Established in 1975 in response to India's Peaceful Nuclear Explosion (PNE), the Nuclear Suppliers Group (NSG) controls the export and re-transfer of nuclear weapons materials to stop nuclear proliferation. On 6 September 2008, the NSG adopted a resolution by consensus to lift its embargo on nuclear commerce with India thus allowing India 'full civil nuclear cooperation' with NSG members. The decision also waives the requirement of 'full-scope safeguards' as a pre-condition for the NSG members to export nuclear material and fuel for use in safeguarded Indian civilian nuclear facilities. This decision raises a basic question: Does the India-specific NSG waiver dilute global non-proliferation norms? There, however, is no consensus on this issue.

On the one hand, non-proliferation proponents like Michael Krepon and Daryl Kimball maintain that this decision has damaged global nuclear non-proliferation efforts. William Potter, on the other hand, maintains that the most disheartening feature is how economic considerations and power politics overrode nuclear arms control. He questions whether rewarding India, a nuclear weapons state, with nuclear trade benefits reserved for states in compliance with the Nuclear Non-Proliferation Treaty (NPT), will not erode incentives for other states to join the NPT? How can one tighten control on sensitive nuclear exports, uranium enrichment and plutonium reprocessing technology to NPT members while creating a giant loophole for such exports to a non-NPT state? Arguments of the non-proliferation lobby can be broadly summarized as follows: first, India, which is not a party to either the NPT or the CTBT, is now recognized as a de-facto nuclear weapons state by this waiver. This decision enables India to obtain civil nuclear cooperation despite possessing nuclear weapons. Earlier, this was not allowed under the NSG guidelines.

Second, this waiver weakens the international safeguards system. The separation plan has no meaning without India becoming a party to the NPT. This decision may lead to diversion of India's indigenously-produced fissile materials to military programmes, as fuel for its civilian reactors would be imported. Third, there is no provision for an automatic termination of nuclear imports should India violate its commitments. Terminating nuclear supplies would require the consent of all the NSG members, which would be difficult. Fourth, there is no consensus on penalties to be imposed on India if it tests, or mechanism to prevent transfer of ENR technology and there is no system for review of the India-specific waiver. Fifth, the NSG waiver sets a bad precedent for states like Pakistan, Iran and North Korea who have not respected non-proliferation norms. Finally, this decision may lead to arms race in the triangular equation between India, China and Pakistan, which could result in vertical proliferation of nuclear weapons.

The liberal view counters these arguments and sees the NSG waiver as a positive step for arms control. They maintain that the NPT was not complete without India. By this waiver, India has become a de-facto party to the NPT. It is a forward looking approach that ends India's decades-long isolation from the nuclear main-stream and ensures its integration into the global non-proliferation regime. IAEA Director General El Baradei comments, "I believe the agreement is good for India, is good for the world, and is good for our collective effort to move towards a world free from nuclear weapons. What the agreement does is to bring India closer to the debate on our ultimate goal, which is the goal of the NPT -to establish a world free from nuclear weapons." (Frontline, August 2008). The liberal line of argument can be broadly grouped as follows: to begin with, the nuclear deal was premised on Indian nuclear weapons not being viewed by Washington as a threat. India's No First Use (NFU) policy, unilateral moratorium on nuclear testing, clear command and control structure including safety systems, point out India as a responsible nuclear power. It recognizes India's impeccable non-proliferation credentials and its status as a state with advanced nuclear technology.

Second, the waiver does not provide a wrong signal to states like Pakistan, Iran and North Korea. Their nuclear assets are not indigenous, unlike India's. It is a known fact that China transferred nuclear t to North Korea and Pakistan. Further, it is unwise to compare India with these countries whose non-proliferation records are poor. Third, the NSG waiver has created a space for nuclear commerce. The nature and scope of bilateral agreements and their execution between India and individual NSG members would be relevant. Fourth, a vertical arms race between India, China and Pakistan is highly unlikely due to this waiver, which is intended for India's environmentally sustainable energy security.

Karl Inderfurth argues that the post NSG-waiver developments may open doors for a broader nuclear dialogue which the US and India could pursue to counter the dangers posed by nuclear proliferation and terrorist groups seeking to obtain and use weapons of mass destruction.