New Delhi: Indian and US officials are racing against time in trying to resolve issues and operationalising the landmark civil nuclear deal that was signed between former Indian Prime Minister Manmohan Singh and US president George Bush (junior) eight years ago.

With President Barack Obama due to arrive in India with emphasis on increasing bilateral trade, Indo-US contact group talks centred on the nuclear liability issue which has stalled the implementation of the agreements inked in 2007.

“It is critical that we reach an agreement before Air Force One lands. It could be a historic moment for both the countries, as we are keen to ensure electricity for all in India,” said a government official.

US officials in India are worried, that apart from the gesture of an US president being the chief guest during India’s republic day parade, they cannot offer much spin to the high-profile visit.

Ironically, Bharatiya Janata Party, then in opposition, had forced a stringent liability civil liability nuclear damage (CLND) Act 2010, in the Parliament, along with the Left parties. Under pressure from the BJP, the previous Congress-led Manmohan Singh government had enacted the nuclear liability law which makes suppliers liable for damages in the event of any nuclear mishap.

According to the law, the operator is required to set aside Rs15 billion (Dh900 million) in case of a disaster and pay the affected parties. The operator can seek Right to Recourse from the suppliers, which makes investment in the nuclear sector by foreign players more difficult.

The government had asked the General Insurance Company (GIC) to insure the atomic power reactors, but the public sector undertaking did not have the required monetary capacity.

Now as a ruling party it has formed a ‘joint contact group’ on nuclear issues set up at the initiative of Prime Minister Modi, when he met Obama in the White House in September.

The nuclear deal known in India as 123 agreements signed on August 2007 after three-year-long protracted negotiations hit last-mile hiccups, especially differences on liability. Since then it has not translated into any investments or the technology transfer on the ground, despite India having offered sites for nuclear reactors.

Sources here say India has offered a proposal to set up a nuclear insurance pool to compensate suppliers in case of a nuclear accident. Officials said since the liability law cannot be tampered with as it was an Act approved by Parliament, the insurance pool are the best option available.

“We are working on various models to overcome the roadblocks that lie in implementing the project,” said an official of the Prime Minister’s office.

Another option, which was being explored, was issuing of catastrophe bonds or a blend of catastrophe bond and sovereign guarantee, government sources said.