Aug 1 (Reuters) - Governors of the U.N. nuclear watchdog approved India's draft plan for inspections of its civilian atomic reactors on Friday, a precondition for launching a deal to obtain U.S. nuclear fuel and technology.

Following are main points of the 23-page "Agreement with the Government of India for the Application of Safeguards to Civilian Nuclear Facilities".

* WHY IT IS NECESSARY

Making India's declared civilian reactors -- 14 out of 22 -- subject to regular IAEA non-proliferation inspections is required for commerce with members of the Nuclear Suppliers Group (NSG), including Washington.

India has been embargoed by the NSG for having never joined the Non-Proliferation Treaty (NPT) and test-detonating nuclear devices in 1974 and 1998.

* KEY PASSAGES IN PREAMBLE OF AGREEMENT

"An essential basis of India's concurrence to accept Agency safeguards ... is the conclusion of international cooperation arrangements creating the necessary conditions for India to obtain ... reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply...

"India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies."

* MAIN OPERATIVE SECTION OF AGREEMENT

It resembles pacts the IAEA has with over 150 nations but more circumscribed to suit a non-NPT state. The other treaty outsiders, both with nuclear arsenals, are Pakistan and Israel.

* MISGIVINGS

Some Western nations fear the "corrective measures" clause could let India unilaterally cancel safeguards if foreign fuel supplies were cut off in response to another atomic bomb test.

Critics also say parts of the plan do not differentiate clearly between civilian and military nuclear applications. One operative paragraph says India may remove from IAEA purview "any special fissionable material" -- or bomb-grade material -- separated from material produced in a safeguarded fuel reactor.

Austria, Ireland and Switzerland raised concerns, quietly shared by some others, about possible diversions of nuclear material from civilian sites and, more broadly, the issue of "rewarding" a non-NPT country without placing restraints on its nuclear weaponry, diplomats in the meeting said.

* RESPONSE

IAEA Director Mohamed ElBaradei told concerned governors the safeguards plan "satisfies India's needs while maintaining all the agency's legal requirements". The deal was of "indefinite duration" like all other safeguards agreements, he said.

He and most of the 35 nations on the IAEA governing board endorsed the plan in speeches as a significant achievement in shifting India towards the non-proliferation mainstream.

* THE GOVERNORS' VERDICT

The plan was approved by consensus. Even Pakistan, India's arch regional rival, did not oppose it, apparently in the hope of winning a similar deal in future, some diplomats said.

-- For a related news story click on [nL1515679] (Writing by Mark Heinrich in Vienna; editing by Andrew Roche)

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