The deal would be a milestone in India-US relations, not the best of friends during the Cold War.
It would allow India to import US nuclear fuel and reactors, despite having tested nuclear weapons and not signed the Non-Proliferation Treaty.
Critics, including many in the US Congress, say the deal unfairly rewards India and undercuts a US-led campaign to curtail nuclear ambitions of nations like Iran. Showdown
The crisis appears headed for a final showdown, with India facing an informal deadline by the end of November to begin securing clearances from the International Atomic Energy Agency (IAEA) and others to clinch the deal.
The communists, who prop up the ruling coalition, have warned the government against negotiating with the IAEA to place India's civilian nuclear reactors under UN safeguards, one of the first steps towards making the deal operational.
|"They [the government] have made up their minds they want elections" |
Abani Roy, Revolutionary Socialist Party member
Sonia Gandhi, ruling Congress party head and India's most powerful politician, talked with communist party leaders on Monday night in a surprise meeting and said the government wanted to start safeguard negotiations with the IAEA.
That was rejected by the communists, according to media reports, heightening speculation that Tuesday's panel meeting could see the government and the communists openly parting political ways, paving the way for early elections.
"They [the government] have made up their minds they want elections," Abani Roy, a senior member of the Revolutionary Socialist Party, part of the communist alliance in parliament, said before the panel met.
"They want to blame it on the left."
An early election could spark uncertainty in India's financial markets, worried what an election would mean for the fiscal deficit and the US nuclear deal.
The growing crisis came just as Mohamed ElBaradei, director general of the IAEA, arrived in India to speak at an energy conference, visit a nuclear research facility in Mumbai and meet with Indian nuclear officials.
While the IAEA says his visit is not political but routine, the timing added to tensions between the government and the deal's opponents. Flashpoint
Newspapers on Tuesday talked about early general elections, originally scheduled for 2009, being almost inevitable.
| Manmohan Singh's Congress party has already|
started preparing for early elections [AFP]
Morning television shows on Tuesday splashed headlines on their screens of "Nuclear Showdown" and "Will the Government Survive?"
"D-Day is now October 9," Prem Shankar Jha, a political analyst, wrote in the Hindustan Times
, referring to the potential showdown at the panel meeting. "The war of nerves drags on."
The political crisis reached a flashpoint after Gandhi on Sunday called opponents of the nuclear deal "enemies of development" in a statement widely seen as hinting she was ready for a snap vote.
That infuriated the communist parties, who issued a joint statement on Monday saying "We need not surrender our vital interests to America".
The Congress party has already started preparing for early elections, shuffling party leaders and announcing a slew of populist welfare measures to woo poor voters.
After negotiating with the IAEA, India must get clearance from the 45-nation Nuclear Suppliers Group (NSG) that controls global civilian nuclear commerce. Then the deal goes back to the US Congress for a final approval.