Howard said he had struck an agreement to sell uranium to New Delhi in a telephone conversation with his Indian counterpart Manmohan Singh.

"Australia has decided in principle to export uranium to India, subject to India agreeing to very stringent safeguards and conditions," Howard told reporters.

"Our officials will now enter into negotiations regarding the conditions. We want to be satisfied that the uranium will only be used for peaceful purposes."

Howard, a strong supporter of US President George W. Bush, noted earlier that sales to India would depend on the implementation of a landmark civilian nuclear deal between New Delhi and Washington.

That deal would allow India to buy civilian nuclear technology while possessing nuclear weapons, making it an exception under the nuclear Non-Proliferation Treaty (NPT).

Australia has the world's largest known reserves of uranium and has been under pressure from its ally to match a deal to sell yellowcake to China with an agreement to do the same for India.

Critics have pointed out that selling the nuclear fuel to India would mean scrapping Australia's policy of refusing exports to countries which have not signed the NPT.

China and India are both nuclear weapons powers, but Beijing has signed the treaty and New Delhi has not.

"I think it will strike many Australians as very strange that it's acceptable to sell uranium to China but it's not -- no matter what arrangements you have -- acceptable to sell uranium to India," Howard said.

"There'll also need to be a satisfactory finalisation of the negotiations between India and the United States," before any sale is made, he said.

Those negotiations appeared to have run into difficulties this week, with the United States and India differing on whether the deal would preclude New Delhi from conducting atomic weapons tests.

Howard told parliament earlier that India had a "very good" record on non-proliferation.

"It has indicated that it does not intend to join the nuclear Non-Proliferation Treaty, so we think it worthwhile finding practical ways to bring it into the non-proliferation mainstream."

Australia's growing trade and security relationship with India was another factor to be taken into account.

"It's an influential regional power and a potential strategic partner for Australia," he said.

Howard said the exports would be subject to strict conditions, including guarantees that the uranium would only be used for power generation.

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