Critics in India argue the constraints compromise their country's right to conduct nuclear tests. Some private U.S. arms control experts say the deal is likely to speed up nuclear arms competition in Asia.
The Bush administration, however, considers the deal a key achievement of the president's second term.
"By undertaking new cooperation on civil nuclear energy, India will be able to count on a reliable fuel supply for its civilian reactors, meet the energy demands of its people, and reduce its independence on fossil fuels," Bush said at a ceremony in the East Room. "For our part, the United States will gain access to a growing market for civilian nuclear technologies and materials that will help American businesses create more jobs for our people here at home."
The signing of legislation, which approvesU.S.-Indian civilian nuclear cooperation, is the result of three years of work by Indian officials and the Bush administration. The president said the measure would build on the growing ties between the world's two largest democracies, the United States and India.
Throughout the Cold War, relations between India and the United States were chilly. In the past decade, however, ties have grown closer in a range of areas, including trade, energy and security. The United States is now India's largest trading partner.
"This agreement sends a signal to the world: Nations that follow the path to democracy and responsible behavior will find a friend in the United States of America," Bush said.
Secretary of State Condoleezza Rice and Indian External Affairs Minister Pranab Mukherjee are expected to sign the overall bilateral nuclear cooperation accord on Friday.
Congress last week gave final congressional approval to legislation authorizing civilian nuclear trade with India, which built its atomic bombs outside the Nuclear Non-Proliferation Treaty.
By signing the authorizing legislation, Bush is required to certify that the agreement with India is consistent with U.S. obligations under the treaty, an accord designed to limit the spread of nuclear weapons. He must also certify that it is U.S. policy to cooperate with international efforts to further restrict transfers of technology related to uranium enrichment and the reprocessing of spent nuclear fuel.
U.S. opponents of the nuclear agreement say lawmakers rushed consideration of a complicated deal that could spark a nuclear arms race in Asia. The extra fuel the measure allows India to purchase, those critics say, could boost India's nuclear bomb stockpile by freeing up its domestic fuel for weapons.