India and the International Atomic Energy Agency agreed on Wednesday to start negotiations on putting Indian reactors under IAEA safeguards, clearing a key hurdle to closing a U.S.-Indian nuclear supply pact.

New Delhi's atomic energy chief and the U.N. nuclear watchdog's director took the long-delayed step after domestic Indian political opposition eased following months of deadlock.

To launch the pact, New Delhi -- which does not belong to the nuclear Non-Proliferation Treaty -- must submit its declared civilian atomic reactors to IAEA monitoring and then win the approval of a global group controlling sensitive nuclear trade.

After prolonged resistance over fears the deal would weaken India's sovereignty, the communist allies of Prime Minister Manmohan Singh's government relented last week and said moves to seal the accord could be pursued on certain conditions.

An IAEA statement said agency Director Mohamed ElBaradei and Indian Atomic Energy Commission chairman Anil Kakodkar agreed at a half-hour meeting to initiate consultations on an India-specific safeguards agreement.

It said India and the IAEA Secretariat would start technical negotiations later this week in Vienna. The goal is ground rules for regular inspections at Indian reactors to ensure they are used to produce only peaceful energy.

U.N. officials told Reuters the talks could take some weeks.

Kakodkar made no comment to reporters after the meeting.

It was earlier thought the IAEA's 35-nation Board of Governors might approve an India safeguards accord at its regular year-end meeting on Thursday and Friday. But the extended political wrangling in India dashed that prospect.

RACE AGAINST TIME

U.S. and Indian officials are anxious to get the 2005 deal ratified before the United States plunges into its November 2008 election race, which could sideline it indefinitely.

The India-U.S. civilian nuclear cooperation agreement aims to reverse a three-decade ban on Indian access to U.S. atomic materials. Washington says it highlights a new strategic partnership that will promote international stability.

Disarmament advocates dislike the deal as New Delhi never signed the NPT -- one of only three nations not to do so, along with Pakistan and Israel -- and has tested atomic bombs.

They, like critics in the U.S. Congress, say the deal unfairly rewards India and undercuts a U.S.-led campaign to curtail the nuclear ambitions of nations like Iran, an NPT member that denies it is secretly pursuing nuclear weapons.

Communists who shore up Singh's coalition objected on the grounds that the pact would enable Washington to dominate India's non-aligned foreign policy, and threatened to withdraw support if the deal went ahead. They relented on Friday.

The pact will also require the consensus approval of the Nuclear Suppliers Group before ratification by the U.S. Congress. The 45-nation group discussed it last week but reached no conclusion since there was no India-IAEA deal yet.

(Editing by Michael Winfrey)

India Energy