By Brajesh Upadhyay
BBC News, Washington
Mr Singh's government could collapse over the deal
The Bush administration has maintained rather a brave face on Indian Prime Minister Manmohan Singh's unexpected U-turn over the Indo-US nuclear deal, saying it's still "hopeful".
But Indo-US experts and those closely involved in galvanising support for the agreement here say it could mean a loss of credibility for a country that's positioning itself as an emerging global leader.
Doubts over whether Mr Singh's Congress party can sell the deal to its sceptical left-wing coalition allies have grown in recent weeks.
They are threatening to pull out of the government and force elections unless he ditches the deal.
There are increasing signs that Mr Singh is not prepared to risk that and an early election he might lose.
On Monday, Mr Singh called President Bush to tell him that "certain difficulties have arisen with respect to the operationalisation of the India-US civil nuclear co-operation agreement".
The White House has yet to respond, but state department spokesman Tom Casey said the US would like to see the deal done as soon as possible - "within the context of what each country has to do and has to accomplish".
But he stressed that he wouldn't be telling Indians how to manage their own internal affairs.
In pushing the deal with India, the Bush administration had defied strong resistance from non-proliferation hardliners and the agreement was touted as a symbol for Indo-US relations in the 21st century.
Under the deal, Indian nuclear plants will be open to inspection
India now needs to negotiate a safeguards agreement with the International Atomic Energy Agency (IAEA) and win the consensus of the Nuclear Suppliers' Group so that the Bush administration can present the deal to Congress for a final vote before the end of 2007.
But that deadline now seems beyond reach.
"For India to forego this opportunity to end its nuclear isolation would blunt the country's opportunity to build out its nuclear capability to maximum potential," says Ron Somers, president of the US-India Business Council.
He says this opportunity beckons a whole new wave of high technology advancements, which is certain to "accelerate India's growth far into the 21st century - India's century".
Lisa Curtis, a senior research fellow at the Heritage Foundation, was recently quoted by a news magazine saying if the deal fell through because of India's domestic politics, it would be a setback for India's goals of increasing its global stature and influence.
"Not only would New Delhi be perceived to have shot itself in the foot, it would be highly unlikely for any future US administration to contemplate major initiatives with India," she said.
That's one question on everyone's mind. Will a new administration be as supportive of the deal, particularly a Democrat administration?
Democrat Jim McDermott is the chairperson of the India caucus in the House of Representatives. He says the deal is a "work in progress".
"What we have seen is just a hesitation in the process... not a serious end," he says. So if Democrats come to power will it mean picking up from where it was left?
"Administrations are now no longer important because we both have reasons to want each other to succeed," says Congressman McDermott.
Professor Anupam Srivastava of Georgia University says it's now or never.
"If a Democrat regime comes into power, the non-proliferation lobby would successfully insert amendments and conditionalities that will be clearly unacceptable to Indian scientists," says Professor Srivastava, who has been closely associated with the agreement since its conception.
He laments that the deal is stuck after so much hard work.
"If you do a referendum in India on this deal it will win, if you do a vote in the parliament it will fall," he says.
These sentiments are echoed by Swadesh Chatterjee of the Indo-US Friendship Council, a group that lobbied hard for the deal. He says he feels "betrayed" by domestic politics in India.
"I personally made 66 trips from North Carolina to Washington for this deal. I feel now the Indian government's credibility is at stake," he says.