The agreement was signed at a ceremony attended by the two leaders.

Mr Sarkozy is on a four-day official visit, joined by his defence, foreign and finance ministers and about 60 business leaders.

Under the civil nuclear deal, French reactors are expected to be built at Jaitapur in the western Indian state of Maharashtra.

Monday's agreement was signed by the heads of French state-controlled nuclear group Areva and India's Nuclear Power Corporation.

India has 22 nuclear reactors and is seeking to expand its energy sector, opening up a market estimated at £90bn ($140bn) over 15 years.

France, the world's second largest producer of nuclear energy after the US, hopes to lead an international revival of the industry, which is expected to benefit from worries about global warming and soaring energy prices.

Hungry for energy to fuel its booming economy, India has a population of 1.2 billion, but gets only a tiny fraction of its electricity from nuclear power.