The negotiations marked a major policy shift for Australia which demands that all its uranium customers ratify the NPT, as well as ensure that radioactive material is neither put to military use nor passed on to a third country.

India is eager to secure supplies of uranium to fuel a soaring domestic demand for energy.

Smith said the Australian Labour party, which took power last year, has a "long-standing position" banning exports of nuclear material to countries which have not signed the NPT.

However, he later told the Australian parliament that Australia had undervalued India - a rapidly growing market for Australian minerals and energy - for the past 30 years.