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India's Prime Minister Manmohan Singh, left, and his Pakistani counterpart Yusuf Raza Gilani April of 2010.© Rupak De Chowdhuri / Reuters

An imminent deal that would open the door for Canadian exports of uranium to India, could add to nuclear tensions in South Asia, some experts say.

The impending agreement made front-page news this week in India, amid speculation Prime Minister Manmohan Singh's visit to Canada for the G20 summit will allow him to sign a long-awaited nuclear co-operation pact.

The deal could be worth billions for Canadian industry and would formally end the mistrust that followed India's nuclear test in 1974, when it became apparent that India had misused a Canadian research reactor to obtain weapons-grade plutonium.

Some experts on nuclear technology say the new deal could repeat history, however, with Canada unwittingly adding to the nuclear tensions in the region by easing India's shortage of uranium.

"They're not going to say this is for weapons, but they're unlikely to rule it out," said M.V. Ramana, a researcher at Princeton University.

Any such civil nuclear deal would include safeguards to prevent the exported uranium from being used for military purposes, Mr. Ramana said, but Canada's supply would leave India free to use more, or all, of its own domestic uranium for weapons. The country is believed to produce about 300 to 450 metric tonnes annually, which Mr. Ramana estimated would be enough to make at least 60 Hiroshima-sized bombs.

The supply of uranium isn't the only factor limiting the size of India's nuclear stockpiles, but observers say any shift in production capacity could affect the military balance. The Federation of American Scientists estimates India's arsenal at 60 to 80 warheads, and Pakistan's at 70 to 90; their bitter rivalry is widely regarded as the world's most dangerous nuclear standoff.

India has already shown a degree of restraint by making fewer weapons than it could, and there is no indication that New Delhi will actually use Canada's supply of uranium as an opportunity to expand its arms program. Still, the deal has already become a source of concern in Pakistan.

"This gives India the ability to build bigger stockpiles, which is a problem for Pakistan," said Achin Vanaik, a professor of international relations at Delhi University.

Others say India is more interested in building its economy than its arsenals. Hungry for electricity, the country plans to have 12 new reactors running by 2020, consuming an extra 1,500 tonnes of uranium per year. Other projects are expected, making India's civilian nuclear sector worth $25-billion to $50-billion over the next 20 years.

"This is a golden opportunity for Canada," said Chaitanyamoy Ganguly, president of Cameco India. A well-known former official from the International Atomic Energy Agency, Dr. Ganguly now serves as the only employee at the India branch office for Canada's uranium giant.

Cameco's operations in India won't stay small for very long, Dr. Ganguly said, as Canada could soon be exporting 2,000 tonnes of uranium to India annually. Canada has a natural advantage over its competitors in the Indian market, he said, because many of India's reactors are based on Canadian CANDU technology. Cameco will be further helped by the fact that Australia, a major supplier of uranium, has so far refused to sell to India until it signs the Nuclear Non-Proliferation Treaty.

Dr. Ganguly brushed off concerns that a greater supply of uranium might allow India to build its nuclear arsenal.

"Those days are gone," he said. "We're not so stupid."