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US says nuclear nations nearing deal on India trade

The United States said on Thursday 45 nations were making headway towards agreement on lifting a ban on nuclear trade with India after Washington reworked a draft for the move to ease proliferation fears.

But no breakthrough came after an all-day meeting of the Nuclear Suppliers Group and U.S. officials negotiated separately well into the night with NSG holdouts in search of consensus, with further revisions to the draft expected, diplomats said.

Washington, racing to finalise a U.S.-Indian atomic energy deal, was trying to clinch a one-time waiver of NSG rules against doing business with states outside the Non-Proliferation Treaty (NPT) before the two-day NSG plenary ends on Friday.

Barring NSG action in early September, the U.S. Congress may run out of time to ratify the deal before it adjourns at the end of the month for elections, leaving the matter to an uncertain fate under a new president.

Ahead of the Vienna meetings, some in the NSG said initial changes made to the draft were "cosmetic" and did not allay concerns the deal could subvert treaties meant to stop the production or testing of nuclear weapons.

In a sign of its desire to save a major Bush administration initiative, Washington sent its No. 3 diplomat, Undersecretary of State for Political Affairs William Burns, to Vienna to head the U.S. delegation at the nuclear cartel gathering.

"We are making steady progress in this process and will continue to make progress," he said outside the closed meeting.

"And while a number of representatives here have raised important questions that need to be addressed, our discussions have been constructive and clearly aimed at reaching an early consensus," Burns told reporters. He took no questions.

Diplomats had said before a flurry of extra consultations late on Thursday that the NSG might have to meet again later this month to make a decision, squeezing Congress's timetable.

Decisions by the nuclear export cartel must be unanimous.

Washington and some allies assert the U.S.-India deal will move the world's largest democracy towards the non-proliferation mainstream and fight global warming by furthering the use of low-polluting nuclear energy in large developing economies.

NON-PROLIFERATION STANDARDS AT STAKE

NSG critics fear India could use access to nuclear material markets to indirectly boost its bomb programme and drive nuclear rival and fellow NPT outsider Pakistan into another arms race.

To forestall this, they demanded clauses specifying no trade in the event of another nuclear test explosion, no transfers of fuel-enrichment technology that could be replicated for bomb-making, and periodic reviews of the waiver.

Some diplomats said reservations about a waiver had been reduced to a small minority in the NSG by U.S. tweaks to the text making clearer, though not saying outright, that trade with India would be cut off if it tested another nuclear weapon.

But they said a holdout group comprising Switzerland, New Zealand, Ireland, Austria, Norway and the Netherlands still felt the first revision was not good enough, and enjoyed quiet but significant backing from China.

"The key may lie in building a little more explicitness into the waiver to satisfy the sceptics while keeping in mind India's narrow political room for manoeuvre," said one senior diplomat.

India has ruled out conditions on an NSG exemption, such as a clear test ban, to protect its strategic nuclear sovereignty.

But its ruling coalition remains vulnerable to opposition complaints about a "sellout" of its strategic autonomy in the U.S. deal. It drew renewed fire on Thursday over a leak of secret Bush administration testimony assuring Congress that another Indian test would immediately terminate trade.

The government said India stood by a unilateral test moratorium but it would keep a right to test should it want to.

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