Prime Minister John Howard says Australia, one of the world's leading exporters of uranium, is maintaining its policy of only selling to nations that have signed the nuclear non-proliferation treaty - which India has not done.
Last week, President Bush and Indian Prime Minister Manmohan Singh agreed to a landmark deal on sharing civilian nuclear energy technology, in part to help India meet its skyrocketing energy needs.
If ratified by legislators in both nations, the deal would force India to separate its military and civilian nuclear sites, and open the civilian sites up for international inspections.
Mr. Howard, on a visit to New Delhi, says Australia and India will stay in touch about how those details are hammered out.
"It is a very significant agreement and we look at it positively," he said. "In particular, it brings within the reach of international inspections the civilian nuclear capacity of India, and that's a very important development. And it would be very foolish to ignore it."
India and the U.S. reached the deal during a three-day visit last week by President Bush. The president said even though India had not signed the non-proliferation treaty, or NPT, bringing India into the international nuclear fold is in U.S. interests.
The deal would give India access to nuclear fuel for use in generating energy that had been blocked to it in the past, because it had not signed the NPT.
Analysts say both Mr. Bush and Mr. Singh face tough fights in selling the nuclear deal to their respective legislatures.
Speaking before parliament Tuesday, Mr. Singh assured lawmakers that the deal would not affect India's military nuclear program, and there would be no limit placed on its ability to develop weapons.
India first tested a nuclear device in 1974 and again in 1998, sparking a nuclear arms race between it and long-time rival Pakistan.