U.S. President Barack Obama and Indian Prime Minister Narendra Modi unveiled a deal on Sunday aimed at unlocking billions of dollars in nuclear trade, a step that both sides hope will help establish an enduring strategic partnership.
The two countries reached an understanding on two issues that, despite a groundbreaking 2006 agreement, had stopped U.S. companies from setting up reactors in India and became one of the major irritants in bilateral ties.
"We are committed to moving towards full implementation," Obama told a joint news conference with Modi after he arrived in New Delhi. "This is an important step that shows how we can work together to elevate our relationship."
The new deal resolved differences over the liability of suppliers to India in the event of a nuclear accident and U.S. demands on tracking the whereabouts of material supplied to the country, U.S. ambassador to India Richard Verma told reporters.
"Ultimately it's up to the companies to go forward, but the two governments came to an understanding," he added.
Signaling his determination to take ties to a higher level, Modi broke with protocol to meet and bear-hug Obama as he landed in New Delhi earlier in the day. It was a remarkable spectacle given that, just a year ago, Modi was persona non grata in Washington and denied a visa to the United States.
After a working lunch, the two leaders emerged with deals on defense cooperation that included the joint production of drone aircraft and equipment for Lockheed Martin Corp's C-130 military transport plane.
They agreed to a number of financing initiatives aimed at helping India increase its use of renewable energy.
But Modi cautioned that work was still needed to create a solid partnership between the world's two largest democracies.
"We have to convert a good start into lasting progress. This requires translating our vision into sustained action and concrete achievements," he said, standing next to Obama.
On Monday, Obama will be the first U.S. president to attend India's Republic Day parade, an annual show of military might long associated with the anti-Americanism of the Cold War, and will host a radio show with Modi.
His presence at the parade at Modi's personal invitation is the latest revival in a roller-coaster relationship between the two largest democracies that just a year ago was in tatters.
Up to 40,000 security personnel have been deployed for the visit and 15,000 new closed-circuit surveillance cameras have been installed in the capital, according to media reports.