Australia, which holds an estimated 40 percent of the world's uranium, already exports it to China, Japan, Taiwan and the US.

The country has excluded sales to India because it is not a signatory to the Nuclear Non-Proliferation Treaty.

During a passionate debate on the issue at Labor's annual conference, Prime Minister Julia Gillard said the change would be in the country's interests.

Labor delegates to the conference voted 206-185 in favour of the motion to change the party's policy.

She said any agreement to sell uranium to India would include strict safeguards to ensure it would only be used for civilian purposes, and not end up in nuclear weapons.

Australia's uranium industry has welcomed the policy shift.