In 2007, that deal was crystallized, and its text was released to the public. Then at the end of 2008, President Bush and Prime Minister Singh signed the agreement, which then entered into force.
Now, in the way of implementing that deal, New Delhi and Washington announced yesterday that they have reached an agreement that would allow India to reprocess used nuclear material.
Here's the problem with the above statement: these reprocessing activities would yield plutonium, which can then be used to build nuclear weapons. One of the main points of the bilateral Indo-US deal was to curb proliferation on the South Asian subcontinent, so this most recent development seems counter-intuitive and regressive. And using civilian nuclear capabilities for military purposes wouldn't be a first-time venture for New Delhi. After all, India did the exact same thing over 30 years ago when it used civilian nuclear material to build its first bombs.
Remember that, in order for the 2005 deal to be pushed through with a country that is not a signatory to the NPT, significant exceptions had to be made. The Nuclear Suppliers Group (NSG), a nuclear export-control organization formed in the 1970s partially in response to India's testing of a nuclear weapon, granted key exemptions to India to allow it to conduct bilateral nuclear trade with the US. Read the press statement from the US-India Business Council on the NSG decision here.
As India has signed bilateral deals now with the US, with France and with Russia, it is absolutely critical that such activities as reprocessing should be checked, not encouraged. Here's a good quote from Edwin Lyman of the Union of Concerned Scientists:
"At a time when nuclear terrorism and proliferation concerns are only increasing, the United States should be doing everything it can to stop existing reprocessing, not facilitate more."India has, by its own account, joined "the club." It is virtually "in" with the recognized nuclear powers. The Bush-Singh deal in 2005 was, in this writer's opinion, a flawed, myopic and disastrous agreement. But now that it has been put in place, further agreements like this reprocessing deal will only serve to highlight the inefficacy of the current non-proliferation regime. At a time when India and Pakistan (both nuclear-armed) are still deadlocked over peace talks and continue to operate outside the 1968 NPT, it is crucial that positive and encouraging steps be taken to curb proliferation in measurable and verifiable ways.
A reprocessing deal is not a step forward -- it's two steps backward.