Indian Foreign Minister Pranab Mukherjee says India may face global isolation if it does not go ahead with a nuclear deal with the US.
Mr Mukherjee said talks with IAEA are still on
The landmark deal has been stalled because of stiff opposition from the ruling government's communist allies.
The communists say the deal would give the US too much influence over India's foreign policy.
They have threatened to end support for PM Manmohan Singh over the issue, which could trigger an early election.
The deal would give India access to civilian nuclear technology and fuel even though it has not signed the nuclear Non-Proliferation Treaty.
Mr Mukherjee has said India faced isolation if it backed out of the deal at this stage.
"We do not live in isolation. If we do not fall in line [and sign the nuclear accord], there may be sanctions. We will face problems," Mr Mukherjee was quoted by The Telegraph newspaper as telling a meeting of businessmen.
India has held talks with the UN nuclear watchdog, the IAEA, in Vienna on the controversial deal -one of the stages in the approval of the agreement.
India's communist parties have said they retain the right to reject the deal even after the IAEA has sifted through it.
Mr Mukherjee was quoted by the Press Trust of India as saying that India and IAEA were yet to find a common ground on the issue and that talks were still on.
He said India could not "depend on coal reserves alone" for its energy needs.
The landmark deal has also been criticised by many outside India.
Under the agreement, India is allowed to reprocess spent nuclear fuel - something that is opposed by some members of the US Congress.