The 86-13 vote now paves the way for President George W Bush to sign the deal into law.
His administration has pushed for the agreement aggressively over the past three years.
The deal enables American companies to sell nuclear reactors, fuel and technology to India after a ban of more than three decades on such trade. Major shift
It also marks a major shift in US foreign policy towards a country where relations in the past have been marked by mutual distrust.
Secretary of State Condoleezza Rice is due to visit India on Saturday where she will ink the pact with her Indian counterpart, Foreign Minister Pranab Mukherjee.
The Indian ambassador to the US, Ronen Sen, who has been working on the deal since it was conceptualised in the summer of 2005, says it marks the “the highest point” in his career.
Mr Sen was the secretary of the Indian Atomic Energy Commission when the US decided to cut off the fuel supply for a nuclear reactor in the country.
“Finally, things have come full circle,” he said, arguing that the deal was not just good for India and the US but also for the wider world.
Indian firms eye nuclear business
Several prominent Indian Americans, who had lobbied aggressively for the deal, were jubilant.
“It’s the greatest alliance of the 21st century,” said Swadesh Chatterjee of the Indo-US Friendship Council. A North Carolina resident, Mr Chatterjee says he made 69 trips to Washington DC in the past three years.
“The Indian community is usually very divided but we have shown that when we put our heads together, we can do miracles,” said Mr Chatterjee.
Sanjay Puri of the US India Political Action Committee is equally ecstatic. “This accord will bring a major shift in world’s direction,” he said.
Mr Puri and his group were instrumental in mobilising support for the deal and organised a gathering of Congress members to press for it once it was cleared by the 45-member Nuclear Suppliers Group last month.
While the deal can boast of bipartisan support in both the House and the Senate, there were dissenting voices.
Critics say the deal allows India to expand its nuclear power industry without requiring it to sign the Non-Proliferation Treaty (NPT) as other nations must.
They also fear it could boost India’s nuclear bomb stockpile by freeing its domestic fuel for weapons.
Democrat senator Byron Dorgan says the US is telling the world that, like India “you can misuse American nuclear technology and secretly develop nuclear weapons, you can build a nuclear arsenal in defiance of the United Nation resolution and you will be welcomed as someone exhibiting good behaviour with an agreement with the US”.
Mr Dorgan tried to introduce an amendment calling for the end of US nuclear trade if India detonates a nuclear device in future but the Senate rejected it.
Supporters of the deal say it will boost nuclear trade between two countries.
“It also means that up to a quarter of a million jobs could be generated in US once the trade gets going,” says Swadesh Chatterjee.
In the past three years the deal has gone through major ups and downs and overcame major political opposition in India. But things looked much brighter for the supporters of the deal when it got approval from the Nuclear Suppliers Group on 6 September.
The NSG green signal opened the door for other bilateral pacts and earlier this week India signed a nuclear deal with France. Russia has also been lobbying hard on behalf of its firms.
However, it’s believed the top firms to benefit from the over a billion dollars’ worth of expected trade would be US companies as it’s the US that has pulled India out of its nuclear isolation.