HTCG needs new man­date


[ By Ran­jeet Kumar

W] ith the an­nounce­ment of the visit of Pres­i­dent Barack Obama to In­dia on the eve of In­dia’s Repub­lic Day next year, In­dia and US look to gal­vanise bi­lat­eral de­fence ties in ac­cor­dance with the man­date given to the High Tech­nol­ogy Co­op­er­a­tion Group (HTCG). As the Repub­lic Day showcases In­dia’s mil­i­tary might, In­dia will find a good op­por­tu­nity to dis­play some of the sys­tems ac­quired from US like the Globe­mas­ter, Su­per Her­cules, INS Jalaswa, etc dur­ing the Repub­lic Day pa­rade, dur­ing which Pres­i­dent Obama will be the chief guest. Tra­di­tion­ally In­dia has been a ma­jor im­porter of Rus­sian ori­gin de­fence sys­tems, but a grad­ual shift has oc­curred and the Rus­sians are be­ing re­placed by the Americans and the Is­raelis.

After Prime Min­is­ter Naren­dara Modi’s visit to Wash­ing­ton, In­dia and US have re­ac­ti­vated the high pro­file HTCG after a gap of three­and-a-half years, which held its 9th meet­ing (Novem­ber 20, 2014) in New Delhi at gov­ern­ment-to-gov­ern­ment and business-to-business level and also jointly, dur­ing which many is­sues of con­cern to each other were dis­cussed thread­bare and rec­om­men­da­tions made to re­move bu­reau­cratic bot­tle­necks aris­ing out of Cold War mind­sets. After the meet­ing both sides ex­pressed con­fi­dence that the re­vived HTCG, post-Modi visit to US, will in­fuse new dy­namism in In­dia-US de­fence co­op­er­a­tion. Sens­ing huge op­por­tu­ni­ties in In­dian de­fence mar­ket the US side has reaf­firmed the need for co-de­vel­op­ment and co-pro­duc­tion pro­grammes, but the In­dian side has ex­pressed doubts in view of the re­stricted ac­cess to In­dian en­ti­ties to sen­si­tive dual-use tech­nolo­gies. This com­plex is­sue can only be dealt with ef­fec­tively if In­dia gains en­try to the hal­lowed ex­port con­trol regimes like the Nu­clear Sup­pli­ers Group, the Aus­tralia Group, the Wasse­naar Ar­range­ment and the Mis­sile Tech­nol­ogy Con­trol Regime.

The US side was rep­re­sented by Eric L. Hirschhorn, Un­der Sec­re­tary for Bureau of In­dus­try and Se­cu­rity, US Depart­ment of Com­merce, who re­it­er­ated ex­pres­sions of in­tent to com­mit his gov­ern­ment’s support to In­dia’s en­try into all four ex­port con­trol regimes to which the In­dian For­eign Sec­re­tary re­sponded by say­ing that the US must set a time frame for In­dia’s en­try into th­ese clubs. Hirschhorn said that it is in US in­ter­est to see In­dia’s en­try into th­ese clubs for strate­gic rea­sons as it will help ful­fill our common na­tional se­cu­rity in­ter­ests. He said that US re­mains com­mit­ted to the above four mul­ti­lat­eral ex­port con­trol regimes which will bring us closer and help ex­pand US re­la­tions with In­dia. He said, “Our part­ner­ship in ex­port con­trols and strate­gic trade is crit­i­cal to en­hanc­ing this strate­gic re­la­tion­ship for three rea­sons. First, it helps ful­fill our common na­tional se­cu­rity in­ter­ests. Sec­ond, it demon­strates a will­ing­ness to work to­gether on ex­port con­trol is­sues that af­fect global non­pro­lif­er­a­tion and home­land se­cu­rity. Lastly, it ad­dresses our shared eco­nomic part­ner­ship.”

The HTCG was set up in 2002 and since then the US side has dras­ti­cally re­duced the ex­port con­trol list to In­dia and ac­cord­ing to the US Un­der Sec­re­tary 15 years ago 24 per cent of US ex­ports re­quired ex­port li­cences but now this has come down to three-tenth of one per cent to In­dia. Very few ex­port li­cences ap­pli­ca­tions are re­quired to be pro­cessed. In fact the Pen­tagon has con­trol list con- verted into pos­i­tive list, con­trol­ling only few. Even the mil­i­tary sen­si­tive items have been trans­ferred to the US Depart­ment of Com­merce, which has re­sulted in 64 per cent re­duc­tion in de­part­men­tal li­cens­ing. Trans­fer of cer­tain aero­space items has re­sulted in timely ap­proval of In­dian ap­pli­ca­tions.

In spite of huge re­duc­tion in US ex­port con­trol list, In­dian side is not very happy as In­dian For­eign Sec­re­tary Su­jatha Singh com­plained that In­dia can­not be a tar­get and part­ner coun­try at the same time. She talked of the need for HTCG to adopt to chang­ing times and pri­or­i­ties which should be in tune with the de­mands of the day. She com­mented that the work­ing group has not ad­e­quately been har­nessed, which of­fers op­por­tu­ni­ties to syn­er­gise and ex­ploit po­ten­tials in our bi­lat­eral ties.

Su­jatha Singh said, In­dia’s rep­re­sen­ta­tion in th­ese ex­clu­sive clubs will be mu­tu­ally ben­e­fi­cial given the common non-pro­lif­er­a­tion ob­jec­tives and the con­tri­bu­tions that In­dian in­dus­try can make to the global econ­omy.

She as­serted that the ex­port con­trol re­forms were all about strik­ing a bal­ance be­tween na­tional se­cu­rity in­ter­est and eco­nomic in­ter­est both of which were cru­cial for a sov­er­eign state and made a sig­nif­i­cant state­ment that a coun­try can­not be a part­ner as well as a tar­get at the same time.

In the HTCG meet­ing a range of is­sues were dis­cussed – from mar­ket ac­cess, tar­iff and non-tar­iff bar­ri­ers, strate­gic trade to ex­port con­trols. Ac­cord­ing to Sid­harth Birla, Pres­i­dent of FICCI, the HTCG tries to en­able changes in pol­icy and reg­u­la­tions that can fa­cil­i­tate high tech­nol­ogy trade and strengthen con­trols on pos­si­ble di­ver­sion of sen­si­tive items.

The new man­date be­fore the HTCG is to con­vert the buyer-seller re­la­tion­ship to co-de­vel­oper and co-pro­ducer of weapon sys­tems, but no deal has yet been firmed up be­tween the two coun­tries as pol­icy hur­dles still re­main a big is­sue for In­dian part­ner. In fact it was a big set­back for the HTCG when the US and In­dian de­fence en­ti­ties could not take a favourable decision for the joint pro­duc­tion of Jave­line anti-tank mis­siles and the In­dian Min­istry of De­fence de­cided to ac­quire the Is­raeli Spike mis­siles.

The rem­nants of US pro­moted ex­port con­trol regimes per­haps are still a big bar­rier in pro­mot­ing not only di­rect de­fence sales but co-de­vel­op­ment and co-pro­duc­tion of sys­tems. Sens­ing, $100 bil­lion de­fence mar­ket in next decade the US side has re­laxed its en­duser mon­i­tor­ing re­quire­ment on the de­fence sales to In­dia and also is not in­sist­ing on strictly ad­her­ing to US laws like the CISMOA and BECA agree­ments, this has not been to­tally waived and the In­dian side re­mains wary of any fu­ture con­di­tion­al­i­ties. If the US side wants to have free sale of US-made weapon sys­tems to In­dia it will re­quire a Pres­i­den­tial waiver and HTCG must work with this man­date.

Since the In­dian De­fence Min­istry is now pro­mot­ing ‘Make in In­dia’ pol­icy, the US com­pa­nies would be well ad­vised to take ad­van­tage of this and set up lo­cal pro­duc­tion fa­cil­i­ties in col­lab­o­ra­tion with In­dian part­ners and also en­cour­age joint sys­tems de­vel­op­ment pro­gramme tak­ing ad­van­tage of huge skills avail­able in In­dia as the US soft­ware gi­ants have taken ad­van­tage of the In­dian in­for­ma­tion tech­nol­ogy spe­cial­ists. The HTCG will have to pro­mote th­ese pro­pos­als.

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