Yes, a US-India nuclear deal undermines non-proliferation, because the deal gives India the technologies and capabilities to create their own nuclear weapons. The United States probably feels that they have to build India up as a strategic defense against Pakistan, Afghanistan, and the rest of the Middle East, but even so, the United States is spreading nuclear technologies to a country that did not have them.
The nuclear deal between the United States and India doesn't undermine non-proliferation on several fronts. First, international monitors are keeping an eye on civilian Indian sites. Second, India is a peaceful nation and the world's largest democracy. Third, nuclear weapons are kept safe by the Indian military. As such, India won't be declaring nuclear war on anyone anytime soon.