India's quest for nuclear energy received a major setback in early 2008, when the Australian Foreign Minister, Stephen Smith, officially declined to supply uranium to India. However, things took an interesting turn when the same government reaffirmed the Howard government's stand of supplying uranium to China. Uranium sales to China will begin in 2010 with Australia supplying 20,000 metric tons of uranium every year. This would help energy-hungry China meet its demands for nuclear energy.

While reaffirming the uranium sale to China, Canberra officially accepted that China's proliferation record has gone down in recent years, in effect, accepting also that China has been proliferating nuclear technology to non-nuclear weapon states. China has not only been sharing the nuclear secrets with Pakistan, but with Iran and North Korea also, thereby violating Article I of the NPT provision. Such a response from Australian government is not only confusing but also shows that India is being discriminated against on this issue.

Professor Hugh White of the Australian National University (ANU) says that Australia's stand on uranium supply to India is based on two policy issues and the way both the Howard government and the Rudd government responded to them. First and most important, is Australia's view of the strategic scenario in the Asia-Pacific. The Howard government's decision to support the sale of uranium to India was primarily a decision to support the policy of the Bush administration. Australia's support to the Indo-US nuclear deal was part of this agenda. Conversely, the Rudd government's opposition to uranium sales to India is a reflection of its ideas about how Asia's strategic future should be handled. It believes that engaging China in a constructive manner is the better option.

The second influence on the Rudd government's policy is its support for the non-proliferation regime and the NPT in particular. Here however, India's stand on NPT cannot be pointed out as the main reason as India been abiding by the NPT norms in spirit despite not signing the treaty.

Professor Sandy Gordon, also of the ANU, looks at this issue differently. He argues that Australia's denial of uranium to India has more to do with the internal disagreements within the ruling Labor Party government, rather than marking a disagreement with the Bush administration. Gordon believes that Australia's decision depends on the way India and the US proceed with their proposed civilian nuclear agreement. If the Indo-US nuclear agreement becomes a reality, the Rudd government would perhaps need to reconsider its present decision.

After 31 years of hibernation as a 'nuclear outcaste' India made a comeback on 18 July 2005, when the US and India agreed on civilian nuclear energy cooperation. The Indo-US nuclear deal is in some ways an attempt by the US to reward New Delhi for its excellent non-proliferation record and to differentiate between India on the one hand and countries like Pakistan, Iran and North Korea on the other. Other nuclear weapon states (NWS) are following suit as India looks to enhance cooperation with France and Russia and non-NWS like Canada on the nuclear energy front. This is a clear indication of the fact that India's credible nuclear non-proliferation record is not only appreciated but rewarded as well. There is, however, a dire need for India to work together with Australia on the nuclear front as Australia commands 40 per cent of the world's total uranium resources. Nuclear cooperation with Australia would certainly help India meet its energy requirements as its economy grows.

The availability of poor quality coal in India, together with the fact that nuclear plants in India are mostly sub-critical and inefficient, implies that in the absence of assured supply of uranium, India's energy generation mix will become increasingly carbon-emitting. India's energy needs, if fulfilled through fossil fuels would not only damage the environment but also be costly for India compared to nuclear energy which is clean and cost-effective.

India's moratorium on the military nuclear programme is a matter of choice rather than compulsion as India has enough thorium to go ahead with further nuclear testing. Besides, when similar apprehensions were raised about China by environmental and opposition groups in Canberra, the Rudd government responded by saying that the agreement with China establishes strict safeguard arrangements and conditions to ensure that Australian uranium supplied to China is used exclusively for peaceful purposes. Australia could do the same while sitting across the table with India and negotiate on the uranium issue, demanding tighter control and vigilance and a well-defined separation of civilian nuclear facilities from the military ones.

The world has to come to terms with the fact that nuclear India is a rising power and it cannot be marginalized any more, says Prof. Marika Vicziany of the Monash Asia Institute. She believes that in a year or two Australia too would reconsider its decision of not selling uranium to India and both the democracies would deepen their ties through the cooperation on nuclear issues. The Rudd government's recently launched nuclear disarmament agenda too is compatible with India's appeal for "general and complete disarmament." The vision of a peaceful and democratic 21st century world will only be helped along if Australia engages India in a more constructive manner.