Australian Prime Minister Julia Gillard on Wednesday agreed to open negotiations to export uranium nuclear fuel to energy-hungry India after meeting her counterpart Manmohan Singh in New Delhi.

The deal, which will provide a boost for India's civilian nuclear ambitions, comes after Australia reversed its policy of refusing to sell uranium to India as it has not signed the Nuclear Non-Proliferation Treaty.

"Prime Minister Manmohan Singh welcomed the decision of the Australian government on uranium sales to India, noting that nuclear energy will play an important role in India's future energy needs," a joint statement said.

"India and Australia (will) commence negotiations on a bilateral civil nuclear cooperation agreement which, for Australia, is a prerequisite for uranium sales to other countries," it added.

Gillard overcame opposition within her own Labor party to reverse the ban last year, arguing that the deal was necessary to improve ties with one of Asia's biggest economies.

The two countries will now kick off formal discussions, but have warned that negotiations are likely to last up to two years.

New Delhi -- backed by the US -- won a special exemption in 2008 from the Nuclear Suppliers Group (NSG), which governs global nuclear trade, to allow it to buy reactors and fuel from overseas.

India, which has fractious relations with its nuclear-armed neighbour Pakistan, had been subject to a global embargo since 1974 when it first conducted a nuclear weapons test.

Singh hailed Wednesday's announcement as recognition of India's "record and credentials" on civil nuclear power and expressed his appreciation to Australia.

Gillard said the proposed sale of uranium was "personally important" to her as she had led the campaign for a change in Australian policy -- attracting fierce criticism from some environmentalists and anti-nuclear groups.

Gillard earlier said that negotiations would guarantee that the uranium would be used only for peaceful purposes and in safe conditions, and that the deal would be overseen by the International Atomic Energy Agency (IAEA).

New Delhi has sought to forge close ties with a host of countries with deposits of uranium, including Mongolia, Namibia and Tajikistan alongside Kazakhstan and Canada.

India is heavily dependent on coal and produces less than three percent of its energy from its existing atomic plants. The government hopes to raise the figure to 25 percent by 2050.

Although Australia does not use nuclear power itself, it is the world's third-ranking uranium producer and holds an estimated 23 percent of the world's reserves.

It already ships the nuclear fuel to China, Japan, Taiwan and the United States.

Countries are normally required to have signed the Nuclear Non-Proliferation Treaty and open their reactors to international scrutiny before they can buy atomic technology and uranium.

On Wednesday morning, Gillard attracted widespread press attention when she fell to the ground in front of TV cameras after the heel of her shoe became stuck in grass at a memorial park to Mahatma Gandhi.

She was unhurt and laughed off the incident.