The Obama Administration said US and India have completed negotiations on "arrangements and procedures" for reprocessing US-origin spent fuel on Monday.
The state department said the arrangements would "enable Indian reprocessing of US-obligated nuclear material under the International Atomic Energy Agency safeguards."
"Completion of these arrangements will facilitate participation by US firms in India's rapidly expanding civil nuclear energy sector," it said.
The advanced consent granted India to reprocess spent fuel of US origin and fuel burned in American-supplied civilian reactors is just the third such agreement reached by the US with another country. The US previously granted similar rights only to the European consortium the European Atomic Energy Community and Japan.
Although the US has 123 Agreements with China, Brazil, Indonesia, South Korea and 16 other countries, these countries, even though being a party to the Nuclear Nonproliferation Treaty -- which India is not -- have not been accorded similar consent as to India.
The reprocessing agreement was one of the major residual provisions of the US-India 123 Agreement.
Under the arrangement reached, India will not be supplied with any American reprocessing technology to reprocess the spent fuel from US-origin and fuel burned by American nuclear reactors, but will have to construct new dedicated facilities for reprocessing of fuel under International Atomic Energy Agency safeguards.
Ron Somers, president of the US-India Business Council, said, "The Agreement to make India the third reprocessing partner of the US reflects the special trust and respect that exists between strategic partners."
"Today's announcement attests to continuity and bipartisanship in both countries, and encourages us that the US-India civil nuclear trade is near at hand."
Ted Jones, director for Policy Advocacy at the US India Business Council, who has led at least two delegations of representatives of American companies looking to provide civilian nuclear reactors and other related technology to India's energy sectors, said, "Resolution of two key issues will enable India to assume a key role in the global commercial nuclear supply chain.
"We hope these issues will get early attention, as US and Indian commercial nuclear firms are eager to partner not just in India, but in the renaissance of commercial nuclear power around the world," Jones added.
Jones was referring to an accord by Washington and New Delhi on nonproliferation assurances to permit US licensing for technical exchanges regarding nuclear power. Delays in these 'Part 810 assurances,' as they are known, Jones said, were currently preventing work by Indian suppliers in the US as well as collaboration in India.
The second issue he referred to is India's adoption of a regime to make nuclear liability predictable, consistent with the IAEA-sponsored Convention on Supplementary Compensation.
Jones said, "A nuclear liability law will not just establish an effective and assured means for adequate compensation in an extremely unlikely event of an accident, but also enable responsible and international suppliers to develop the safest nuclear power programme in India."
"Contrary to myth," he said, "suppliers from all countries will require a modern nuclear liability regime in order to participate in the Indian market."
The Indian government's efforts to introduce this civil nuclear bill in parliament more than a fortnight ago was thwarted when the opposition parties said they would oppose the bill in the present form because it does not have a high enough ceiling and only imposed a liability of $450 million in case of an accident, that too on the operator and not the supplier.
Foreign Secretary Nirupama Rao, who visited Washington, DC to chair the seventh US-India High Technology Cooperation Group on March 15, shrugged off the opposition's hue and cry and assured the US business lobby that the civil nuclear liability bill was "ready for introduction and in all likelihood, it would be introduced after the recess".
"Once the 123 Agreement is implemented, a structural bilateral interacton with the industry on both sides could take forward the process," she said.
Rao noted, "There is already a steady and direct interaction between the US nuclear industry and Nuclear Power Corporation of India Limited. Two MOUs have already been signed with GE Hitachi and Westinghouse."