"India, which has never signed the Nuclear Nonproliferation Treaty (NPT), has nuclear weapons and does not have International Atomic Energy Agency safeguards on all nuclear material in peaceful nuclear activities. Its explosion of a 'peaceful' nuclear device in 1974 convinced the world of the need for greater restrictions on nuclear trade. The United States created the Nuclear Suppliers Group as a direct response to India's test, halted nuclear exports to India a few years later, and worked to convince other states to do the same. India tested nuclear weapons again in 1998. Nonproliferation experts have suggested that potential costs to U.S. and global nonproliferation policy of nuclear cooperation with India may far exceed the benefits. At a time when the United States has called for all states to strengthen their domestic export control laws and for tighter multilateral controls, U.S. nuclear cooperation with India would require loosening its own nuclear export legislation, as well as creating a Nuclear Suppliers Group exception. It would reverse nearly three decades of U.S. nonproliferation policy and practice towards India. Some believe this agreement undercuts the basic bargain of the NPT, could undermine hard-won restrictions on nuclear supply, and could prompt some suppliers, like China, to justify supplying other states outside the NPT regime, like Pakistan. Others believe that allowing India access to the international uranium market will free up domestic uranium sources to make more nuclear weapons."
CRS Report for Congress, RL33016
U.S. Department of State: http://fpc.state.gov/