"It's a long standing commitment of the Australian Labor party that we don't authorise the export of uranium to countries who are not parties to the Nuclear Non-Proliferation Treaty," Smith said after the talks.
 
"India is a nation state that is not a party to the Non-Proliferation Treaty. I don't think there's any expectation in the international community that it will become a member."
 
Saran did not comment after the meeting, but Smith said he did not seem not surprised by the position.
 
The deal was struck by John Howard, the former Australia prime minister, in August, shortly before his conservative government was beaten in elections by Kevin Rudd's Labor party.
 
Howard had defended his government's decision to sell uranium to India - which has nuclear weapons - saying the deal was subject to strict guarantees that the fuel would be used for electricity generation only.
 
He had also said the sale would depend on the implementation of a civilian nuclear deal between New Delhi and Washington.
 
Under that deal, which has yet to be passed by either side, the US agreed to supply India's civilian reactors with nuclear fuel or find another supplier.
 
NPT exception
 
Australia has a deal to sell uranium
concentrate to China [EPA]
That would have allowed India to buy civilian nuclear technology while possessing nuclear weapons, making it an exception under the NPT.
 
Anti-proliferation activists said the US-India deal would have freed up India's existing uranium stock for military use.
 
Australia has the world's largest known reserves of uranium and had been under US pressure to match a deal to sell uranium concentrate to China - which has signed the NPT – by agreeing to a similar deal with India.
 
Analysts said Australia's turnaround was a setback for India but it would not cripple its programmes.
 
"Australia has one of the largest reserves of uranium but there are other nations which also have it," K Subrahmanyam, a former member of India's National Security Council, said.
 
On Tuesday, Manmohan Singh, the Indian prime minister held out the possibility of civilian nuclear co-operation with China, which had been one of the critics of the US-India deal.
 
On the last day of a visit to China, Singh said the world's two most populous nations should work together to develop their nuclear energy programmes.