US eases controls on sale of high-tech, defence items to India

US Commerce Secretary Wilbur Ross on July 30, 2018, announced that the US had included India in Tier 1 of the Department of Commerce's Strategic Trade Authorisation list.
US Commerce Secretary Wilbur Ross on July 30, 2018, announced that the US had included India in Tier 1 of the Department of Commerce's Strategic Trade Authorisation list.PHOTO: AFP

The United States has eased controls on the sale of high-technology products, including defence items, to India, bringing the South Asian country on a par with a Nato ally in defence cooperation, in a move welcomed here.

Analysts said the decision had both strategic and economic implications, with the US looking to tap India's defence market and strengthen links with the South Asian country in the backdrop of a growing rift with China.

US Commerce Secretary Wilbur Ross on Monday announced that the US had included India in Tier 1 of the Department of Commerce's Strategic Trade Authorisation (STA) list.

Tier I includes Nato allies such as Britain and Asian countries like Japan and South Korea. It makes it easier for India to acquire US high-tech and military items that are usually under strict controls, without the need for individual export licences.

"US companies will be able to more efficiently export a much wider range of products to Indian high-tech and military customers. India's new status will benefit US manufacturers while continuing to protect our national security," Mr Ross said at the Indo-Pacific Business Forum on Monday, according to the US Department of Commerce.

The US decision comes ahead of crucial talks, dubbed 2 plus 2, between India's External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman, and US Secretary of State Mike Pompeo and Defence Secretary Jim Mattis on Sept 6. The talks had been postponed twice.

Defence cooperation between India and the US has been deepening over the past few years as Washington sharpens its focus on the Indo-Pacific region, on the back of China's growing military might. The US recently renamed its Hawaii-based Pacific Command as the US Indo-Pacific Command in a nod to the importance of the Indian Ocean and India's growing importance in Asia.

In 2016, the US designated India a major defence partner and the two countries also agreed in principle to go ahead with an agreement to share each other's military bases for refuelling or repair of fighter jets and naval warships.

India yesterday welcomed the move by the US. "This step will further facilitate India-US trade and technology collaboration in defence and high-technology areas. We look forward to the US side operationalising the decision at an early date," the Ministry of External Affairs said in a statement.

Analysts said the move to put India on a par with Nato allies was both economic and strategic.

"There is growing consensus within the US administration that China is the biggest threat to the US. In this background, it seems clear that the US wants India very much on its side as a strategic counterweight to China," said former foreign secretary Lalit Mansingh.

"India will be treated on a par with US Nato allies, which means India will have access to the most sensitive and state-of-the-art military technology that America has to offer. Quite clearly, the fact also remains that India is emerging as a major market for American hardware."

India is the world's largest arms buyer and has diversified its purchases beyond its traditional supplier, Russia, in recent years.

Last month, the US approved the sale of 22 Guardian drones to India, and in June, the State Department reportedly approved the sale of six Apache attack helicopters to India.

Still, some analysts sounded a word of caution, saying it remained to be seen how easy it would be for India to source high-tech and sensitive material from the US.

"We need to see how this latest announcement dovetails with the latest security clearances. I think we need to watch the next few months to see how it translates," said Air Vice-Marshal (Ret) Manmohan Bahadur, additional director-general of the Centre for Air Power Studies.

"It is just an indication of possibly greater cooperation in the way the US sees India in the region. The strategic interest of US is to contain China and to keep India within its sphere of influence."

A version of this article appeared in the print edition of The Straits Times on August 01, 2018, with the headline 'US eases controls on sale of high-tech, defence items to India'. Print Edition | Subscribe