The discussions are over, and India and the US are ready with the biggest announcement of President Barack Obama’s visit: decontrol of the sale of sensitive equipment to India, and the completion of India’s nuclear rehabilitation.
“We will be able to make a significant announcement about the modernisation of export controls systems between the US and India,” secretary of commerce Gary Locke told HT .
He refused to share details, saying: “I am not going to take away from the announcement ... everyone will be pleased by the announcement to be made next week.”
HT was first to report (Hi-tech N-sanctions against India may go, October 21) that the removal of sanctions on the sale of dual use technology to India by the US would be announced during Obama’s visit. Locke’s statement has confirmed this.
The system referred to by Locke is made up of three elements, all related to the fallout of the Pokhran-II nuclear tests in 1998. The US had then reacted swiftly with sanctions.
The first was a blanket ban on sale of dual use tech — equipment with civilian and military use – to India. This was eased subsequently but remained subject to permission.
Second, a number of Indian companies/departments were blacklisted for trade with US firms. Indian space agency ISRO and defence research body DRDO are on that list.
Third, India was excluded from multilateral export control regimes such as the Nuclear Suppliers’ Group and Missile Tehcnology Control Regime. The controls refer to a system of licensing required for any US exporter selling dual use equipment to India.
“We know this was of great importance to India,” Locke said. “We worked hard on it and have made good progress. I look forward to the announcement.”
Locke also addressed other questions of interest, outsourcing being the most vital. Wasn’t Obama’s opposition to outsourcing an odd position to take for the president of the US, the leading champion of globalisation and free trade?
“The President understands we live in a global economy,” Locke said, “but he has been concerned about not giving US companies tax incentives to ship jobs overseas.”
Obama has withdrawn tax concessions to companies with substantial operations overseas. Explaining this, Locke said: “All he wants is a level playing field.”
Curbs on FDI
The US has also been pressing India to open up it multi-brand retail market. But there are fears in India that this might put the millions of street-corner grocers out of market. Making reassurances on this front, Locke said: “If US companies are allowed to open up such facilities, they are going to hire people from India.