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US reopens door to tech exports

world Updated: Jan 26, 2011 02:04 IST
Yashwant Raj
Yashwant Raj
Hindustan Times
Highlight Story

The US on Monday cleared the way for the resumption of high technology defense and aerospace exports to India ending a restrictive control mechanism in place since the Pokhran II nuclear tests in 1998.

Nine Indian state-owned defense and aerospace companies were taken off the list of entities to which US companies cannot sell dual-use technology "with both civilian and military uses" without their government's permission. http://www.hindustantimes.com/Images/HTEditImages/Images/26_01_11_pg11a.jpg

The de-listed entities are Bharat Dynamics and four affiliates each of the Indian Space Research Organisation and the Defence Research and Development Organisation.

India is also being placed in a category free to import from the US material that could be used in the construction of missiles or nuclear, chemical and biological weapons, but not verifiably intended for such use.

Though the dismantling of the export controls was announced by President Barack Obama on his November tour of India, it became effective Monday with the publication of a notice updating the US's Export Administration Regulations.

The third part of the deal, membership for India to international export control regimes such as the Nuclear Suppliers Group and the missile technology control regime, an administration official said, work is under way.

Commerce secretary Gary Locke, whose department made these changes, called them a "significant milestone" and said "moving forward with export control reforms"will facilitate high technology trade.

But here is what this means.

"Indian entities not directly involved in the nuclear weapons programme will be able to import a range of dual-use technologies far more easily than they have in the past," said Ashley Tellis, former US official closely involved with the India-US nuclear deal.

A delegation of 24 US companies is going to India with Locke early February in search of such export orders in these same sectors of high-technology defense and aerospace decontrolled on Monday.

It has not been a highly lucrative trade for either country yet "amounting to less than one per cent of the annual turnover of $36 billion. But there is a huge potential here. It is the greatest market of opportunities", said an administration official.

The controls never took the shape of sanction except in the early years since 1998. As relations between the two countries improved the nature of the controls changed from being blanket to case-by-case.

But the rollback was anything but easy. It was on the wish list of the Indian government constantly since the signing of the India-US civilian use nuclear deal, which loudly proclaimed India's return to the fold.

The rest should have followed. But didn't, not as smoothly as expected. The talks were painstakingly slow and often seemed in the way of the two countries' desire to see the obstacle go.

Sometimes too slowly, "but surely" the obstacles are being removed that impede a more robust US-India economic ties, said Karl Inderfurth, former assistant secretary of state with expertise on South Asia.

The controls are not gone completely though.

For one, India can't buy a nuclear submarine if it wanted to. There are other controls still in place, imposed by other departments such as state and defense and applicable, and enforced indiscriminately by the US on its closest allies.