"India and France welcome the signature of a bilateral accord for civil nuclear cooperation which will form the basis of enlarged bilateral cooperation in the fields of energy and research," a French presidency statement said.

The accord was signed following talks between President Nicolas Sarkozy and Indian Prime Minister Manmohan Singh, who travelled to France after a US trip that also saw the House of Representatives back a US atomic pact with India.

The French-Indian pact marks a key step in India's bid to secure a new position as a nuclear power as the country faces a critical shortage of energy to fuel its booming economy.

It effectively ends a ban on civilian nuclear trade with New Delhi imposed in 1974 when India used its civilian nuclear programme to produce and successfully test an atomic bomb.

The Vienna-based Nuclear Suppliers Group lifted the ban in early September after hard lobbying by Washington.

India, which currently has 22 nuclear reactors, is seeking to expand its nuclear energy sector, opening up a market estimated at 100 billion euros (145 billion dollars) over 15 years.

French nuclear giant Areva said Monday it hoped to negotiate the delivery to India of two third-generation European Pressurized Reactors (EPRs), as well as nuclear fuel.

The world's second producer of nuclear energy after the United States, France is vying to lead a worldwide revival of the industry, fuelled by worries about global warming and rising energy prices.

Since Sarkozy's election last year, France has signed nuclear power deals with half a dozen developing nations in the Middle East and north Africa.

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