Modi, Obama reach 'breakthrough' on N-deal, agree to enhance strategic ties

New Delhi: India and the US on Sunday broke the 7-year-old logjam in operationalising their landmark civil nuclear agreement with an announcement that "the deal is done" after talks between President Barack Obama and Prime Minister Narendra Modi.

In what Obama called a "breakthrough", the two sides have resolved key hurdles pertaining to the liability of suppliers of nuclear reactors in the event of an accident and the tracking of fuel supplied by the US and other countries for its proposed nuclear plants.

"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.

The White House said tonight that the understanding on the civil nuclear programme resolves the US concerns on both tracking and liability.

"In our judgement, the Indians have moved sufficiently on these issues to give us assurances," Ben Rhodes, US Deputy National Security Adviser told American journalists.

According to Rhodes, it will still be for the US companies to assess the market and decide whether to partake in India's nuclear programme. Neither country needed to take legislative action to complete the agreements reached between the two leaders.

The nuclear deal was the centrepiece of Obama-Modi discussions given its contentious nature but the two leaders reached understanding on a number of other areas including defence.

Obama said US and India have made progress on defence partnership and decided to renew the framework agreement for 10 more years.

"Today, we have also decided to take our growing defence cooperation to a new level. We have agreed, in principle, to pursue co-development and co-production of specific advanced defence projects.

"These will help upgrade our domestic defence industry; and expand the manufacturing sector in India. We will also explore cooperation in other areas of advanced defence technologies," Modi said.

The Foreign Secretary said that assurances are given to the US side on both the liability clause and tracking issues.

"The liability provisions and administrative arrangements finalised under 123 act (tracking) are consistent with our bilateral legal arrangements and contracts and IAEA safeguards and international laws and obligations," Singh said.

"The civil nuclear agreement was the centrepiece of our transformed relationship, which demonstrated new trust. It also created new economic opportunities and expanded our option for clean energy.

"In the course of the past four months, we have worked with a sense of purpose to move it forward. I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability," Modi said.

On defence and security, she said both the countries have agreed on four projects under the Defence Technology Transfer Initiative (DTTI) including exploration of development of advanced jets in India.

"What we have done is to operationalise an initiative and identified projects," Indian Ambassador to the US Jaishankar said.

The deal on nuclear cooperation and other areas was clinched between Modi and Obama after discussions spread over three hours at the delegation level as well as one-on-one talks besides a tete-a-tete on the lawns of the Hyderabad House reflecting the warm personal chemistry between the two leaders.

At the outset, both the leaders said they were committed to deepening relations between the two countries and the fact that Obama is the first US President to be the Chief Guest at the Republic Day celebrations and also the first to visit India twice were signs of the growing relations.

On terrorism, the Prime Minister said it remains a principal global threat taking on a new character even as existing challenges persist.

"We agreed that we need a comprehensive global strategy and approach to combat with it. There should be no distinction between the terrorist groups. Every country must fulfil its commitments to eliminate terrorists safe havens and bring terrorists to justice," he said.

Modi said the two countries will deepen their bilateral security cooperation against terrorist groups and further enhance counter-terrorism capabilities including in the area of technology.

Touching on regional cooperation, Modi said the two countries renewed their commitment to deepen cooperation to advance peace, stability, prosperity in Asia Pacific and Indian Ocean region which is critical for the future of the two countries and the world.

Modi said they also discussed working on how to help in the transformation of Afghanistan, apparently after complete withdrawal of the US troops.

Obama said both the countries are going to be strong and reliable partners for people of Afghanistan.

The two leaders said they have decided to scale up their economic relationship including holding talks in future on a bilateral investment treaty.

Modi said India and the US will also restart discussions on a social security agreement which is important for the hundreds of thousands of Indian professionals working in the US.

Obama said in the last few years there has been a 60 per cent increase in the bilateral trade and wanted the trade level to reach USD 100 billion which he hoped could be achieved with Modi government's commitment to liberalise ease of doing business.

According to the liability act 2010, the operator is required to set aside Rs 1,500 crore in case of a disaster and pay the affected parties. The operator can seek Right to

Recourse from the suppliers, which makes investment in the nuclear sector by foreign players more difficult.

The government had asked the General Insurance Company (GIC) to insure the atomic power reactors, but the public sector undertaking did not have the required monetary capacity.

Wary of allowing foreign insurance companies in the nuclear sector, the government then decided to come up with a nuclear insurance pool, where many companies can pool in the resources to insure the reactors.

While the four government insurance companies pooled in Rs 750 crore, which is half the required amount, the government under the complete risk management will pool in rest of the amount in case of a mishap.