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.