Indian PM Manmohan Singh has pressed Australia to lift its ban on selling uranium to India.
The two leaders will discuss the prospects of uranium trade
Mr Singh sought the lifting of the ban in the presence in Delhi of his Australian counterpart, John Howard.
Ahead of Mr Howard's visit, Australia said India needed to sign the Nuclear Non-Proliferation Treaty if it wanted Australian uranium.
Mr Howard's visit comes days after US President George W Bush signed a key nuclear deal in Delhi.
"We would like to trade with Australia in all areas .. we are short of uranium. We would very much like Australia to sell uranium to India," Mr Singh told reporters after welcoming Mr Howard for a four-day visit in the Indian capital.
Mr Howard, who had ruled out such a sale on Sunday, said the two leaders "will talk about this against the background of the policies and needs of the two countries."
Ahead of his visit to India, Mr Howard had indicated that Australia had no plans to change its present policy on selling uranium to India.
"We're certainly not going to suddenly change our policy just because the Indians and Americans have reached an agreement," he added.
Australia has about 40% of the world's known uranium deposits, but only sells it to countries which have signed the treaty.
Mr Howard's four-day visit to India is aimed mainly at boosting bilateral trade.
The two countries' trade is currently valued at more than $5bn and Mr Howard heads a large delegation including bankers and bosses of energy companies.
Three in a row
India is one of the world's fastest growing economies and Mr Howard is the third world leader to visit the country in as many weeks, following President Bush and French President Jacques Chirac.
The Indian economy is expanding at around 8% a year, and this steady economic growth has made India an attractive trade partner, writes the BBC's Jyotsna Singh.
A statement issued by India's External Affairs Ministry says a number of agreements are due to be signed in the presence of the two prime ministers on Monday, including those on Customs Co-operation, Trade and Economic Framework and Defence Co-operation.
Mr Howard will also visit India's financial capital Mumbai (Bombay), as well as Madras.
"India is an increasingly influential global and regional player whose interests converge with Australia's," said Mr Howard.
"The discussions I will have while in India will add impetus to our growing strategic relationship."