PRIME Minister Julia Gillard has wrapped up her visit to India saying the two biggest obstacles in the relationship - a ban on uranium sales and problems for international students - have been resolved.

Ms Gillard held formal talks with her counterpart Prime Minister Manmohan Singh and attended a state dinner in her honour.

The two prime ministers formally agreed to start talks to put in place nuclear safeguards so Australian uranium could be sold to India.

They also decided to boost military ties, have greater intelligence sharing to combat terrorism and piracy and to begin talks on a prisoner transfer deal.

They also announced there would be a formal leaders meeting every year either in each other's country or on the sideline of international forums they attended.

"This is important because having an annual leaders meeting keeps momentum in a relationship, gives high level oversight about how a relationship is developing and what more needs to be done," Ms Gillard said.

An Indian PM has not visited Australia for 26 years. Indian media said Dr Singh pulled out of the Commonwealth Heads of Government Meeting in Perth 12 months ago because of the issues of uranium and students.

Ms Gillard said she invited Dr Singh to visit and he "would love to come" but it was a question of finding a time that will work.

Dr Singh thanked Ms Gillard for removing the uranium ban, saying it was recognition of India's energy needs but also a sign of confidence in India's "record and credentials".

"I have expressed to Prime Minister Gillard India's appreciation of this development," he said.

Ms Gillard said she believed Australia's image in India is "better than it was" when she last visited in 2009 as deputy PM at the height of claims of racism against Indian students in Australia "when the issue was hot and there was a media feeding frenzy".

India accounts for the second highest number of overseas students in Australia. Dr Singh raised the issue of student safety with Ms Gillard to thank her for protecting the welfare and security of Indian students in Australia.

Ms Gillard said she was pleased with her visit to India.

"I do believe in terms of the obstacles that were there in our relationship, that they have been dealt with, that we have reassured people about the circumstances for Indian students in Australia and we've changed our attitude on uranium and that has been appreciated here," she said before departing.

Dr Singh predicted a new phase of more intense and structured co-operation between the two countries.

"I am extremely satisfied with our discussions," he said.

Ms Gillard said Australia and India's defence ties would be improved.

Navy exercises based on a shared interest in the Indian Ocean will be boosted and Ms Gillard said Australia would be open to other military co-operation including exchanges and training "Currently our defence relationship is under-developed, indeed we have stronger defence ties with China than we do with India," she said.

The two nations also promised to make it easier for occupational qualifications to be recognised in both countries to make it easier to get work in either country.

And they signed a pact for peaceful space science research. Ms Gillard said "we're not going to be launching rockets" but it would involve work such as better using space technology and Indian satellites to track the progress of natural disasters.