A landmark US-India nuclear deal endorsed by the US Congress is a rare foreign policy success for US President George W. Bush and sets the stage for improved ties between the world's two largest democracies, experts say.

It will help India provide power to its rapidly growing but energy starved economy in return for commitments on global nuclear non-proliferation norms.

The deal also creates opportunities for American businesses, but worries arms control groups who are concerned about nuclear proliferation.

"This is a historic step forward for the India-US relationship," Nicholas Burns, a former top US State Department official who negotiated most parts of the three-year-old deal, told AFP as the US Senate overwhelmingly passed the nuclear agreement on Wednesday.

It cleared the final legislative hurdle, allowing the United States to sell former Soviet ally India nuclear technology and fuel even though the Asian nation has refused to sign the Nuclear Non-Proliferation Treaty (NPT).

Such trade was banned following New Delhi's illegal nuclear tests in 1974.

"This was a very tough three-year negotiation on the most complex set of issues imaginable but it is resulting in a success because it was in the best interest for both countries," said Burns, now a professor at Harvard University.

"The advantage of India building more nuclear power plants will benefit not just the Indian people but all those who want to see a reduction in carbon emissions as well," he said.

Burns rejected a contention among some pundits that the nuclear deal was devised as part of a US move to use India as a counterweight to a rising China.

The congressional nod to the deal was a refreshing success for Bush at a time when he is grappling with a massive financial crisis and few foreign policy breakthroughs since the Iraq War debacle as he prepares to leave office in January.

"Americans have a rare foreign policy success within reach," said the American Foreign Policy Council, a think tank, just before the vote Wednesday.

Senior Republican Senator Richard Lugar, who led an extensive legislative review of the agreement, said the deal was "one of the most important strategic diplomatic initiatives undertaken in the last decade."

But arms control experts criticized the deal, saying that a plan under which India was to separate its military and civilian nuclear reactors was not credible and could allow it to increase its bomb production.

Under an agreement drawn up by the International Atomic Energy Agency (IAEA), the UN nuclear watchdog, 14 of India's 22 civilian nuclear reactors, six of which are already subject to other safeguard agreements, are expected to come under agency supervision by 2014 -- the first ones as early as 2009.

"The US-Indian Agreement for Nuclear Cooperation is a nonproliferation disaster," said Daryl Kimball, executive director of the US Arms Control Association.

"It does not bring India into the 'nonproliferation mainstream' and India's so-called separation plan is not credible from a nonproliferation perspective," he said.

The business dimension to the nuclear deal cannot be underestimated.

The US Chamber of Commerce said with India's 34-year nuclear isolation now history, a potential 150 billion dollars (107 billion euros) of new investments are expected in terms of new nuclear generating capacity by 2030.

"If US companies are allowed to compete, a modest share of that business could support 250,000 high-tech American jobs," said Bruce Josten, the chamber's executive vice-president.

The State Department estimates that India plans to import eight 1,000-megawatt nuclear reactors by 2012.

"If the United States wins bids for just two of these reactors, it would result in 3,000 to 5,000 direct jobs and 10,000 to 15,000 indirect jobs in the US," said former defense secretary William Cohen, now a top business consultant.