UPDATE 3-Congress OKs Indian nuclear deal, sends to Bush

(Adds Bush comments, reaction paragraphs 3-4, 7)

By Susan Cornwell

WASHINGTON, Oct 1 (Reuters) - The U.S. Congress on Wednesday approved a landmark deal ending a three-decade ban on U.S. nuclear trade with India, handing a victory to President George W. Bush on one of his top foreign policy priorities.

Final approval came as the Senate voted to ratify the deal, 86-13, sending the legislation to Bush to sign into law. The Senate's move came just ahead of an expected trip to India this weekend by U.S. Secretary of State Condoleezza Rice.

Bush said he looks forward to signing the bill into law.

"This legislation will strengthen our global nuclear nonproliferation efforts, protect the environment, create jobs, and assist India in meeting its growing energy needs in a responsible manner," Bush said in a statement.

The Bush administration says the pact will secure a strategic partnership with the world's largest democracy, help India meet its rising energy demand and open up a market worth billions.

But critics say the deal does grave damage to global efforts to contain the spread of nuclear weapons, by letting India import nuclear fuel and technology even though it has tested nuclear weapons and never signed the Non-Proliferation Treaty (NPT).

"The U.S.-Indian Agreement for Nuclear Cooperation is, nonetheless, a nonproliferation disaster," said Daryl Kimball, head of the Arms Control Association.

"Contrary to the counterfactual claims of proponents and apologists, it does not bring India into the "nonproliferation mainstream."

The ACA is a non-partisan Washington-based arms control policy organization.

India has a yawning energy deficit, and the accord opens up this market worth billions to American companies such as General Electric (GE.N) and Westinghouse Electric, a unit of Japan's Toshiba Corp (6502.T).

Rice spent much of the past month in an all-out effort to persuade Congress to approve the pact, which the Bush administration says will transform the U.S.-India relationship. Bush wanted the deal approved before leaving office in January; Congress is expected to adjourn soon for elections.

The accord enjoys bipartisan support in Congress, where many lawmakers favored it as a way to create jobs in the U.S. civil nuclear industry while cultivating the small but affluent Indian-American community.

Critics said the deal was deeply unwise, overturning decades of U.S. policy of refusing to sell nuclear technology to nations lacking full safeguards against that technology's diversion into nuclear weapons programs.

IRAN CONCERNS