Part of a bilateral civil nuclear cooperation agreement signed between Australia and India will formally allow Australian uranium to be sold to India.

The deal was signed during a state visit by prime minister Tony Abbot, who was received by prime minister Narendra Modi.

"The signing of the civil nuclear cooperation agreement is a historic milestone in our relationship. It is a reflection of a new level of mutual trust and confidence in our relationship and will open a new chapter in our bilateral cooperation. It will support India’s efforts to fuel its growth with clean energy and minimize the carbon footprint of its growth," Modi said in prepared remarks.

A bilateral memorandum of understanding on cooperation in the peaceful uses of nuclear energy was also signed.

As a non-signee to the Nuclear Proliferation Treaty, India has previously been barred from external sales of uranium. The country’s nuclear reactors have suffered from lack of uranium fuel.

But that hard line has weakened after the US signed a 1-2-3 agreement for export of nuclear materials to India in 2005.

Australia’s position dates back to 2012 when the government lifted its ban on uranium exports to India.

Administrative arrangements for the civil nuclear cooperation agreement remain to be completed.

Picture: Australian Prime Minister Tony Abbott and Indian prime minister Narendra Modi