India wants high-tech trade to anchor US ties

External affairs minister SM Krishna projected high-tech commerce on Wednesday as a sheet anchor for India’s ties with the US as the strategic dialogue got underway in Washington six months ahead of president Barack Obama’s anticipated visit to New Delhi.

India faces an existential dilemma: it needs to determine how far it is prepared to go with Uncle Sam down the path into the garden where it has never been before. India has been a reliable customer for Russian weapons which lies at the heart of its relationship with Moscow.

Russia accounts for about 70% of Indian military equipment, but India is now showing a shift towards US weaponry.

This is also leading to friction between New Delhi and Washington. The two sides are trying to overcome agitation over
India’s reluctance to sign at least two safeguard agreements. US officials have made it clear the enterprise could be rewarding.

Krishna used his visit to frame India’s ambition to acquire cutting-edge US technology. Indian nuclear interlocutors have stressed time and again that the broader objective of the nuclear deal was to dismantle US technology restrictions slapped on India after it tested nuclear weapons in 1998.

A broad category of US-controlled technologies are more easily available to Indian importers but there are restrictions on “dual-use technology” or hi-tech products that can have
military applications. “We have given written assurances that US technology will enjoy the level of security stipulated by relevant US laws and not be diverted in contravention of US regulations,” Krishna told the 35th anniversary meeting of the US-India Business Council.

“Indian importers have a 100% compliance record when it comes to safeguarding imported technology — we have been implementing the End-Use Verification Agreement with US partners for years. With this trust that we have built as strategic partners, we should be able to create robust two-way trade in advanced technology,” added Krishna, who leads the first India-US strategic dialogue at the ministerial level on Thursday with Secretary of State Hillary Clinton.

The US has attached strings to the transfer of “dual-use” technology to India. It has linked it to Delhi signing the Logistics Support Agreement and the Communications, Interoperability and Security Memorandum Agreement, which are pending. According to sources, prime minister Manmohan Singh has said he needs to be convinced the agreements bring India substantial advantage.

America’s AH-64 Apache attack helicopter, the C-17 Globemaster
aircraft and the M777 howitzer will soon come to India for user trials. But if India doesn’t sign the two agreements, it could end up paying full price for US equipment stripped of cutting-edge electronics.

US-India trade spiked from $13.5 billion in 2001 to $37.6 billion in 2009 and hi-tech goods totalled 13% of the bilateral pie last year.

New Delhi has urged the US to relax export controls. State-run Indian firms still find themselves on America’s “Entity List”, which means they need specific licenses for the export and transfer of items. India says it defies logic that the Indian Space Research Organisation, which collaborates heavily with Nasa, is on the list. Bharat Dynamics and Department of Atomic Energy entities such as the Bhabha Atomic Research Centre, Indira Gandhi Atomic Research Centre, Indian Rare Earths and most Indian nuclear reactors are on the Entity List.

Indian officials told DNA that after the Times Square bomb plot, Washington had at long last accepted the Indian interpretation that al-Qaeda and Taliban forces and Pakistan-based terrorist organisations operating against India are birds of the same feather.

To be sure, China is back with a bang in the US strategic calculus as it gets upended by Beijing on key issues. The Obama administration is reverting to the Bush-era doctrine regarding the potentials of an unbound India as a counterweight to China. The five baskets of issues that India and the US will discuss range from strategic cooperation to science and technology.