Melbourne: Australia's ruling Labor party on Sunday backed Prime Minister Julia Gillard's bold move to overturn a longstanding ban on uranium sale to India, paving the way for removal of a major irritant in bilateral ties.

Delegates at the Australian Labor Party's (ALP's) national conference in Sydney favoured Gillard's decision to open up uranium sale to India despite the country being a non-signatory to the NPT after a passionate discussion on the issue, with 206 members voting in favour and 185 against.

With opponents of the move citing the Fukushima nuclear disaster that rocked Japan following a massive quake and tsunami in March, Gillard, while moving the motion in this regard, said approving the plan would boost trade and enhance Australia's relationship with India.

"We are at the right time in the history of the world to seize a new era of opportunity in this, the Asian century," Gillard said. "We need to make sure that across our regions we have the strongest possible relationships we can, including with the world's largest democracy, India."

She said it was not rational that Australia sells uranium to China but not to India.

"We are not a political party that shirks hard decisions," Gillard said. "At this conference we should take a decision in the national interest."

She argued that Australia could sell uranium to India without breaching its obligations under the Nuclear non-Proliferation Treaty.

Gillard said any agreement to sell uranium to India would include strict safeguards to minimise proliferation risks.

"Let's just face facts here -- our refusal to sell uranium to India is not going to cause India to decide that it will no longer have nuclear weapons," she said.

"We can honour the treaty, we can change our platform, we can -- under the most stringent of agreements -- sell uranium to India if we so choose and, delegates, I believe that we should make that choice," Gillard said.

The policy change was supported by Resources Minister Martin Ferguson, Defence Minister Stephen Smith and South Australian Premier Jay Weatherill.

However, the decision was opposed by some of the party members including Stephen Conroy, Tanya Plibersek and Peter Garrett.

Before the vote on the issue, Garrett said it is too dangerous to sell uranium to India because it has not signed the NPT.

Labor Senator Doug Cameron said: "Prime Minister, you are wrong; ministers, you are wrong" in approving the move. "Forget all the arguments about jobs, it's a sideshow."

Federal Infrastructure Minister Anthony Albanese, who also opposed the move, said, "It is the case that nine months after the Fukushima nuclear disaster is not the time to be expanding our uranium exports."

Albanese said the fact that India had not signed the NPT and that nuclear waste was difficult to deal with were "two unresolved issues".

"I say that until we have resolved the issues of nuclear proliferation and we have resolved the issue of nuclear waste we should not change our platform to further expand our commitment to the nuclear fuel cycle," he said.

Smith, who favoured Gillard's plan, said any sales would be overseen by international nuclear regulators.    

"The world changed on this matter in 2008 and 2009 and today the Labor Party needs to change as well," he said.

Gillard had announced on November 15 her plans to lift the ban on uranium sale to India, saying "India is our fourth biggest export market, a market worth nearly USD 16 billion to Australia, with enormous potential to grow as India becomes wealthier."

Australia is the world's third largest supplier of uranium, which contributed more than USD 750 million to its economy and created more than 4,200 jobs.

India is expected to increase its use of nuclear power from the current 3 per cent of electricity generation to 40 per cent by 2050, Gillard had noted while announcing her move.

Gillard had also discussed the issue with Prime Minister Manmohan Singh on the sidelines of the East Asia Summit in Bali in Indonesia last month.

US President Barack Obama, who visited Australia before attending the East Asia Summit in Bali, had also backed Gillard's plans to sell uranium to India, saying it "seemed to be compatible with international law and the NPT".

"India is a big player and the Australia-India relationship is one that should be cultivated," Obama had said.

Meanwhile, Australian Workers' Union National Secretary Paul Howes said the NPT was a "dead-letter treaty".

"(It's) a treaty which has not stopped the proliferation of nuclear weaponry," he said. "I believe the 400 million people who live in India without power deserve the right like we do to have powered homes and schools and hospitals."

Australia is home to almost 40 per cent of the world's known uranium reserves and ships the nuclear fuel to China, Japan, Taiwan and the United States.

Indians hail Labour decision

Indian community in Australia on Sunday welcomed the ruling Labor party's decision of lifting the long standing ban on uranium sale to India, saying that the moment was historic for bilateral relations.

According to President of Australia India Business Council (Victoria), Ravi Bhatia, "The decision by the Australian Labor Party to remove ban of sale of Uranium to India is momentous and historic".

"The Labor Party deserves sincere thanks from the Indian-Australian community and indeed the entire Indian community here," Bhatia said.

On behalf of the Indian community, Bhatia thanked Prime Minister Julia Gillard, Resources and Energy Minister Martin Ferguson, Foreign Minister Kevin Rudd, Defence Minister Stephen Smith and other Labor Party leaders and other union leaders for their farsightedness in supporting India to reduce to its energy deficit.

"The resulting accelerated economic development, job creation, industrial development, more power for irrigation and increase in food production are indeed far reaching effects of the Australian decision as are the corresponding social justice implications," he said, adding the decision validates India's unblemished record as a responsible nuclear power that has followed the principles and the spirit of NPT in total.

Sydney-based Council of Indian Australians (CIA) President Yadu Singh also hailed the decision on the withdrawal of the baHe said CIA was pleased that ALP national conference has passed a resolution today to remove the ban on Uranium trade with India.

Singh said "Prime Minister, Julia Gillard, Minister Martin Ferguson [Minister for Resources, Energy and Tourism], and others have done the right thing. This decision was overdue".

Singh also said "Prime Minister Julia Gillard in particular deserves congratulations for showing leadership on this matter".   

He further said that the ban on Uranium sale to India was a major obstacle in the growth of Australia India relations.

They will now accelerate significantly with this decision. It will also serve Australia's national interests".

According to chairperson of the Sub Continent Friends of Labor, Harish Velji, "it would make a difference to the lives of 400million people in India."

"Australia can and will make this policy work for the betterment of our region and to generate wealth and jobs at home."

"Australia which is part of IAEA and Nuclear Suppliers Group approved in 2008 decided that India's safeguard were strong enough to export uranium.”

This was under Rudd government in 2008. "The decision taken by ALP National Conference should profoundly change the nature of the relationship between Australia and India. India is a great friend to Australia. Our relationship has been unnecessarily strained because of our respective positions on this issue," he said.

A senior Lowy Institute researcher Rory Medcalf, a longstanding advocate of improved Australia-India relations, had recently pin pointed in a paper published by Australia India Institute (AII), that a change of Labor policy would build a new foundation of non-discrimination, mutual respect, trust and partnership with a rising India.

"It would also help Australia catch up with a global non-proliferation order that is already adapting to India's importance in the Asian century," he wrote.

According to Australia's Opposition Leader tony Abbott said Labor's decision was merely a case of Gillard correcting her own mistake.