India and Australia plan to begin civil nuclear cooperation talks in March after Canberra agreed last year to open negotiations to export uranium fuel to the energy-hungry South Asian nation.

The two countries will hold the first round of talks in the Indian capital, Indian foreign minister Salman Khurshid said in a statement.

"We shall be commencing negotiations on a Civil Nuclear Energy Cooperation Agreement in March," Khurshid said after discussions with his Australian counterpart, Bob Carr, in the Indian capital.

Australia had earlier refused to sell uranium to India as it has not signed the Nuclear Non-Proliferation Treaty but reversed its stand last October as it sought to improve ties with one of Asia's third biggest economy.

"India is a key part of Australia's future," Carr said.

The two countries have said the formal negotiations could last up to two years.

New Delhi -- backed by the United States -- 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 tense relations with its nuclear-armed neighbour Pakistan, had been subject to a global embargo since the 1970s when it first conducted a nuclear weapons test.

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