Her comments came after members of congress cast doubt on the deal because New Delhi has refused to sign the nuclear Non-Proliferation Treaty (NPT) and has developed nuclear weapons.
Condoleezza Rice, speaking before the Senate and House of Representatives on Wednesday, pushed congressmen to endorse the deal for India to gain access to long-denied civilian nuclear technology in return for placing a majority of its nuclear reactors under international inspection.
"What would happen if this initiative were defeated or changed in a way that fundamentally alters its substance?" she asked.
"All the hostility and suspicion of the past would be redoubled," she said, recalling Cold War tensions, when relations were "bedeviled" and there was "structural ambivalence" between the two nations.
The nuclear deal was signed by George Bush, the US president, during a visit to India in early March.
In her comments, Rice warned congressional leaders that moves to block the would play into the hands of those opposed to improved ties between India and the US.
"We would slide backward, when we should be striding forward", she said.
Rice said Russia, Britain, France and Australia had all backed the deal, which could only be effective if Congress amended the US Atomic Energy Act prohibiting nuclear sales to non-NPT signatories.
Senator Biden: Details of IAEA
safeguards should be disclosed
But critics said the agreement smacks of double standards and could embolden states such as Iran and North Korea, even though officials say India's nuclear non-proliferation record was exemplary.
Dick Lugar, a Republican senator and chairman of the Senate Foreign Relations Committee, called for "a thorough, bipartisan review" of the deal in the context of non-proliferation goals, global energy requirements, environmental concerns, and the US geo-strategic relationship with India.
Henry Hyde, Republican senator and head of the House International Relations Committee, said "the principal area of contention by far" concerns the deal's possible detrimental impact on global non-proliferation policy.
Democratic senators Joseph Biden and John Kerry said Congress was being asked to approve the deal without having details of safeguards to be imposed on India by the International Atomic Energy Agency (IAEA).
"I am uncomfortable voting to change the overall structure without seeing those safeguards, knowing what they're going to be," Kerry said.
Rice said the head of India's atomic energy commission was travelling to Vienna this week to begin negotiations with the IAEA on the safeguards agreement.