Indo-US Nuclear Deal Seems 'Operational'

Eight years after it was signed, India and the US seem to have broken the "log-jam" to make the Indo-US civil nuclear deal operational. This came after delegation level talks between the two sides and a tete-a-tete between visiting US President Barack Obama and Prime Minister Narendra Modi in Delhi on Sunday.

A "risk-transfer" mechanism by creating an insurance pool in which four companies—both suppliers and operators of the proposed nuclear projects—will put in Rs 700 crore, while the remaining balance will be met by the government, was the formula agreed between the two sides to break the deadlock.

Prime Minister Modi described the "civil nuclear agreement" as the "centerpiece" in India’s relations with the US and said it had "transformed" our relationship and demonstrated a "new trust" between the two sides. He pointed out that "it also created new economic opportunities and expanded our option for clean energy."

According to him, "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."

Later in the evening the Indian foreign secretary Sujatha Singh said, "The deal has been done within the Indian legal framework." This indicates that in the event of an accident in a nuclear plant, victims will be allowed to find legal recourse in Indian courts against suppliers, even if they happen to be American companies. However, while these seem to be the impression given by the Indian side through their remarks on the contentious subject, the fine print of the deal would only emerge in the coming days.

Operationalizing of the Indo-US nuclear deal was stuck for at least five years after the Indian parliament enacted a law called the Civil Liability for the Nuclear Damage Act, 2010. US companies, backed by their government, stayed away from investing in the civil nuclear market in India on the plea that the provisions in the legislation on compensation and insurance, made their participation in the nuclear field unviable.

The American side that had earlier insisted on "tracking" the proposed nuclear reactors developed by them by their own inspectors, also gave up on their position after today’s discussions.

Early Sunday morning, President Obama, accompanied by his wife Michelle, arrived in Delhi on a three-day visit. The significance of the visit lies not only in the fact that he will be the first American President to be India’s Chief Guest for the Republic Day celebrations, but also that he will be the only occupant of the White House to visit India twice during his presidency. The growing bonhomie between two sides evident for the past decade and half became sharper this morning when Prime Minister Modi arrived at the airport to receive the Obamas. He did so with a warm hug to the US President and by warmly welcoming Michelle. Obama was given a ceremonial reception at the Rashtrapati Bhawan and later visited Rajghat to pay homage to Mahatma Gandhi, where he also planted a sapling. Later he and Prime Minister held several rounds of discussions, separately while sipping tea on the lawns of Hyderabad House, over lunch and during delegation level talks, and also in the evening where the US President was given a banquet by his Indian counterpart, Pranab Mukherjee.

In terms of "optics" and "photo-ops" Obama and Modi kept the horde of camerapersons and photographers happy throughout the day as they hugged and back-slapped each other on more than one occasion and publicly addressed each other by their first name. Obama also spoke a few lines in Hindi during his joint media address with the Indian Prime Minister.

Apart from progress on the civil nuclear front, the two sides also agreed to cooperate on defense with promise of joint production and development of UAVs, aircraft carriers, jet-engines and heavy field guns. Tomorrow, after participating in the Republic Day celebrations, the two sides will address business leaders of the two countries to pave the way for meaningful investment.

Apart from these developments, there was also re-affirmation from the US President to support India’s candidature at an expanded and restructured UN Security Council and also in the various non-proliferation regimes to help civil nuclear commerce and hi-technology transfer to India. Both leaders also pledged to closely cooperate in their fight against terrorism while making it clear that all countries should fulfill their commitment to punish those involved in terror acts and also deny them safe haven.