Half a mile down the narow country road from the Tarapur atomic power station, a seven-story-high building houses the developing world's only commercial plutonium reprocessing plant.

This facility, which became operational in April 1977, can take the spent fuel removed from the two neighboring atomic power reactors, and separate out plutonium that can then be used to refuel the power plant.

The separated plutonium can also be used to fabricate atomic weapons.

The Tarapur Fuel Reprocessing Plant, which seems likely to be only the forerunner of similar plants in other developing countries, thus symbolizes one of the greatest worries of the Carter administration.

"While reprocessing can serve legitimate needs," Under Secretary of State Joseph S. Nye declared, "it is also the step that changes spent reactor fuel into weapons-useable material."

Argentina, which built a laboratory-scale reprocessing facility in the 1960s that it was later persuaded to dismantle, is about to start construction of a larger experimental reprocessing plant.

U.S. and other Western arguments that reprocessing is only economical for countries that have a minimum of 10 or 15 large nuclear power plants are hotly disputed, moreover, by India.

The Tarapur plant, designed to reprocess the spent fuel from two Tarapur nuclear power reactors and the two at Rajasthan, was built for under $13 million, according to informed Indian officials.

"If you look at conditions abroad, they will tell you immediately that unless you reprocess 1,500 to 2,000 or 3,000 tons of fuel in a plant, it is totally uneconomonical," Dr. Homi Sethna, head of India's Department of Atomic Energy, said in an interview.

"For us, this is not true," he declared. "For us, 100 to 150 tons is fine."

India's first reprocessing plant, constructed on the grounds of the Bhabha Atomic Research Center outside Bombay, went into operation in 1964. This plant, which produced the plutonium used in the nuclear device which India exploded a decade later, had a reprocessing capacity of about 30 to 40 tons a year.

The Carter administration, in an effort to decrease the risks of proliferation, decided last year to defer commercial reprocessing in the United States, and has been trying to discourage construction of reprocessing plants elsewhere -- particularly in developing countries.

Many nations are finding it difficult, however, to accept this sudden shift in U.S. policy.

"Up until the Carter administration, it was always said that reprocessing would be the natural thing to do -- it would be economically advantageous and reduce the need for uranium," observed Sigvard Eklund, director general of the International Atomic Energy Agency.

"Now, the Carter administration has questioned this conclusion," Eklund said."Unfortunately, no evidence has come out how things really are. Japan and Germany, for example, think reprocessing is really advantageous."

It is clear that most developing nations -- even those like South Korea that have agreed to temporarily abandon plans to buy reprocessing plants -- continue to think reprocessing is necessary.

Brazil, which intends to build a small, laboratory-scale reprocessing facility in the mid-1980s with West German aid, is determined "to have all the technology for the fuel cycle from the concentration of uranium up to reprocessing," declared Minister of Mines and Energy Shigeaki Ueki.

"It was a pilot plant -- a very small one," Sethna said. "It wasn't meant to be a production facility. Just to see whether we could handle large amounts of radioactivity naked."

What naked means is that the highly radioactive fuel rods -- which are kept safely under water in a power plant -- must be worked with out of water in a reprocessing facility.

Since the working area of a reprocessing plant -- where the spent fuel rods are chopped up into two-inch pieces and dissolved into a solution -- becomes highly radioactive, the problem of performing any repairs to the remotely operated equipment inside becomes rather tricky.

"When the machine is chopping, suppose it goes bad," said M.K.T. Nair, operations manager of the Tarapur reprocessing plant. "What do you do then? How do you repair it? It's like opening a Pandora's box."

The possibility of accidents exposing technicians to radiation dosages in a reprocessing facility are thus considered greater than in an atomic power station.

Authoritive sources suggest that radiation problems have in fact been more than possibilities at India's reprocessing plants.

Sethna said the first reprocessing plant at the Bhabha center was being ripped apart at the moment as part of a plan to expand its capacity. But the Press Trust of India quoted scientists recently as saying the "entire place, including doorknobs, was contaminated with radioactivity." Other sources suggested the building would probably never be used again.

For the moment, the Carter administration has also succeeded in keeping the Tarapur reprocessing plant from moving into full operation.

Since the spent fuel for the two Tarapur atomic power reactors -- India's only nuclear plants that require enriched uranium -- originally comes from the United States, the Carter administration under a bilateral agreement with New Delhi has thus far vetoed any reprocessing.

"I don't know what will happen to that in the end," Sethna said.

But India needs plutonium to fuel its pilot fast-breeder reactor nearing completion at Kalpakkam. "The breeder can only start with this plutonium," Nair said.

With spent fuel available from India's unsafeguarded nuclear research reactors, the Tarapur reprocessing plant seems unlikely to stand idle for long.