India set to push nuclear deal, some hurdles remain

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Officials said New Delhi would move immediately on the next key steps needed to close the deal as time was running out and talks with a U.N. nuclear watchdog were expected to start as early as next week.

But analysts cautioned that New Delhi still faced an uphill task, both locally as well as internationally, in building support for a historic pact that seemed doomed until this week.

"This agreement will give us access to both fuel and new technology," Sonia Gandhi, head of the ruling Congress party, told a plenary meeting, the first in nearly two years.

"This will allow several friendly countries to help us boost our power production, which is the biggest need of our farming sector, industry, villages and cities," she said.

The India-U.S. civilian nuclear cooperation agreement aims to reverse a three-decade ban on New Delhi's access to American nuclear fuel and equipment, and has been hailed as the symbol of their new strategic friendship.

But communist allies of Prime Minister Manmohan Singh's government have rejected it, saying it compromises India's sovereignty and imposes Washington's influence, and threatened to withdraw support to the coalition they shore up.

However, on Friday, they softened their position after weeks of negotiations with government leaders and conditionally allowed the deal to be pursued, saying global clearances were needed for nuclear trade with nations other than the U.S. too.

Nevertheless, Singh, who officials said was "upbeat" after the communist decision, used the party plenary to hit out at critics of a deal he has sought to showcase as one of the biggest diplomatic triumphs of his government.

"This propaganda that is sometimes being made that this will affect our sense of judgement and the independence of our foreign policy is equally false," he said.

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