Few were willing to bet that the breakthrough would come through amid the inevitable exuberance that accompanies a visit by a US president. But two leaders — one keen on clinching his legacy after six tumultuous, uncertain years at the helm and the other intent on building his reputation as a transformative moderniser — have managed to push their establishments to take decisions that can nudge bilateral ties in a new direction. President Barack Obama and Prime Minister Narendra Modi shepherded discussions ably and the ministry of external affairs announced that both sides have reached an ‘understanding’ on nuclear liability.
There will still be questions about the legal validity of the approach that the two governments have worked out; the full ramifications will soon be discussed threadbare in the public sphere. As and when it fully unfolds, the operationalisation of the nuclear deal promises to be the game-changer that both sides have been waiting for. If the questions about supplier liability and the right of citizens to take legal recourse are satisfactorily addressed, it can transform attitudes within business communities in the US and elsewhere who have been sceptical of India’s ability to take politically difficult decisions. Mr Modi’s government is having a gradualist approach to economic reform in line with opposing domestic constituencies and the lack of numbers in the Rajya Sabha. The nuclear breakthrough will have the rippling effect of generating confidence in Mr Modi’s decision-making and thereby on India’s prospects even as it hopes to attract much-needed foreign investment to drive infrastructure projects.
The breakthrough will have geopolitical effects too. Few envisaged that Mr Obama would be the president to break the drift in the relationship. And in this he was helped along by Mr Modi. In the words of a well-known commentator, Mr Modi had prior to becoming the PM broken ranks with the BJP on nuclear liability, the insurance Bill and foreign direct investment in multi-brand retail. Moving past the nuclear bottleneck will transform the optics of India-US ties globally especially for China and Pakistan— and act as a vector to advance on other issues relating to intelligence cooperation, cyber security and maritime cooperation.
There will, of course, be differences to negotiate. Both sides differ on Pakistan’s role in Afghanistan’s politics and Russia’s actions towards Ukraine. They disagree on the extent of India’s obligations in tackling international challenges — but nuclear progress, if translated into commercial prospect, will play an enormous role in binding the two countries together.