Condoleezza Rice arrives in Delhi today, basking in India’s delight at the Senate’s ratification of America’s nuclear trade deal with the country. The hard-fought treaty is hugely significant. Not only does it end a 30-year ban on the supply of US nuclear fuel to India, opening the way to massive foreign investment, bringing much needed new generating capacity to the booming economy while cutting India’s reliance on fossil fuels; it also draws the world’s biggest democracy significantly closer to the West, changing the balance in Asia, underpinning US-Indian relations and causing ripples of alarm in China and Pakistan.

To some critics, the Senate’s 86-13 endorsement of this controversial treaty undermines the West’s attempts to bolster the fragile NonProliferation Treaty. They see it as an unjustified reward for a country that has never signed the NPT, setting a precedent that will make it harder to persuade Iran and other countries striving for a nuclear potential to halt research into nuclear enrichment. India, however, has no such doubts and has called the Senate’s ratification a “monumental achievement”. It came, unexpectedly, as the Administration, which had urged approval, feared time was running out, especially after congressional attention was hijacked by the economic turmoil. It also came only just in time for Manmohan Singh, who risked the break-up of his coalition Government. He narrowly won a vote of confidence in July but was in danger of losing a deal on which he had staked his authority.

The economic effects are indeed monumental. India’s 22 nuclear plants are critically short of fuel, running at less than 50 per cent of capacity when energy shortages are hobbling growth. The deal could open up $27 billion in investment in 20 plants over the next 15 years. Although nuclear reactors will supply only about 7 per cent of India’s power needs in 20 years’ time, any reduction of coal and oil will reduce import bills and make it easier for India to slow its carbon emissions.

For Washington, the deal was always more about geopolitical strategy than business ties. Since the collapse of India’s treaty links with the Soviet Union, and especially since its move away from economic self-reliance to an embrace of the market, the US has looked to India as a democratic counterbalance to China. A closer partnership with the US is still anathema to Indians schooled in Nehru’s socialism and nonalignment. But to a younger, more pragmatic generation the agreement symbolises India’s tilt to US universities and lifestyle. And though India’s proposal for a “strategic partnership” differs in tone from America’s talk of a “potential ally”, it is important that this resilient democracy aligns itself more closely with the West and develops its nuclear potential in partnership with the West.

China and Pakistan affect indifference but are wary. Both will be anxious about Delhi’s potential to exploit new US ties at their expense. Fiercer criticism has come from within the US, with accusations that the Senate has dealt a deadly blow to the NPT. India is expected to move quickly to negotiate a new safeguards agreement with the International Atomic Energy Authority, though critics say UN inspections will not be enough. But rejecting the nuclear deal would not have bolstered the already shaky NPT. Forging a new partnership and alignment in Asia is by far the more valuable strategic prize.