The third round of talks will be held in Tokyo after Nov 20, a senior official who did not wish to be named, told IANS.
The Indian delegation will be led by Gautam Bambawale, joint secretary (East Asia) in the external affairs ministry, and will include senior officials of the department of atomic energy. They will hold talks with the Japanese team led by Mitsuru Kitano, Deputy Director General, Southeast and Southwest Asian Affairs Department, in the foreign office.
The two sides have exchanged draft texts and are making progress on bridging differences, said the sources.
Japan has urged India to ratify the Comprehensive Test Ban Treaty (CTBT) and has made it clear that in case of a pact, a nuclear test by India would lead to the termination of civil nuclear cooperation.
Given its history as a nuclear-averse pacifist nation and strong anti-nuclear domestic constituency, Japan is insisting on additional non-proliferation commitments, which are understood to go much beyond what India has agreed to in its 123 agreement with the US, said the sources.
Japan has decided to speed up nuclear negotiations with India as it does not want to be upstaged by Seoul, a regional rival, which has not only concluded a bilateral civil nuclear pact with India but also signed a Comprehensive Economic Cooperation Agreement with the country. New Delhi and Tokyo are expected to ink a similar pact in January 2011.
Last month, after talks with his Indian counterpart Manmohan Singh, Japanese Prime Minister Naoto Kan said that the two countries had "agreed to speed up negotiations for civil nuclear energy cooperation, while seeking India's understanding of our country's sentiment" as a nation which faced nuclear bomb attack.
Manmohan Singh, on his part, said that although he will not "force" Japan into a nuclear agreement because of its sensitivity as the only nation to have borne the brunt of atomic weapons, he stressed that civil nuclear cooperation can be mutually beneficial.
Japan, a non-proliferation hawk which reluctantly backed the waiver for India in the Nuclear Suppliers Group in September 2008, launched the first round of nuclear negotiations with India in June this year, marking a major policy shift on the part of Tokyo towards engaging New Delhi.
This was followed by the second round in New Delhi last month ahead of Manmohan Singh's visit to Tokyo.
A complex web of factors is driving Tokyo, which never missed a chance to criticise India's 1998 nuclear tests, to seek nuclear rapprochement with New Delhi.
Japan has closely followed US President Barack Obama's visit to India and noted his announcement that the US would ease high-tech exports to India and push for India's full membership of elite non-proliferation clubs like the NSG, MTCR, the Australian Group and the Wassenaar arrangement.
Tokyo, an ally of Washington, also took note of Obama's declaration of support for New Delhi's candidature for an expanded UN Security Council.
Above all, Japan finds itself on the same page with the US in sharing its concerns about
Chinese assertiveness in the South China Sea. In this context, Obama's support for a bigger role for India in crafting the East Asian architecture was not missed on regional players, including Japan.
Besides strategic reasons, Japan, a leader in civil nuclear technology that depends on nuclear electricity for over 40 percent of its energy needs, does not want to sacrifice business opportunities in the growing nuclear pie in India, a potential $150 billion market.