Visit of US President Obama

President Barack Obama reached New Delhi on 25 January 2015,  along with First Lady Michelle Obama, for a three-day visit during which he was the Chief Guest at the Republic Day function. He arrived to a red-carpet welcome by Prime Minister Narinder Modi, whi, in a departure from protocol, received him at the Palam

The breakthrough in operationalisation of the stalled nuclear deal was the major outcome of the talks between Prime Minister Narendra Modi and President Barack Obama. It is understood that the breakthrough was achieved over one-on-one talks between the two leaders over tea.

The ticklish liability issue had stalled the implementation of the nuclear agreement inked in 2005 between then US President George Bush and former Prime Minister Manmohan Singh. The Indian liability law holds the suppliers directly liable in case of a nuclear accident while countries like France and the US have asked India to follow global norms under which the primary liability lies with the operator.

Since all the nuclear power plants in the country are run by the government-owned Nuclear Power Corporation of India Ltd (NPCIL), following international norms will mean the government would have to pay heavy damages in case of an accident.

New Delhi had ruled out changes in its 2010 liability legislation that has choked off American investment, but offered to set up an insurance pool to indemnify companies that build reactors in the country against liability in case of a nuclear accident, as a way around the law.   Under the plan readied by State-run reinsurer GIC Re, insurance would be bought by the companies contracted to build the nuclear reactors who would then recoup the cost by charging more for their services. Alternatively, the NPCIL would take out insurance on behalf of these companies.

Both leaders also held extensive discussions on enhancing cooperation in crucial areas of defence, trade and commerce and climate change.

Prime Minister Narendra Modi gifted President Obama a copy of the first telegram from America to India’s Constituent Assembly.  The telegram, headlined “Message of Goodwill”, was read out at the inaugural sitting of the Constituent Assembly of India 9 December 1946.

India and United States signed three Memoranda of Understandings (MoUs) to give a boost to the Centre’s flagship ‘smart cities’ scheme.  USA has agreed to partner in developing three smart cities in Allahabad, Ajmer and Visakhapatnam.  As per the pacts, USA will assist the cities in project planning, infrastructure development, feasibility studies and capacity building.  The State Governments, for their part, will provide resources like technical information and data related to smart cities planning; staff, logistical and travel support and budgetary resources.

Vowing to take defence ties to a “new level”, India and the US renewed their 10-year Defence Framework Agreement and agreed in principle to pursue joint development and production projects.  The new framework will enhance bilateral defence partnership by stepping up joint military exercises and through more in-depth intelligence-sharing, maritime security efforts among others.

The first framework agreement was signed in the US in 2005 by the then Defence Minister Pranab Mukherjee and his US counterpart in the previous Bush administration, Donald Rumsfeld.

The most-significant aspect would be the Defence Trade and Technology Initiative (DTTI)—aimed at enhancing the ones existing under the Defence Policy Group, which lay out the path for future defence cooperation. The US is pushing for what it calls “transformative defence technologies” for co-development and co-production with India under DTTI, which could become the hallmark of the Modi government’s ‘Make-in-India’ initiative.

The US has offered India 17 hi-tech items of military hardware for co-production and co-development under DTTI.  Of the 17, India is understood to be interested in five, including unarmed, unmanned aerial vehicles (UAVs) and aircraft landing system for aircraft carriers.

US President Barack Obama announced $4 billion in government-backed investments and lending to India, as he sought to scale up a trade relationship he said was “defined by so much untapped potential”.   At a CEO summit hosted by Prime Minister Narendra Modi in New Delhi, Obama said that US Export-Import Bank would finance $1 billion in exports of ‘Made-in-America’ products.   The Overseas Private Investment Corporation will lend $1 billion to small- and medium-sized enterprises in under-served rural areas of India.

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