First, the Bush administration sent a pretty clear signal, with the Iraq invasion, that if you're a rogue nation and you don't have a nuclear deterrent, you're screwed. As a result, Iran and North Korea are pursuing nuclear programs at full speed because they know that that's their only ace in the hole if the U.S. wants to force regime change on them.
Now, there's this. How can giving nuclear tech to a nation that hasn't signed the NPT not damage the credibility of that treaty? I realize that the IAEA will probably do a sufficient job of securing nuclear power in India. The problem is that the signal that it sends.