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(Adds U.S. comment, background; paragraphs 5-9)
By Douglas Busvine
NEW DELHI, June 23 (Reuters) - India said on Monday it was ratifying an agreement with the International Atomic Energy Agency (IAEA) to expand oversight of its civilian nuclear programme, in a move aimed at unblocking a major nuclear partnership with the United States.
The ratification sends a strong signal that Prime Minister Narendra Modi, elected last month by a landslide, wants to bolster strategic and trade ties with the United States ahead of a meeting with President Barack Obama in Washington in September.
"I can confirm that we are ratifying the Additional Protocol to the IAEA Safeguards Agreement," said Syed Akbaruddin, spokesman for the Ministry of External Affairs.
The move signals India's commitment "to the responsible use of nuclear power," Akbaruddin added, confirming earlier domestic reports. No comment was available from the IAEA.
The United States welcomed the move.
"This action marks another important step in bringing India into the international nonproliferation mainstream," a spokeswoman for the U.S. State Department said, adding that it fulfilled a commitment made by former Prime Minister Manmohan Singh in a 2005 joint statement on nuclear cooperation with former U.S. President George W. Bush.
"The United States remains fully committed to expanding our civil nuclear cooperation with India," the spokeswoman said.
She also said the United States had made clear "its strong support for India's full membership in the four multilateral arms export control regimes, in a phased manner, as India takes the steps necessary to join each regime."
The four control regimes are: the Nuclear Suppliers Group; the Missile Technology Control Regime; the Australia Group, which covers chemical and biological materials; and the Wassenaar Arrangement covering dual-use items and conventional weapons.
Critics of the IAEA pact say it fails to allay concerns that India could get its foot in the door of a club of countries that trade in nuclear materials, without first signing the Non-Proliferation Treaty, which seeks to curb the spread of nuclear weapons.
There would be "no gain for non-proliferation," said Tariq Rauf, a former senior IAEA official now at the Stockholm International Peace Research Institute.
India, which first tested a nuclear weapon in 1974, is not a party to the Non-Proliferation Treaty. That means its military nuclear programme is not subject to inspections by the IAEA, the United Nations' nuclear watchdog.
Both India and Pakistan tested nuclear weapons in 1998, setting off an arms race between the neighbouring countries which have fought three wars since independence. That, in turn, has raised tensions with China, an Asian superpower and Pakistan's patron.
In a report last week, a defence research group said one Indian enrichment facility was undergoing an expansion and could be capable of producing a large surplus of weapons-grade uranium from mid-2015.
The plant would be able to produce an estimated 160 kg of weapons grade uranium a year - or enough for five atom bombs - in excess of the needs of India's planned fleet of nuclear-powered submarines, IHS Jane's said.
Indian officials have shown displeasure over the report, with a newspaper quoting one saying it was "mischievously" timed to influence a meeting this week of the 48-member Nuclear Suppliers Group (NSG) in Buenos Aires.
Following the U.S.-India nuclear deal, the IAEA in 2009 approved the Additional Protocol, intended to clear the way for the NSG to grant India a waiver to trade with other countries in the civilian nuclear field.
Ratification is a key step toward separating India's civilian and military nuclear operations, and could help unlock tens of billions of dollars in U.S.-led investment in new nuclear generation capacity.
Yet as recently as a year ago, talks on India joining the group were being slowed by the prospect that its accession might trigger similar demands to join by other countries which have not signed the NPT, such as Pakistan.
"India sees its ratification of its Additional Protocol as an arrow in its quiver supporting its quest for NSG membership," said Mark Hibbs, a nuclear expert at the Carnegie Endowment for International Peace, a U.S. think tank.
But the lack of verification of India's weapons programme, which contrasts with tighter controls on NPT signatories, would continue to be a concern.
"India's entire nuclear weapons programme is totally outside the scope of its Additional Protocol," Hibbs added. "It isn't clear to most people what the utility of the Additional Protocol in India is as a verification instrument." (Additional reporting by Fredrik Dahl in VIENNA and David Brunnstrom on Washington; Editing by Clarence Fernandez and G Crosse)