Nov. 16 (Bloomberg) -- India's government will start safeguard negotiations with the global atomic energy regulator as part of steps to implement a civilian nuclear accord with the U.S., after communist allies lifted their objection to the move.

The communist parties, key allies of the federal ruling coalition, allowed the government to hold initial talks with International Atomic Energy Agency on condition the government won't enter into an agreement without their prior approval.

``The government will proceed with the talks and the outcome will be presented to the committee for consideration before it finalizes its findings,'' Foreign Minister Pranab Mukherjee said in New Delhi today, following a meeting of a panel consisting of members of the coalition and communists. ``The findings of the committee will be taken into account before operationalization of the India-U.S. nuclear cooperation agreement.''

The 2005 nuclear energy accord, which seeks to end three decades of India's nuclear isolation and give access to U.S. technology and equipment, has been delayed because of resistance from the communist parties.

The left parties last week softened their stand after having earlier turned down the government's plea to allow the start of negotiations with the IAEA.

The change in the communists's stand has come because they are under pressure in the state of West Bengal, governed by the left parties, said P. R. Chari, a strategic analyst at the Institute of Peace and Conflict Studies, a New Delhi-based group. Violence in the Nandigram area of West Bengal has led to accusations of human rights violations by civil liberties groups against the communist government and party members.

`Uncertain Future'

``It's not clear what kind of language in the safeguard agreement with the IAEA will satisfy the left parties,'' Chari said. ``The future of the deal is still uncertain as communists have essentially given away nothing.''

The Nandigram violence arose after protests against the state government's plans to turn it into an economic zone.

The panel decided that discussions with the global regulator were required to understand the implications of the United States-India Peaceful Atomic Energy Cooperation Act and the requirement for Congressional approval.

``After further discussions, it was decided that impact of the provisions of the Hyde Act and the 123 agreement on the IAEA safeguards agreement should also be examined,'' Mukherjee said. ``This will require talks with the IAEA secretariat for working out the text of the India-specific safeguards agreement.''

Hyde Act

The panel was formed to address concerns of the communist parties over how the Hyde Act would govern the so-called 123 agreement, which gives effect to nuclear energy cooperation between India and the U.S. The act exempts the agreement from certain requirements of the U.S. Atomic Energy Act of 1954.

Indian Prime Minister Manmohan Singh's government had faced the risk of collapsing after the communist parties opposed the nuclear accord, saying it would weaken the nation's ability to follow an independent foreign policy and compromise the country's own scientific capability.

Singh told U.S. President George W. Bush on Oct. 15 the agreement may founder because of ``difficulties'' due to resistance from the communists. Singh indicated on Oct. 12 he may be prepared to sacrifice the nuclear accord to ensure the survival of his government.

Delays in implementing the accord will stall plans to buy reactors from General Electric Co. and Westinghouse Electric Co. that the country needs to help build 40,000 megawatts of nuclear capacity by 2020, equivalent to one-third of current generation.

Parliament Debate

Today's move precedes a debate on the issue in parliament, which will take place in the last week of November. Parliament didn't take up a planned debate on the accord in the last session, which ended early because of a row between the government and the opposition. The communists have said they want the agreement to be delayed until it is debated in parliament.

Prime Minister Singh and Indian National Congress party president Sonia Gandhi last weekend held talks with communist leaders Prakash Karat and A.B. Bardhan to sort out differences on the agreement. The Indian National Congress party heads the federal ruling coalition.

Karat, general secretary of the Communist Party of India (Marxist), said on Nov. 12 that ``something will come out'' of the talks with the ruling coalition on the nuclear deal as neither side was ``adamant.''

The accord, if completed, would end a 33-year period in which India was unable to get fuel and technology from overseas. Nuclear sanctions were imposed against India after it first tested atomic bombs in 1974.

Non-Proliferation Treaty

Under the proposed agreement, the U.S. would accept that India, which exploded nuclear devices again in 1998, operates its civilian and military programs outside the Nuclear Non- Proliferation Treaty.

Bush and Singh reached preliminary agreement in July 2005 that would eventually enable U.S. companies to sell India nuclear technology, opening a market for equipment, fuel and reactors.

The U.S. Congress in December passed legislation allowing the accord to go forward, reversing a policy that barred nuclear exports to India.

Apart from the safeguards agreement with the IAEA for international inspections, the Nuclear Suppliers Group, a 45- nation forum dedicated to limiting the spread of atomic weapons, has to approve the accord. The agreement would then be subject to ratification by the U.S. Congress.

The ruling coalition, which has 225 seats in the 545-seat lower house of parliament, depends on the 59 seats of the four communist parties for a majority. The five-year term of Singh's government is scheduled to end in May 2009.

To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net.

Last Updated: November 16, 2007 09:38 EST