According to Industry Minister, Ian Macfarlane, a final decision however on selling the nuclear fuel has yet to be made and is pending the outcome of the U.S.-India talks. India will need to sign a safeguards agreement with Australia before exports are allowed, he told Bloomberg.

Australia, holder of the world's biggest known uranium reserves, has previously refused to sell the nuclear fuel to India as the South Asian nation isn't a signatory of the Nuclear Non-Proliferation Treaty.

Australia and China earlier this year ratified an agreement paving the way for A$250 million of uranium shipments to China.

"India has an impeccable record in terms of nuclear non- proliferation and there will be a very straight and very strict requirement in terms of the signing of a safeguard agreement between Australia and that country," Macfarlane said.

"We are at the moment waiting for the conclusion of the negotiation between the U.S. and India in terms of their nuclear agreement. On that basis cabinet will then consider it, he said."

The U.S. and India have spent almost two years negotiating a civilian nuclear accord, which would allow U.S. nuclear technology and fuel to be sold to help the Indian government supply its power industry.

The opposition Labor party, which leads the government in opinion polls ahead of a general election expected later this year, opposes uranium shipments to India unless the South Asian nation signs up to the Non-Proliferation Treaty (NPT), said Chris Evans, Labor's resources spokesman.

"I think the flirting with selling to India without them signing up to the NPT is highly dangerous," Evans said. "I think major producers understand that any breakdown in the NPT and those international safeguards will seriously undermine public confidence and support for uranium mining."

The Australian Greens also oppose uranium shipments to India, as well as to China and Russia, according to Senator Bob Brown, leader of the party. "The Howard Government will try to use the emerging US-India deal as an excuse to initiate uranium exports to India, but this deal is an absurd parody of non-proliferation protection, not an effective safeguard," said Christine Milne, climate spokeswoman for the Greens.

The Australian federal government will take legal advice on whether it may have the power to overrule bans on uranium mining licenses in the Labor-controlled states of Western Australia and Queensland, Macfarlane said. The Federal Labor party in April voted to end a "no new mines" policy, yet Western Australia and Queensland have reiterated they won't allow uranium mines.

"Once we have that advice we will then consider whether or not common sense will prevail at a state level and whether or not we're in a position to use it," Macfarlane said.