India and French group Areva are close to agreement on a contract for Areva to build a nuclear power station on the west coast of India, Indian Foreign Minister Salman Khurshid said in a newspaper interview on Friday.

The project is for two European pressurised reactors (EPR) at Jaitapur 400 kilometres (250 miles) south of Mumbai.

The talks had reached a "very advanced stage", the minister told the Le Figaro newspaper.

"We have to settle the questions of safety raised by the tsunami in Japan and this has an effect on the unit price of energy produced," he said.

This was being studied by experts but "a final agreement is within reach," he said.

The reference to Japan concerned a disaster at Fukushima in Japan in March last year when a tsunami caused by an off-shore earthquake overwhelmed a nuclear power station built on the coastline.

The flooding causing a meltdown and widespread disaster which focused attention worldwide on the safety of nuclear power stations and particularly on where they are sited.

Areva said merely that it was in advanced talks without indicating when an agreement might be signed, after a two-year delay.

In December 2010, Areva an agreement with India to build the country's first two reactors of the new-generation EPR type at Jaitapur with an option for four more reactors.

But following the disaster in Japan, many projects around the world were frozen, delayed or abandoned. The negotiations with India slowed down.

The Indian authorities indicated that they were waiting for the results of various additional audits on safety issues in relation to the EPR reactors, in the light of the disaster at Fukushima.

There has been opposition to the project locally mainly over concerns about the risk of seismic activity in the area.

The minister also took a positive line earlier in the day regarding negotiations by French aircraft manufacturer Dassault to sell 126 Rafale fighter planes to India.

French President Francois Hollande is to visit India in the middle of February.

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AREVA