Australia said on Monday it would consider uranium sales to India if New Delhi was able to strike a landmark nuclear pact with the United States and satisfy international concerns about safeguards.

The new centre-left Labor government was closely watching so-called 123 negotiations, although it would not sell yellowcake to countries that had not signed the Non-Proliferation Treaty (NPT), Foreign Minister Stephen Smith said after meeting his Indian counterpart Pranab Mukherjee in Canberra.

If and when the 123 Agreement gets to either the International Atomic Energy Agency or the Nuclear Suppliers Group (NSG), Australia will then give consideration to what its attitude to that agreement is, Smith told reporters.

Australia has 40 percent of the world's known reserves of uranium and exports to 36 countries. India has been lobbying Canberra for access to it, despite not having agreed to the NPT.

India is trying to convince the 45-member NSG, including Australia, to back a waiver on trade with non-NPT members to allow sale of nuclear material, as well as strike agreement with the IAEA on safeguards. We will bear in mind the view and the arguments, and the importance of the issue to India, when we come to that consideration, Smith said, pointing to Australian backing for an NSG waiver in the case of yellowcake sales to India.

Australia and India had good track records on nuclear disarmament, both Smith and Mukherjee said, likening the possibility of uranium exports to catching a train with no firm timetable for arrival.

When we require uranium, naturally if the entire process is completed, the nuclear trade with India is permissible ... then and then only the question will come, Mukherjee said.

Nuclear power currently contributes 3 percent of India's energy needs, growing to 9 percent by 2016 provided agreements with the United States and the suppliers group are successful.

Smith and Mukerjee said they would work for closer Australia-India economic and security ties, signing agreements to combat terrorism, begin yearly defence and intelligence talks, and allow extradition of criminals.

With two-way trade worth $10 billion in 2007, mostly gold and coal exports from Australia, Mukerjee said a report into a free trade pact would be completed by December. Both nations were also working to lift Australian resource exports to India, he said.

Not enough appreciation has been given to the rise of India, Smith said. New Delhi, he said, should be a member of a expanded and reformed United Nations Security Council.

Australia recently vetoed Indian participation in yearly trilateral security talks between Japan, the United States and Canberra, wary of antagonising major trade partner China, which expressed anger over efforts to contain its growing influence.

Mukherjee said he was not concerned as India was involved in many international forums, and had taken informal part in early trilateral talks in the Philippines.

We would like to examine in greater detail how it proceeds, Mukherjee said. (Editing by Jerry Norton)

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