A decision by the Bush administration to sanction two top Indian scientists for nuclear cooperation with Iran highlighted the risks of improving US relations with the South Asian power.
Scientists Y.S.R. Prasad and C. Surendar -- both former chiefs of the state-run Nuclear Power Corporation of India -- were cited last week with 12 other firms, including seven from China, for violating the Iran Non-proliferation Act of 2000.
India protested and asked Washington to withdraw the sanctions, which bar the men from doing business with the US government.
Washington is improving its ties with the world's largest democracy, attracted by its booming technology expertise and its commercial market but India's nuclear weapons capability and ties to Tehran are a serious concern.
The United States is monitoring New Delhi's technology exports "very aggressively (and) we have raised these concerns at very senior levels with the Indians every time we meet with them," a senior US official told Reuters.
The State Department did not detail the specific offenses by the two scientists but officials said it involved assistance to Iran's nuclear program during the first half of 2003.
Analyst Henry Sokolski, executive director of the Washington-based Nonproliferation Policy Education Center, said the sanctions may relate to India's breakthrough development of an economic way to produce tritium, a radioactive isotope used in nuclear bombs.
The United States and other countries accuse Iran of using a civilian nuclear energy program as a cover to develop atomic weapons, a charge Tehran denies.
Complicating the issue with India is the fact that the administration only last month lifted decades-old US export restrictions on equipment for New Delhi's commercial space program and nuclear power facilities.
"It's an odd time to be lifting those restrictions" when the administration is concerned enough about India's cooperation with Iran to impose new sanctions, said Sokolski of the Non-proliferation Policy Education Centre.
The new sanctions are consistent with Undersecretary of State John Bolton's determination to enforce non-proliferation laws, even if it upsets countries where the United States is pursuing better ties. Bolton oversees non-proliferation policy.
US officials said the Indian cases were discussed with the government in New Delhi in advance and sanctions imposed only after New Delhi failed to take action.
The administration waived sanctions on Indian companies "four or five times in the last couple of years" but if the government did not take concrete action to redress the situation sanctions could not be waived, one official said.
Another official stressed that the two scientists, not the Indian government, were sanctioned, and New Delhi "needs to do some punishing of people like this itself and prevent these things from happening."
Sokolski sees India competing for influence in Iran against nuclear rival Pakistan, whose top scientist Abdul Qadeer Khan ran a black market that sold atomic technology to Iran, Libya and North Korea before being stopped by Islamabad at US prodding.