IAEA clears India inspection plan, boosts U.S.-India deal

VIENNA (Reuters) - Governors of the United Nations' nuclear watchdog approved an inspections plan for India on Friday, an important step towards completing a nuclear trade accord between New Delhi and the United States.

The plan will permit regular International Atomic Energy Agency (IAEA) surveillance of India's declared civilian nuclear energy plants -- 14 of 22 existing or planned reactors.

The IAEA's 35-nation board of governors passed the plan by consensus despite qualms about ambiguous language some feel could allow India to cancel inspections unilaterally, or which fails to ensure civilian nuclear materials cannot be diverted into the country's off-limits bomb program.

The decision clears a hurdle to an accord that would allow exports of nuclear fuel and technology for civilian use to India after a 34-year ban imposed because India tested atomic bombs and has not signed the Non-Proliferation Treaty (NPT).

Washington and New Delhi must now persuade the 45-nation Nuclear Suppliers Group (NSG) to grant India an unprecedented waiver allowing trade with a non-NPT state and win ratification by the U.S. Congress before the deal can go into force.

India's foreign secretary said the NSG would discuss the issue on August 21-22, and that India expected an "unconditional exemption", a demand some NSG members may resist for fear of undoing respect for the NPT.

The IAEA's director said the inspections scheme met non-proliferation safeguards standards, and that talks had begun on a system of more intrusive, short-notice checks, known as the Additional Protocol, to raise confidence in India's intentions.

IAEA inspections will be phased in from 2009.

"These are not comprehensive or full-scope safeguards (unlike with NPT member states)," Mohamed ElBaradei said. "(But the plan) satisfies India's needs while maintaining all the agency's legal requirements.

"I believe the agreement is good for India, good for the world, good for nonproliferation ... I believe we answered every question satisfactorily," he told reporters.

The United States welcomed the IAEA's approval of the inspection plan and said it hoped to move quickly on revising the NSG guidelines before submitting the accord to Congress.

Industrialized powers say the deal ushers India towards the non-proliferation mainstream and will fight global warming by fostering use of low-polluting nuclear energy in developing economies, also cutting high oil and gas costs.

Simon Smith, Britain's IAEA envoy, said the deal would "make a significant contribution to energy and climate security".

"This is an important day for India and for our civil nuclear initiative, for the resumption of India's cooperation with our friends abroad," Indian Prime Minister Manmohan Singh said during a visit to Sri Lanka.

MISGIVINGS

But some smaller Western and developing nations and disarmament groups fear the accord could weaken allegiance to the NPT, already challenged by a drive for nuclear power in the Middle East led by Iran's disputed uranium enrichment project.

"An arrow was launched through the heart of the NPT today, with the approval of the India safeguards agreement," said one dismayed diplomat. "As a result of heavy-handed diplomacy, India can benefit from nuclear help from abroad while keeping its weapons program unchecked. Hypocrisy wins."

With time fast running out before the U.S. presidential election in November, Washington and New Delhi have lobbied other countries hard to speed the deal over remaining hurdles.

India faces a tough sell at the NSG, formed in response to its 1974 nuclear test to limit trade in "trigger list" nuclear items -- those with civilian or military uses -- to NPT member states with good non-proliferation records.

Nuclear analysts say some hardline NSG members may propose conditions on India's waiver including a more binding commitment against nuclear testing, on which India is observing a voluntary moratorium, and significant progress towards implementing an Additional Protocol.

Twenty-six IAEA board members are also in the NSG.

(Additional reporting by Karin Strohecker in Vienna and Krittivas Mukherjee in Colombo; Editing by Catherine Evans)