Political India: Engaging America

From The Hindu

Indian Foreign Secretary Nirupama Rao has concluded her visit to Washington, during which she impressed upon U.S. officials the importance of India’s continued commitment to its developmental work in Afghanistan. Her trip also saw a sharp focus on high-tech trade and the Strategic Dialogue that was initiated last July when Secretary Clinton visited India.

In a brief to U.S. interlocutors earlier this week Ms. Rao drew attention to several key regional issues according to Rahul Chhabra of the Indian Embassy, including her talks with the Foreign Secretary of Pakistan in February. She also touched upon the recent developments in Afghanistan and stressed “that Afghanistan presented the foremost security related challenge in the region,” Mr. Chhabra said. In that context, Ms. Rao emphasised the need “for the international community to stay the present course in Afghanistan for as long as it is necessary.” U.S. officials reportedly conveyed their appreciation of the important developmental work being done by India in Afghanistan.

Further Ms. Rao also co-chaired the 7th meeting of the India-United States High Technology Cooperation Group. Addressing the officials from the U.S. Department of Commerce, she used the platform to push for a favourable review of U.S. export controls applicable to India, to bring them in line with “the changed political realities that contextualise India-U.S. strategic partnership today.”

Two days of deliberations — between the industry representatives of both countries followed by the government-to-government meetings to consider the recommendations of the industry — led to a consolidation of the progress made in the last five years and identified the next steps for further expanding high technology trade. The dialogue particularly focused on the areas of defence and strategic trade, biotechnology, and nanotechnology, with agreement on the need to create new groups on health, IT and civil aviation.

India-U.S. Strategic Dialogue

Ms. Rao also met with a number of senior administration officials to further the India-U.S. Strategic Dialogue, including Secretary of State Hillary Clinton, Under Secretary of State for Political Affairs, William Burns, National Security Advisor, James Jones, Under Secretary of State for Economic Affairs, Robert Hormats, and Under Secretary of State for Democracy Global Affairs, Maria Otero. Further, she interacted with Congressman Gary Ackerman — who headed up the recent Congressional hearing on Lashkar-e-Taiba — and Senator Joseph Lieberman.

Mr. Chhabra said at these bilateral meetings, the Foreign Secretary had the opportunity to review the progress “on various pillars of India-U.S. Strategic Dialogue agenda including cooperation in defence, nuclear energy, counter-terrorism, agriculture, education, energy, space and cyber-security.”

From The Hindu

Nirupama Rao, Indian Foreign Secretary, on Tuesday described the United States Bureau of Industry and Security’s (BIS) Entities list “anachronistic” saying, “It is anomalous that a body like the Indian Space Research Organisation, which is developing several collaborations with National and Aeronautical and Space Administration, should continue to be on the list.”

Co-chairing the 7th meeting of the India-U.S. High Technology Cooperation Group (HTCG) along with Daniel Hill, Acting Under Secretary for Industry and Security, Ms. Rao exhorted attending delegates from the U.S. Department of Commerce to reconsider control restrictions for U.S. exports to India. She also addressed the Entities List issue at another speaking engagement at the Woodrow Wilson Center later in the day.

The BIS’s Export Administration Regulations contain a list of names of foreign businesses, research institutions, government and private organizations and individuals that are subject to specific license requirements for the export, re-export and transfer of specified items.

At present the list includes ISRO, Bharat Dynamic Limited and Department of Atomic Energy entities such as the Bhabha Atomic Research Centre, Indira Gandhi Atomic Research Centre, Indian Rare Earths and most nuclear reactors (including power plants) not under IAEA safeguards.

Arguing that the earlier trend of restrictions being reduced had been halted, Ms. Rao said that among the early results of the HTCG were the removal of a number of Indian organisations from the Entity List by 2005, de-licensing of certain categories of dual-use items and institution of a presumption of approval policy in other categories. “This process of easing of controls seems to have slowed down; we need to address this issue,” she emphasised.

Indian record “exemplary”

There would appear to be significant support for this view from the private sector, notably Indian industrial lobbies with a presence in the U.S.. For example Ms. Ranjana Khanna of the Federation of Indian Chambers of Commerce and Industry (FICCI) said, “We appreciate that further liberalisation of export controls needs to be accompanied by the responsible use of high technology items and preventing its diversion to unintended uses… India’s record has been exemplary in this area.”

Yet Ms. Rao did admit she was reassured by the U.S. government’s announcement of its intention to overhaul their Export Control policy and hoped to see the enhancement of trade in such goods and technologies between our two countries and removal of remaining Indian organisations from the Entity List. “We hope that your response and the outcome of your review would be such that it would reflect - and reaffirm the strategic nature of our partnership,” she said.

She may have some cause for relief – overall, total exports of advanced technology products exported from the U.S. to India have increased from $1.3 billion in 2003 to over US $4 billion in 2009, despite the backdrop of the global economic slowdown.

Progress would also appear imminent with the civil nuclear agreement between India and the U.S.. Regarding the deal Ms. Rao said, “Once the 123 Agreement is implemented, a structured bilateral interaction with the Industry on both sides could take forward the process.” Even in the interim period there has been a steady and direct interaction between U.S. nuclear industry and NPCIL, with two MOUs already signed with GE Hitachi and Westinghouse, she said.

View from the U.S.

Responding to some of the concerns regarding export controls voiced by the Indian side Deputy Secretary of State Dennis Hightower said (via a representative) that while it was critical that the U.S. increased trade, it would simultaneously maintain its strong commitment to national security.

While he pointed out that in 2009 the U.S. exported $16 billion of goods and services to India and only three percent of these exports required a license from the Department of Commerce, he however acknowledged that “As trade in high technology grows our export control system will have to change to keep pace.”

Deputy Assistant to the President Michael Froman also commented on the Indian questions about excessive controls highlighting the fact that ten years ago 24 percent of U.S. exports to India required individual licenses from the Department of Commerce while today only 0.3 percent of U.S. exports to India require individual licenses.

Further, he added, the licensing process and time for India now is down to 28 days, a decrease from 31 days in 2008 and less than the worldwide average of 35 days. Mr. Froman also said in 2009 BIS reviewed 985 export and re-export licenses for India, valued at approximately $334m, for which the denial rate was about 2.1 percent.

Arguing that “Many of the U.S. high-technology items are eligible for export to India under licenses that are not available to many other countries, including China,” he said that they had to however be mindful of the diverse threats from state actors, transnational groups and even individual actors.

Suggesting that the U.S. was seeking a balance between expanding trade and not compromising on national security Mr. Froman said, “To address these challenges the U.S. is conducting a fundamental review of its export controls system.” The U.S. needed a dynamic export control system that “focuses on a core set of technologies that are critical to our national security while further unleashing the innovative power of U.S. industry to compete for sales in less sensitive items around the globe,” he said.

Creating jobs through trade

Ms. Rao bolstered the case for U.S. trade with India by stressing, in her presentation, the possibility of creating more jobs in the U.S. by deepening high-tech trade between the two countries. She cited several examples of job-creating trade agreements including the signing of the End Use Monitoring Arrangement and Technology Safeguards Agreement for Space application last year. Additionally regarding Air India’s order for 68 Boeing aircraft, she said, “I am given to understand that each US aircraft means 10,000 jobs across 50 states of the country.”

Ms. Rao also mentioned that there was potential for growth in the defence industry, as India diversified its sources for defence systems for its military as well as counter terrorism requirements – even through the route of permitting private sector participation in defence production.

She further sought to dispel concerns “lingering” over India’s intellectual property protection regime, saying “The Indian IP regime is completely TRIPS-compliant… A major programme of modernization of the infrastructure of Intellectual Property Offices of India costing about 40 million dollars was implemented during the 10th Five Year Plan.”