The memorandum of understanding also covers the potential supply by Areva of fuel during the life of the reactors, slated to be built in Jaitapur in the western state of Maharashtra, home to India's financial capital Mumbai.

"India is expecting a lot because of its huge needs in terms of energy," Areva chief executive Anne Lauvergeon told reporters in New Delhi.

"We have to deliver what we have agreed. We are deeply committed. India is a first-tier partner and customer."

The accord with the state-run Nuclear Power Corporation of India Limited covers two to six European Pressurised Reactors (EPR), which cost an estimated four to six billion euros (5.2-7.8 billion dollars) each.

"Of these six reactors, two should be ordered this year," Lauvergeon told AFP.

A 34-year-old embargo on civilian nuclear exchanges with India, imposed in 1974 following a series of Indian nuclear tests, was lifted last year after years of negotiations between India and the United States.

France in September signed an agreement with India covering nuclear energy cooperation, while Russia has signed a similar accord.

India currently has 17 nuclear reactors in operation that supply a mere 2.5 percent of the country's electricity. By 2020, that figure is expected to rise to four to five percent.

The gap between electricity supply and demand nationwide averages up to 16 percent at peak times, according to government figures, and 25 percent according to industry estimates.

And according to the Planning Commission of India, around 600 million people -- more than the entire population of the European Union and about half India's people -- are not even on the national grid.

India, the world's 10th leading economic power and dependent on oil imports for 70 percent of its energy needs, is seeking an additional 60,000 megawatts of nuclear energy, which would require investment of about 100 billion euros over the next 20 years.

"We have great expectations from the EPR reactor. Jaitapur is a first step. We are fully committed to have 20,000 megawatts of energy, as a minimum, by 2020. We could be closer to 30,000 megawatts," said Jairam Ramesh, India's minister of state for power.

The potential for French firms in such a scheme is put at around 20 billion euros.

With the new Indian accord, Areva has pipped its US, Russian and Japanese competitors -- although Indian officials have stressed there is plenty of business to go round.

And having been instrumental in the lifting of the 34-year-old embargo, the United States is expected to win a large slice of future nuclear business with India.

"We plan to build several reactors with friendly countries: the US, France and Russia," said Prithviraj Chavan, a minister of state in the office of Prime Minister Manmohan Singh.

"The MoU with Areva is to develop a contract but there are still a lot of technical and commercial details," he added.

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