US-India nuclear deal affecting Australia faces delay

A GROUND-BREAKING nuclear co-operation deal between India and the US, with significant policy implications for Australia, may not be examined by the world's powerful nuclear club until late this year.

It had been expected that the Nuclear Suppliers Group would consider the controversial deal at its Cape Town meeting next month, but is now looking more likely the group will consider it at a one-off meeting later this year.

The US needs backing from the group before its deal with India proceeds, and views within the 44-member organisation are mixed.

France, Russia and Britain have backed the co-operation agreement. While no formal decision has been made, Canberra is also likely to back Washington in the group, heralding a major shift in Australian policy on uranium sales.

The Bush Administration has been lobbying extensively to secure the Federal Government's endorsement for the deal, which would allow uranium sales to India despite it not being a signatory to the Treaty on the Non-Proliferation of Nuclear Weapons.

It is likely Washington will win Australia's explicit endorsement in the group if India negotiates a bilateral deal with the world's nuclear inspectorate, the International Atomic Energy Agency, subjecting its power plants to the agency's inspection regime. So far, insiders say there is little visible progress on India reaching that agreement.

Prime Minister John Howard has signalled that he is willing to consider a change in policy, but so far the Foreign Minister Alexander Downer has been more cautious, saying there are no "current" plans to change stance. Australia does not traditionally supply uranium to non-signatories of the treaty.

Any shift in Australian policy would be a boon for major Australian resources companies, which have been eyeing India's lucrative energy market.

Executives from mining giants BHP Billiton and Rio Tinto were in India late last month with Australia's Trade Minister Warren Truss as part of a large delegation of Australian business leaders.

source news : theage.com.au