STRATEGIC STEPS IN INDO-US RELATIONSHIP

Recent Developments in Indo-US Relations

Nov 2001 : President Bush and Indian PM AB Vajpayee meet in Washington, DC, and agree to take steps to qualitatively transform Indo-US relations.

Nov 2002 : India-US High Technology Co-operation Group (HTCG) established.

Feb 2003 : US Under Secy of Commerce and Indian Foreign Secy sign the Statement of Principles on US-India High Technology Cooperation.

Jul/Nov 2003 : HTCG convenes in Washington, DC, to discuss issues relevant to creating conditions for more robust bilateral high-technology commerce.

Jan 2004 : The US and India agree to expand cooperation in civilian nuclear activities, civilian space programmes, and high-technology trade.

Sep 2004 : The US and India conclude Phase 1 of the ‘Next Steps in Strategic Partnership ( NSSP).

Sep 2004 - Jun 2005 :  Visit by various officials to India, Pakistan and the sub-continent to assess the situation first-hand.

29 Jun 2005 : A 10 Year defence alliance between US and India inked. The 'New Framework for the US-India Relationship' was signed by the US Defence Secretary Donal Rumsfeld and the Indian Defence Minister Pranab Mukherjee.

US-India NSSP

In Sep 2004, the US published a regulation implementing the Phase 1 export licensing commitments. The regulatory changes include:

1. Removing the Indian Space Research Organisation (ISRO) Headquarters from the Entity List.

2. Removing licensing requirement for low-level dual-use items exported to ISRO’s subordinate entities listed on the Entity List.

3. Expanding the ‘presumption of approval’ policy for all dual-use items not controlled by Nuclear Suppliers Group (NSG), if intended for export to the ‘balance of plant’ portion of an Indian nuclear facility subject to international safeguards.

Analysis  

• Most trade with India does not require a license. Approximately 1% of all US trade with India requires an export license.
• The US approves a vast majority of exports that require license. In fiscal 2004, the US approved approx 90% of the applications that required an export license. 
• License application processing is timely and efficient; say in 40-45 days. 
• Fewer licensing applications are denied for India each year. In FY 2003, only 10% were denied –down from 15% in FY 2002.
• Many applications submitted for approval do not require a license. This is a result of 'disinformation'. 

Summary 

• Export licensing requirements apply to a very small percentage of US-India trade. 
• Many items subject to export controls can be exported to India without a license, or under a license exception.
• Exports of controlled items to India are approved provided these do not contribute to or pose risk of diversion to Indian nuclear or missile programmes.
• Applications for controlled items are reviewed on a case-by-case basis. There is no longer any policy of denial.

The US and India are committed to working towards enhancing a qualitatively transformed relationship and continuing efforts to stimulate bilateral high-technology defence & commerce.

A 10 Year defence alliance docu signed on 29 Jun 2005 consolidates the move.