India and the U.S. today reached a breakthrough on the stalled civil nuclear agreement by agreeing on commercial cooperation and decided to take defence cooperation to a new level including on upgrading domestic defence industry and advanced technologies.

The contours of the operationalisation of the nuclear deal, which has been in limbo for the last more than six years, were not immediately available, although President Barack Obama described it as a “breakthrough“.

The deal on nuclear cooperation and other areas was clinched between Prime Minister Narendra Modi and Obama after discussions spread over three hours at the delegation level as well as one-on-one chat besides a tete-a-tete on the lawns of the Hyderabad House reflecting the warm personal chemistry between the two leaders.

In his opening remarks at the joint media interaction, Modi disclosed that on the nuclear deal the two countries “are moving towards commercial cooperation, consistent with our law, our international obligations and technical and commercial viability.”

At the outset, both the leaders said they were committed to deepening relations between the two countries and the fact that Obama is the first US President to be the Chief Guest at the Republic Day celebrations and also the first to visit India twice were signs of the growing relations.

“In the last few months, I see new excitement and confidence in this relationship. I see renewed energy in our engagement. I thank you for your leadership and for setting the tone last September.

“The civil nuclear agreement was the centrepiece of our transformed relationship, which demonstrated new trust. It also created new economic opportunities and expanded our option for clean energy.

“In the course of the past four months, we have worked with a sense of purpose to move it forward. 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,” Modi said.

It was not known how the two countries have overcome the issues of liability clause in the Civil Nuclear Damage Law over which the U.S. reactor manufacturers have serious reservations.

The U.S. is also believed to insisting on tracking fuel supplies, even from third countries, to the reactors their suppliers will be building in India. New Delhi is said to be opposing such a condition as being intrusive and would subject itself only to IAEA safeguards.