Prime Minister Julia Gillard moved Tuesday to lift Australia's controversial ban on uranium sales to nuclear power India in a bid to strengthen relations with the fast-growing economic powerhouse.

While Canberra exports uranium to China, Japan, Taiwan and the United States, India has been excluded because New Delhi has not signed the Nuclear Non-Proliferation Treaty, a prerequisite her Labor Party puts on sales.

But Gillard said it was time to change this, with the subject likely to dominate the annual Labor Party conference in Sydney next month where any policy switch must be ratified.

"I believe the time has come for Labor to change its position. Selling uranium to India will be good for the Australian economy and for Australian jobs," she told a press conference.

Although Australia uses no nuclear power, it is the world's third-ranking uranium producer behind Kazakhstan and Canada, exporting 9,600 tonnes of oxide concentrate each year worth over Aus$1.1 billion (US$1.1 billion).

It also has the world's largest reserves of uranium, holding 23 percent of the total, according to the World Nuclear Association.

Gillard said that Canberra had pursued international diplomatic efforts to persuade India to sign the nuclear treaty, but the US-India Civil Nuclear Agreement, penned in 2005, changed that strategy.

Under that declaration, India agreed to separate its civil and military nuclear facilities and abide by International Atomic Energy Agency (IAEA) safeguards.

In exchange, the United States agreed to work toward full civil nuclear cooperation with the South Asian giant.

"It effectively lifted the de facto international ban on co-operation with India in this area," said Gillard.

India is expected to increase its use of nuclear power from the current three percent of electricity generation to 40 percent by 2050, and Gillard said it made economic sense in "the Asian century" to boost ties.

"We are a very big supplier of uranium, so having access to this new and growing market is good for Australian jobs," she said.

But the prime minister stressed that any exports would have to be accompanied by guarantees that uranium would only be used for power facilities and not military purposes.

"We must, of course, expect of India the same standards we do of all countries for uranium export," she said.

This included strict adherence to IAEA arrangements and "strong bilateral undertakings and transparency measures that will provide assurances our uranium will be used only for peaceful purposes".

India welcomed the move, with External Affairs Minister S. M. Krishna saying it recognised "our growing energy needs, our impeccable non-proliferation record and the strategic partnership between our two countries".

The conservative opposition in Australia has for years been calling on Labor to change its policy so the country can tap into the lucrative and expanding Indian market. New Delhi has also been pressuring the government.

But not everyone wants a policy change, with Labor senator Doug Cameron among those opposed.

"We'll simply be exporting uranium to India and that will free up uranium within India for the military programme," he said.

Australian Greens leader Bob Brown also criticised the move, saying it was putting the commercial interests of multinational mining companies ahead of global safety.

"This is a country that has intermediate-range missiles," Brown told ABC radio. "It's developing a plethora of nuclear submarines with nuclear weapons."