India and Australia have agreed to launch negotiations on a civilian nuclear cooperation agreement.

The decision was made Wednesday during talks between Australian Prime Minister Julia Gillard and her Indian counterpart Manmohan Singh Wednesday in New Delhi.

Such an agreement would allow Australia to sell uranium to India, which already has signed such deals with the United States and France.

The deal would help supply energy-starved India with the fuel needed to run civilian nuclear plants, while giving a new market to Australia, the world's third largest uranium supplier.

Australia had previously ruled out selling uranium to India because the South Asian nation has not signed the Nuclear Non-Proliferation Treaty. The issue had been a point of contention between the two countries.

Prime Minister Singh on Wednesday hailed the decision to begin talks on a nuclear deal, saying it is a “recognition of India's energy needs as well as our record and credentials.”

Negotiations on a nuclear deal are expected to take at least a year.

At a reception with Mr. Singh Wednesday, Prime Minister Gillard hailed growing ties between Australia and India. She said “our interests are converging and that means our nations can work together to strengthen our economic partnership, to strengthen our strategic partnership and resolve issues that I would be speaking to Prime Minister Singh about later today.”

The Australian leader's three-day visit, which began Monday, was also aimed at boosting economic ties. Bilateral is trade worth about $20 billion and growing at 20 percent a year.