Future trade deals with India, one of the world's fastest growing economies, could suffer if the Government blocks the United States' decision to sell nuclear technology to India, it has emerged.
Under legislation passed in Washington, the US is now ready to share vital nuclear equipment with India, despite the latter's refusal to sign up to the 1968 United Nations' Nuclear Non-Proliferation Treaty, which was created partly as a result of Irish pressure from the 1950s.
Ireland is a member of the 45-strong Nuclear Suppliers' Group, which has the power to veto nuclear sales to countries that have remained outside of the non-proliferation treaty, which India has consistently refused to sign.
Last November, Shyman Saran, an envoy from Indian prime minister Manmohan Singh, travelled to Dublin for talks with Minister for Foreign Affairs Dermot Ahern, senior officials and the Oireachtas committee on foreign affairs.
"From a purely non-proliferation point of view, the case against the deal is obvious. Facilitating nuclear co-operation with a non-member of the NPT is in principle deeply disturbing," Mr Ahern has told the Oireachtas committee.
However, the Minister has acknowledged that India's rapidly-increasing economic importance is weighing heavily on members of the Nuclear Suppliers Group, and on those included in the New Agenda Coalition set up in 1998 to bring about a nuclear weapons-free world.
"And there is no doubt that India is increasingly taking attitudes to the agreement as a litmus test of countries' relations with it," Mr Ahern told the committee.
One member of the committee, Fianna Fáil TD Michael Mulcahy said the choice now facing the Government "is a very difficult one", as it tries to protect the non-proliferation treaty and, yet, not damage trade ties to India.
Last year, Taoiseach Bertie Ahern led a major trade mission to New Delhi, Mumbai and Bangalore in a bid to increase exports, which currently stand at a little over €100m a year, but which are expected to grow significantly in coming years.
On Friday, the Department of Foreign Affairs said it has been "closely following" the US/India deal, and has held talks with both US and Indian officials, though it pointed out that a number of steps must be completed before the matter will go before the Nuclear Suppliers Group.
"It is not yet clear when the matter will come to the NSG for decision, nor what the overall balance of opinion within the group will be.
"Ireland is continuing to analyse the situation and will continue in close contact with countries which, like us, place a particularly strong value on the NPT as the cornerstone of the global non-proliferation regime," the department said.
The United States is particularly keen to improve links with India to create a counter-balance to China, and also because rapidly-rising energy demand in India means that US nuclear power companies could secure up to $100 billion (€76 billion) worth of sales in coming years.
Opponents of the US/India deal argue that it would allow India to import uranium for civilian nuclear purposes and then divert its own supplies to making up to 50 nuclear weapons per year, thus raising tensions with neighbouring Pakistan.
The Indian government has agreed to allow the International Atomic Energy Agency to inspect 14 of its existing nuclear reactors, though it has designated eight more as military installations and, thus, closed to outsiders.
France, which has one of the world's largest civilian nuclear power operations, has already expressed support for the Indian deal, arguing that India has never sold nuclear secrets to "rogue" states and because it is a democracy.
Australia, on the other hand, has refused Indian approaches for uranium because it stands outside the non-proliferation treaty, although it reached a deal in 2005 with China for large-scale uranium sales to meet China's burgeoning energy needs.