases. And once again, with the Russia decision, Canberra has highlighted a sore point with another country, India.

MINCHIN: It doesn't make any sense at all, it's utter hypocrisy on the part of the Labor Party.

MOTTRAM: Senator Nick Minchin is the Australian Liberal Opposition's Resources and Energy spokesman.

MINCHIN: Back in the 1980s, the Labor party was more than happy to sell uranium to France and they hadn't signed the treaty. The fact is, the Howard Government came to an agreement with India for the sale of uranium according to the strictest safeguards in the world and that agreement should be complied with. 

CREAN: India is not a signatory to the Nuclear Non-Proliferation Treaty. 

MOTTRAM: Australia's Trade minister Simon Crean. But a strategic analyst at the Australian National University, Dr Ron Huisken, says India can't sign the Non-Proliferation Treaty.

HUISKEN: There's no way that they can do that without scrapping their entire nuclear weapons enterprise and convincing the international community that they have no capabilities left and no intentions to acquire future ones and nothing's going to persuade them to do that.

MOTTRAM: Industry figures say Indian companies take a long view of this issue. There is at least one major uranium exploration joint venture in Australia with an Indian firm. Others are lining up to invest not only in Australia, but also Canada and parts of Africa, as India seeks to secure particularly low carbon emissions energy supplies to fuel it's development. It's main competitor in those markets is China.

Patient though those companies may be with Australia the current exclusion of uranium sales to India fuels resentment and concern that Australia does not hold India in high enough esteem, despite diplomatic declarations to the contrary. Brian Hayes QC is national chairman of the Australia India Business Council and the South Australian government's special envoy to India promoting business and trade. His personal view is that the Australian government's position makes no economic sense for the country and has major inconsistencies.

HAYES: As I understand it when India applied to the nuclear suppliers group, Australia was active in its support to enable India to get a waiver to enable it to purchase uranium from members of the NSG. And given the Labor Party's very strong policy of climate change and doing everything it possible can to reduce global emissions, India is just seeking to do exactly that with it's nuclear power stations.

MOTTRAM: Brian Hayes says it's never been suggested that India would breach any undertakings it would have to give were it to be allowed to buy Australian uranium and he points to other's who've moved on over the issue.

HAYES: Canada had the same policy as Australia but it changed that this year and it did so expressedly by saying that look, circumstances have changed since the 1970s when they had the policy and when Australia instigated this policy.

MOTTRAM: Part of the academic argument is that Australia seeks to uphold the non-proliferation treaty and that it would be inappropriate to put that to one side for any one country. Surely Australia does have that obligation?

HAYES: Well yes it does but if Australia is satisfied that the objectives of non-proliferation are being achieved notwithstanding the failure to sign the treaty then why would you insist on signing a treaty which it knows India won't sign and as I understand can't be expected to sign because it already has nuclear weapons and would be required to forego those nuclear weapons.

MOTTRAM: India will continue to lobby for change but if it's to come from the current government, it would would first have to be approved by a Labor Party national conference and there's one of those due in 2011, after Prime Minister Kevin Rudd faces Australian voters.