US gives India more access to high-end dual use tech

US gives India more access to high-end dual use tech

NSSP Of 185 applications between Oct ’04 and Jan ’05, 176 cleared

NEW DELHI, MARCH 13 A year after India and US sought to break fresh ground in their bilateral relationship under the framework of the Next Steps in Strategic Partnership (NSSP), a stocktaking of milestones crossed indicates a near turnaround in trade of dual use items.

The NSSP, progress of which will be up for review this week when US Secretary of State Condoleezza Rice is here for a day, has in a step-by-step manner eased the restrictions imposed on India following the 1998 nuclear tests.

There has been a significant jump in the US approval rate on licenses sought by Indian entities to trade in dual use items which involve sensitive technology that can be used for military purposes.

By the time the first phase of the NSSP was completed in September last year, the trade of dual use items was worth $90 million between both countries. This was a significant increase from $57 million at the end of 2003 financial year.

But more importantly, Indian entities are now getting faster approvals on importing high-end dual use technology items. In the financial year 2004, Indian entities got as many as 912 approvals for a little over 1,000 applications that were submitted. This was an increase of nearly 300 from the previous year.

The signing of NSSP-I means that a huge chunk of dual use trade, largely associated with low-end technology items, no longer require licenses. According to reliable sources, nearly 30 per cent of items for Indian entities which earlier needed license have been deregulated since October 1 last year.

In the high-end technology segment, for which the US has strict licensing requirements for almost every country, the progress has been very encouraging from an Indian standpoint. Of the 185 applications submitted between October last year and January, 176 were cleared. Department of Space was the main beneficiary with 32 approvals.

All this has had a very positive impact on overall Indian imports from the US which grew by $1 billion in 2004 financial year, laying a strong foundation for intensifying trade in dual use items between both countries. India, on its part, is also planning to introduce stricter export regulations for dual use items that will go a long way in building mutual trust.

The Rice visit comes at a time when both sides are looking to align their trade mechanisms to achieve goals laid out by the NSSP. In this context, a high-level team was in Washington and Baltimore earlier this month to firm up New Delhi’s participation in the US-led Container Security Initiative (CSI).

It’s learnt that Nhava Sheva near Mumbai is among top 10 ports from where US receives maximum containers. With New Delhi keen on joining the programme, sources said, Washington is now moving quickly to finalise an agreement. Once operational, there will be greater transparency in trade as both countries will be able to station their Customs officials at identified ports in each other’s country.

A team from Pentagon was here recently to brief the ministries of Defence and External Affairs on the Patriot PAC-2 missile system which was followed by meetings in Hyderabad where both sides agreed on holding joint workshops on missile defence.