The talks between officials of the nuclear establishments of the two countries are expected to take place within the next fortnight and will be observed very closely by US companies which are keen to set up nuclear power plants in India. The first round of talks in July in Vienna were "very surprising for both the sides", sources close to the negotiators said. Department of Atomic Energy officials also said the two sides had made "good progress" in the first round of discussions and were optimistic that agreement could be clinched "in a couple of months".

The talks are being considered as a significant step to take forward the operationalisation of the Indo-US nuclear deal. The consultations are being based strictly on Article 6 (III) of the 123 agreement between India and the US. According to the agreement, to bring reprocessing rights into effect, India has to establish a new national facility dedicated to reprocessing safeguarded nuclear material under the safeguards of International Atomic Energy Agency (IAEA). Also, India has to reach an agreement with the US on "arrangements and procedures" under which such reprocessing will take place in this new facility.

Conclusion of the talks is crucial for the US companies to start nuclear commerce with India. US energy majors -- Westinghouse-Toshiba and GE-Hitachi have inked pacts with state-run Nuclear Power Corporation for setting up nuclear parks in India. India has earmarked two sites -- Mithi Virdi in Gujarat and Kovada in Andhra Pradesh -- to host the US nuclear reactor parks. Designation of the sites was advocated by the US-India Business Council (USIBC), the Washington-based trade group that championed the successful US initiative to end the global ban against commercial nuclear trade with India.

In September last year, the 45-nation Nuclear Suppliers Group amended its rules to permit India to engage in international trade in commercial nuclear equipment, fuel and technology. In the year since, India has moved forward signing nuclear cooperation agreements with Russia, France, Namibia and Kazakhstan. Besides the US, France and Russia will also develop nuclear parks in the country with each park hosting between six and eight atomic reactors. Russia is already building two reactors at Kudankulam in Tamil Nadu, while France's Areva has been allocated Jaitapur site in Maharashtra to set up nuclear plants.