Sensitive drawings depicting the inner workings of a centrifuge, used to enrich uranium for nuclear bombs, were being sold by an Indian government agency for as little as $10 (about Rs 450) in 2006, the Washington Post reported on Monday.
The paper quoted David Albright, a former UN weapons inspector, who said he acquired the drawings to prove a point.
"We got them for about $10," Albright told the Post and called the incident a "serious leak of sensitive nuclear information."
The paper stated that India has since tightened its bidding procedures, but the incident has fueled concerns among opponents of a US-Indian civilian nuclear deal that Congress is expected to consider in the coming weeks.
Albright and his Institute for Science and International Security, a Washington-based nonprofit that monitors the spread of weapons technology, in a draft report cites recent incidents in which it says India engaged in "illicit nuclear trade", The Post reported.
The ISIS report is due for release on Tuesday. Albright told The Post that he shared his findings with US State Department officials but was turned away.
"It didn't fit with their talking points," Albright told the paper. "At the highest level, they were dismissive of our concerns."
