Indian engineering and construction groups, such as L&T, Tata, Godrej and Mahindra, may soon find it easy to enter the advanced defence equipment market.
US president Barack Obama’s visit is likely to lead to relaxation of the controls imposed on export of sensitive technologies after India’s second nuclear test in 1998.
“We do expect progress during this visit and hope to see some outcome by way of liberalisation of the export control regulatory regime in the US, as it applies to New Delhi,” Meera Shankar, India’s ambassador to the US, said on Wednesday.
The tight controls imposed by the Clinton administration have crippled the private sector Indian defence industry. US companies, which supply most of the military hardware in the world and own most technologies, are prohibited from issuing licences to India or having joint ventures with Indian firms.
This has constrained the growth of defence units of companies such as L&T.
Indian private firms currently manufacture only basic military hardware, except in cases they have been able to tie up with European vendors for technology, as L&T has done.
Shankar’s comments have come a week after US officials said they have had “quite intensive discussions” with the Indians on relaxing technology transfer restrictions.
“We are also making progress on cooperation in space and updating export controls to reflect the reality of a 21st century partnership in which India is treated as a partner, not target,” William Burns, US under secretary of state for political affairs, said in a pre-Obama visit briefing in Washington last week.
He also pointed to the possibility of US firms tying up with Indian companies to enter the nascent nuclear energy sector in India.
“I think we are making progress [in talks with India]. What we’re interested in is simply to ensure that there’s a level playing field for our companies,” Burns said.
