Obama in India: PM Narendra Modi, Barack Obama agree on civil nuclear deal, end logjam of six years

NEW DELHI: President Barack Obama and PM Narendra Modi agreed on all the big stuff on Sunday — putting the civil nuclear deal to work, taking defence cooperation up another notch, besides endorsing India for a permanent seat on the UN Security Council.

On a day that began with that warm hug which went right around the world, the leaders of the two countries put the seal on a relationship that has become closer ever since Modi met Obama in the US last year.

A day before he becomes the first US president to be chief guest at India’s Republic Day parade, Obama turned on the charm — speaking in Hindi and cracking wise. With time, suggested the president, Modi would figure out how to steal an extra hour of sleep. But all that bonhomie didn’t conceal the fact that India and the US got a great deal of work done after Modi broke with protocol to greet Obama and wife Michelle soon after Air Force One touched down, underlining their personal chemistry.

By Sunday evening, both leaders announced a breakthrough in the nuclear deal after breaking off on their own — even having a cup of tea on their stroll on the lawns — during talks at Hyderabad House. The inability to move ahead on this had been the major irritant in the ties.

Delhi and Washington also decided to establish hotlines between the PM and president and also between their national security advisors, Modi said during the joint press conference with Obama after their summit meeting.

That Obama is the first US president to visit India twice during his tenure underscores how far ties have recovered from the low marked by the diplomatic row that was sparked when an Indian diplomat was arrested in New York over visa issues.

The four key deliverables from the summit meeting were in the areas of nuclear energy, defence, climate change and the economy.

The stage had been set for the nuclear deal in three rounds of dialogue by the bilateral contact group, particularly the last one in London last week, officials said.

“I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our laws (and) international legal obligations,” Modi said at the press conference.

The US president also hailed the development, saying, “Today we achieved a breakthrough understanding on two issues that were holding up our ability to advance our civil nuclear cooperation and we are committed to moving towards full implementation.”

The two countries had in 2008 signed a landmark deal giving India access to civilian nuclear technology, but it has been held up by US concerns over India’s strict laws on liability in the event of a nuclear accident.

While there were no immediate details on how the impasse had been broken, India will set up an insurance pool led by General Insurance Co and four other insurance companies of a total amount ofRs 750 crore to indemnify companies that build reactors in the country against liabilities in case of a nuclear accident.

The remaining Rs 750 crore of the total Rs 1,500 crore to offset liabilities will be provided by the government of India. This will address US concerns over clause 17 of the Indian liability Act.

Besides this, Attorney-General Mukul Rohatgi will address US concerns over clause 46 of the Act that allows for unlimited liabilities in case of a nuclear accident, officials said.

“We have broken the logjam of the past few years. We have reached an agreement. The deal is done,” Foreign Secretary Sujatha Singh announced after extended discussions between Obama and Modi lasting more than three hours.

Earlier there was “cautious optimism” on the Indian side that Obama was going to use his executive powers to temper the US insistence on acquiring tracking rights perpetually over nuclear material, even that sourced from third countries for use in US reactors, over and above inspections by the International Atomic Energy Agency (IAEA).

Officials said America was no longer insisting on “flagging” or tracking the nuclear material supplies to India as required under its rules to ensure this is not being used for military purposes. India said the demand was intrusive, especially because IAEA safeguards are in place.

The two sides also strengthened their growing defence partnership by renewing a 10-year-old pact that would not only bolster joint exercises and counter-terrorism cooperation but also encourage the much-anticipated joint production and co-development of weapon systems.

The two sides also decided to resume their dialogue on the Bilateral Investment Treaty to boost economic ties as Modi is seeking US investments for his Make in India programme. Modi announced that the countries will also restart discussions on a social security agreement that’s important for the hundreds of thousands of Indian professionals working in the US.

Atotalisation agreement to sort out the matter of social security payments is a long-pending US demand. The two sides also signed agreements for smart cities in Ajmer, Allahabad and Visakhapatnam.

The issue of terrorism too was high on the agenda, according to the foreign secretary when asked if such acts that originate from Pakistan came up during talks. “We agreed that we need a comprehensive global strategy and approach to combat with it. There should be no distinction between terrorist groups. Every country must fulfill its commitments to eliminate terrorist safe havens and bring terrorists to justice,” Modi said, without mentioning the neighbouring country.

Obama and Modi emphasised the critical importance of expanding clean energy research, development, manufacturing and deployment, which increases energy access and reduces greenhouse gas emissions. The leaders announced actions to advance India’s transition to a low-carbon economy.