Canada plans to liberalise foreign investment rules in its key uranium sector, in what

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could be seen as good news for India which recently inked a pact to reopen nuclear technology trade with Ottawa.

The government will "ensure that unnecessary regulation does not inhibit the growth of Canada's uranium mining industry by unduly restricting foreign investment," Governor General Michaelle Jean said in an address to Parliament.

Right now, foreign ownership of uranium mining projects in Canada is capped at 49 per cent unless a local partner cannot be found.

Other countries have similar or more restrictive rules, many of which date back to Cold War-era concerns about nuclear weapons proliferation.

Canada's move, outlined briefly in a government policy speech, comes as countries such as India and China embark on ambitious civil nuclear programmes that are predicted to stretch uranium demand beyond current supply capacity.

Both countries could seek access to Canadian uranium, particularly with India having recently signed an agreement to reopen nuclear technology trade with Canada.