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With this deal, the United States is formally embracing India as its nuclear partner, breaking Washington’s three-decade barricade against transferring nuclear technology to New Delhi, which conducted nuclear tests in 1974 and again in 1998.

Critics of the deal say that it undermines years of international efforts in banning weapons of mass destruction, and could weaken efforts to persuade countries like North Korea and Iran to give up their nuclear programs.

Before the Senate vote, Democratic Senator Tom Harkin voiced objections to the bill. "If we pass this legislation, we will reward India for flouting the most important arms control agreement in history, the Nuclear Nonproliferation Treaty, and we will gravely undermine our case against hostile nations that seek to do the same," Harkin said.

Daryl Kimball, head of the Washington-based Arms Control Association, called the agreement “a non-proliferation disaster."

Geopolitical analysts see this deal as a U.S. move to balance the rise of Chinese influence. In addition to its global economic clout, China’s successful hosting of the Beijing Olympics in August and completion of a spacewalk mission last month have raised its profile in the world.

In the eyes of some countries, including India, China looks set to resume its historical position as a dominant power in Asia, and is thereby seen as a threat or at least a challenge to the present international system. In reality China is still a developing country, lagging far behind developed countries in many fields, including governance and rule of law.

Another target of the U.S.-India deal is Russia. While India has been a nonaligned country, in fact it had a quasi-alliance with the former Soviet Union during the Cold War, giving it some leverage against its neighbors China and Pakistan. India fought a border war with China in 1962; in 1947 and 1965 it fought Pakistan over Kashmir, and in 1971 over what is now Bangladesh.

U.S. anxiety over India’s engagement with Russia is not unfounded. Under former President Vladimir Putin Russia has sought to exert greater influence militarily and economically on the global level. Russia is viewed historically as an ambitious, if not aggressive, country. Its recent clashes with Western countries over Georgia’s independence and military cooperation with Venezuela, as well as the two 1,000-megawatt reactors it is building in the southern Indian state of Tamil Nadu, have raised concerns in the United States.

Of course, the nuclear deal will also bring economic benefits, opening up a market worth billions of dollars to U.S. companies able to meet India’s huge energy needs. The deal will give U.S. companies an advantage in the Indian market, where other countries with nuclear technology, such as Russia, France, Japan and even China, are also aiming for a piece of the pie.

U.S. companies are expected to have even greater opportunities as India gradually opens its vast market, in areas ranging from investments in Indian real estate to selling soybean oil and fighter planes.

The deal may also have been conceived as a remedy for the current U.S. financial crisis, even though it was conceived three years ago. In 2006, financial writer Peter D. Shiff published a book, “Crash Proof: How to Profit from the Coming Economic Collapse,” in which he warned of a looming period of sizeable tax hikes, loss of retirement benefits and double-digit inflation. He compared the United States to a house of cards – impressive on the outside, but a disaster waiting to happen. He predicted that the country would go from the world's largest creditor to its greatest debtor; that the value of the dollar would decline; and that domestic manufacturing would give way to non-exportable services.

Perhaps U.S. President George W. Bush also saw this coming and viewed the India deal as a precautionary measure?

There is also the democracy factor. The United States regards India as a model of democracy in Asia, at least among the developing countries. Despite its numerous problems – including unemployment, starvation, ethnic conflicts and inefficient governance – the United States still sees India as a natural ally in Asia and a model for other countries to follow because of its democratic system.

Senator Joseph Biden, running mate to Barrack Obama in the U.S. presidential election next month, described the nuclear bill as implicit recognition of India's long-term value to the United States, "as a counterweight to China, as a rising military power, as an energy consumer, as an economic force, as a bulwark against terrorism and extremism, as a cultural beacon throughout Asia and the world."

Whether or not India meets U.S. expectations as a responsible citizen, partner or beacon of democracy, it is still a bold decision for Bush to decide to ignore international regimes and norms by allowing India to flout the NPT. It sets a precedent that other would-be nuclear states may be all too ready to follow.

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(Dr. Zhang Quanyi is associate professor at Zhejiang Wanli University in Ningbo, China, and a guest researcher at the Center for the Study of Non-traditional Security and Peaceful Development at Zhejiang University in Hangzhou. His research interest revolves around the creation of a world state. He can be contacted at qyzhangupi@gmail.com. ©Copyright Zhang Quanyi)