The understanding, though short on specifics, moves toward resolving one of a number of nuclear-related issues that have hamstrung the countries for years and has prevented the implementation of a landmark nuclear deal reached during the George W. Bush administration.
“We’re committed to moving towards full implementation. And this is an important step that shows how we can work together to elevate our relationship,” Obama said.
The White House said the agreement was reached through a combination of insurance pools and an assurance that reducing the liability would be within the framework of the 2008 agreement. It will now be up to companies to decide whether or not to go forward with doing business in India. Officials said that, despite the law, the change would not require additional legislation in India.
Former prime minister Manmohan Singh staked his first term on the landmark civil nuclear agreement, which ended India’s three decades of nuclear isolation and held the promise of billions in sales and thousands of jobs for U.S. energy companies. The U.S. government and private sector were stunned when the legislature passed the liability law. It has remained a bone of contention between the two countries for years, with both talking about ways to interpret the law that would be more amenable to large, multinational nuclear corporations.
During that time, India’s enthusiasm for nuclear power was dampened by the nuclear disaster in Japan and the difficulty of securing land on which to build nuclear reactors. Nuclear power today represents only about 2 percent of India’s total installed power capacity.
The announcement contained few specific details, and some are skeptical.
“The Indian government is going to town saying breakthrough, breakthrough, but there are a lot of questions that still remain," said R. R. Subramanian, a senior scholar on nuclear disarmament at the Institute of Defense Studies and Analysis.
Obama and Modi said they have made progress on other issues, including climate change, saying they are committed to phasing out carbon emissions and pursuing a “strong global climate agreement” at talks in Paris later this year. The two countries reached an agreement in September to help the country shift to renewable fuels.
Asked whether the landmark climate deal with China put pressure on India to cut its emissions, Modi said that “India is an independent country." He added that "there is no pressure on us from any country or any person” but that there is pressure on all people to combat climate change.
Renewable energy is scarce and expensive here, and about 300 million people live without power. Coal power is growing rapidly.
The countries renewed their 10-year defense framework agreement and have agreed in principle to pursue co-development of weapons.
The progress was, in many ways, dwarfed by talk of the budding close relationship between the two men, which started when Modi came to Washington in September as the two countries looked to revive their stagnating relationship.
Modi broke with tradition and met Obama at the airport, giving the president a big hug after he bounded down from Air Force One. Obama was welcomed at a lavish ceremony at the presidential palace on a cool, foggy afternoon, traveling there in a limousine trailed by dozens of red-clad men on horseback and receiving a 21-gun salute. On Sunday night the president attended an extravagant state dinner. He and First Lady Michelle Obama were ushered into a great hall at the presidential palace by a military escort, announced by trumpets.
“Barack and I have forged a friendship,” Modi said earlier through an interpreter. He made a statement in English and answered questions in Hindi. “There is openness when we talk, and we even joke and share a lot together. I think this is a chemistry which has not only brought Washington and Delhi, Barack and I, closer, but also the two peoples of the two countries closer.
The trip is one filled with symbolism that they hope will translate to a stronger relationship between the two countries. Obama is the first president to visit India twice while in office, after receiving an unprecedented invitation to be the guest at the annual Republic Day parade, which celebrates the adoption of the Indian constitution.
The personal relationship between the two men blossomed when Modi traveled to Washington in September. The two men talked over a lavish dinner, even though Modi was on a religious fast, and visited the Martin Luther King Jr. memorial, where they invoked Mohandas Gandhi.
Obama visited the site that holds Gandhi’s ashes on Sunday, slowly walking around the memorial and throwing rose petals on it. Obama spread dirt around a sapling, watering it with a silver pitcher and said repeatedly, "big and strong."
His friendship with Modi came as somewhat of a surprise. Obama tends to be reticent among world leaders, rarely striking up friendships in the way that his predecessor, George W. Bush, did. The notable exception is British Prime Minister David Cameron, whom Obama has on occasion called “bro.”
The rapport between the two men, forged over talk of campaigning, governing and ascending politically after coming from humble backgrounds, came shortly after Modi was elected and the two countries saw the visit as a way to try to revive their relationship. It came at a time when India felt overlooked by the administration’s focus on other Asian countries -- and as the U.S. realized that it needs India as a counterweight to China.
“I think from the very beginning, there were quite a few things that actually led to that personal affinity and that ability to build rapport,” said Phil Reiner, the Senior Director at the National Security Council for South Asia.
In many ways, having Modi be the leader to advance the U.S.-India relationship is surprising, given his fraught relationship with the United States. In 2005 the State Department revoked his visa on grounds that he had violated religious freedom by not doing enough to stop Hindu-Muslim riots in 2002 while he was chief minister of the state of Gujarat. More than 1,000 people were killed.
Despite this, Modi has taken a number of pages from the U.S. playbook when it comes to campaigning and governing. Modi employed campaign tactics modeled after Obama’s, using social media and micro-targeting and displaying posters akin to the one Shepard Fairey made of Obama. In August, Modi chanted Obama’s campaign phrase, “Yes We Can,” at a rally.
“In some ways Modi is the most American-like Indian politican there’s been in years,” said Tanvi Madan, a fellow and director of the India Project at the Brookings Institution.
Annie Gowen and Rama Lakshmi contributed reporting.