Australia has around 40 per cent of the world's known uranium reserves and this past week exactly which country that uranium can be sold to has become a major political football. The Howard Government has confirmed it wants to push ahead with selling uranium to India. Opposition leader Kevin Rudd has said he'll scrap the deal if elected. A similar agreement is on the table between India and the United States and there are fears if both go through, international non-proliferation efforts will be dead in the water. Tom Cooks reports.

Tom Cooks: Visiting the Indian Prime Minister 12 months ago, Australian Prime Minister John Howard made his position clear on uranium exports.

John Howard, Australian Prime Minister: We've had a policy for a long time of only exporting uranium to countries that adhere to the nuclear non-proliferation treaty and you're right, Mr Downer and I have both said there's no current intention of changing that policy.

Tom Cooks: But this week Australia has done an about face. The Government's national security committee has agreed in principle to sell uranium to India, even though India still refuses to sign the nuclear non-proliferation treaty.

John Howard, Australian Prime Minister: Can I say to the leader of the Opposition that I will be speaking to the Indian Prime Minister later today about issues relating to the possible supply of uranium to that country.

”We wouldn't sell uranium that could be used in any way at all for any military purpose.” Alexander Downer

Alexander Downer, Australian Foreign Minister: The Australian Government says there will be strict conditions on the deal. We wouldn't sell uranium that could be used in any way at all for any military purpose.

Tom Cooks: But arms control advocates have slammed Australia's decision, saying that it indirectly supports India's nuclear weapons program.

Daryl Kimball, (United States) Arms Control Association: India continues to produce nuclear bomb material. They've not agreed to legally binding test bans and the supply of uranium by Australia, or other countries, could indirectly give India a greater capacity to produce plutonium ….for its weapons program.

Tom Cooks: India says it needs Australian uranium not for military purposes but to satisfy its insatiable need for power as its industry rapidly expands.

Tarun Das, Confederation of Indian Industry: They're growing now at nine per cent GDP year on year. We're looking at 10 per cent plus growth. We need huge quantities of energy as we go forward and we need to conserve our environment.

Tom Cooks: Currently there are 15 nuclear power plants in India and a further eight under construction as well as a number of research reactors providing material for nuclear weapons.

”…we need this ability to set up nuclear power stations…” Tarun Das

Tarun Das, Confederation of Indian Industry: Right now it's a very, very small percentage. It's three per cent of our total power generating capacity but we want to take it to double digit and beyond and for that we will need to set up a number of new nuclear power stations and this is what the whole India-US agreement has been about - that we need this ability to set up nuclear power stations, we need international partnerships to do this and move away from our dependence on coal.

Tom Cooks: Earlier this week, there was uproar in the Indian parliament when a deal between US and India to cooperate on nuclear energy was discussed. Politicians from both the right and left of Indian politics protested that the so-called 123-agreement restricts India's ability to control both its civilian and military nuclear programs.

Tarun Das, Confederation of Indian Industry: A lot of it is, I would say, quote unquote, anti American sentiments, in the country but the Government is determined to go ahead with this. This agreement had been negotiated with great care over the last two years. Exactly two years, actually. And safeguards have been built in. If you look at our track record, we are a non-proliferator. We may not be part of the NPT (Non-Proliferation Treaty) agreement but we have followed the conditionalities, all the rules as it were, of an NPT member country.

John Howard, Australian Prime Minister (speaking in parliament): India does have a very good non-proliferation track record, Mr Speaker, so we think it worthwhile finding practical ways to bring it into the non-proliferation mainstream.

Tom Cooks: But not everybody believes that India's non-proliferation record is so strong.

”India has not transferred nuclear weapons' technology or material to other countries.” Daryl Kimball

Daryl Kimball, Arms Control Association: India has not transferred nuclear weapons' technology or material to other countries. But non-proliferation also means that you are exercising restraint with respect to your own nuclear weapons program. From that perspective, India has been one of the world's proliferators. India has conducted nuclear test explosions in 1974 and in 1998. India continues to produce plutonium for the purpose of building up its nuclear arsenal. These are non-proliferation obligations that India has not yet met.

Tom Cooks: As part of the uranium supply deal, India has agreed to allow international inspectors into its civilian nuclear facilities. But its military program will remain off limits.

Daryl Kimball, Arms Control Association: The Indian Government has made it clear that the separation of its military and civil sectors will not mean that scientists and engineers will not be able to move between these two sectors. So there is no firewall between these two sectors.

Tom Cooks: Surrounded by potential adversaries with their own nuclear programs, India believes it has no choice but to continue developing its own atomic weapons.

Tarun Das, Confederation of Indian Industry: For our own national security concerns, we need to have a strategic program on the nuclear side. The region has got nuclear capabilities all around.

Tom Cooks: But Daryl Kimbal says Australia's decision to sell uranium to India may come at the expense of its relations with its own Pacific neighbours.

”Australia would be violating itself, its South Pacific nuclear free zone treaty commitments, by selling uranium to India.” Daryl Kimball

Daryl Kimball, Arms Control Association: The South Pacific nuclear free zone obligates Australia and the other countries that are a party to that agreement not to engage in nuclear trade with any state that does not allow full scope, which is comprehensive international safeguards over all of their nuclear facilities. India is clearly not allowing that comprehensive safeguards approach and in my view, Australia would be violating itself, its South Pacific nuclear free zone treaty commitments, by selling uranium to India.