Obama Inks Deal with Indian PM on Nuclear Cooperation

US President Barack Obama (left) and Prime Minister Narendra Modi shake their hands after their joint address, in New Delhi, on January 25, 2015. (AP photo)
US President Barack Obama (left) and Prime Minister Narendra Modi shake their hands after their joint address, in New Delhi, on January 25, 2015. (AP photo)

PM Narendra Modi and US President Barack Obama seemed set to elevate India-US ties to a new level with a remarkable breakthrough on Sunday in India’s moribund 2008 civil nuclear cooperation agreement with the US.

With Obama using his executive powers to roll back the condition that US authorities be allowed to monitor use of nuclear material purchased by India even from third countries, the two leaders successfully finalized the terms and conditions for operationalizing the civil nuclear deal.

TOI had reported on Sunday that a breakthrough was on the horizon with the president expected to use his executive powers, while a day earlier it had reported what was the sticking point.

In his press statement in which he confirmed the development, Modi said US and India shared a natural global partnership. Indian officials attributed the successful conclusion of nuclear talks to Obama’s intervention as intrusive inspections by US authorities was the lone issue that was threatening to derail the contact group meeting last week in London.

Officials said that the two countries will follow the Canada template, which India had been seeking (as reported by this paper earlier), under which US authorities wouldn’t insist on inspections over and above those by IAEA.

“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,” said Modi in a joint press interaction with Obama.

Obama also backed India’s phased entry into the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement, and the Australia Group to strengthen non proliferation and export control regimes.

For Modi, this development will not just stamp his authority on foreign relations but also earn him political mileage at home. While the administrative arrangements were taken care of by the gesture from Obama, India’s controversial 2010 nuclear liability law too remained unscathed.

Describing Obama’s visit as historic, foreign secretary Sujatha Singh reaffirmed that both the contentious sections — section 17 (b) which guarantees right of recourse against suppliers in the event of an accident and section 46 which exposed suppliers to tort claims and potentially unlimited liability — conformed to IAEA’s Convention on Supplementary Compensation for Nuclear Damage (CSC).

MEA joint secretary for disarmament Amandeep Gill said India remained committed to ratifying CSC. In a show of bonhomie, Modi and Obama walked on the lawns of Hyderabad House after their luncheon meeting during which the nuclear issue too was discussed. Sujatha Singh said that the political leadership had played a key role in breaking the logjam.

“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,” said Obama at the press interaction. “This is an important step that shows how we can work together to elevate our relationship.”

The administrative arrangements which the US sought in the London meeting of the contact group had turned into a real hurdle even though the meeting saw considerable progress over the liability issue.

The US has agreed to India’s proposal to build a risk-management insurance pool of Rs 1,500 crore to provide cover to suppliers who shunned the civil nuclear agreement because it made them liable to pay compensation in the event of a nuclear accident. While General Insurance Corporation of India (GIC) and other national insurers are expected to contribute Rs 750 crore for the pool, the remaining half will be provided by the government.

The two countries were also seeking to address concerns over section 46 which leaves suppliers exposed to tort claims. This section empowers ordinary citizens to file tort claims against suppliers, something which was seen by the US industry as opening US companies to potentially unlimited liability.

The development is likely to be touted as a major achievement? by the Modi government as the two countries can now move to effect civil nuclear “within the framework of law” and without having to dilute the liability law.

The civil nuclear cooperation with the US could never really take off in the past seven years because of differences over liability and administrative issues despite India having allotted sites to US companies in Andhra Pradesh and Gujarat.

SOURCE: Sachin Parashar