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New Delhi - In a glow of bonhomie, US President Barack Obama and Indian Prime Minister Narendra Modi announced a breakthrough on nuclear trade on Sunday, a step that both sides hope will help establish an enduring strategic partnership.
Obama said the two countries had made progress on two issues holding up commercial civil nuclear co-operation, one of the major irritants in bilateral ties.
"We are committed to moving towards full implementation," Obama told a joint news conference with Modi in the Indian capital. "This is an important step that shows how we can work together to elevate our relationship."
The agreement resolved differences over the liability of suppliers to India in the event of a nuclear accident and US demands on tracking the whereabouts of material supplied to the country, US 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.
Signalling 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.
READ: Bear hug with Modi gets Obama's India trip off to warm start
After a working lunch that included kebabs made with lotus stem, figs and spices, the two leaders got down to talks to finalise agreements on climate change, renewable energy, taxation and defence cooperation.
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.
Earlier, the two leaders walked and talked together in an elegant garden and sat outside over tea. Modi, who sold tea on a railway platform as a child, poured a cup for Obama.
