A New Passage to India

Nov. 26, 2007
Vice President-Government Relations, AMT—The Association For Manufacturing Technology Over the past two years both the U.S. government and the government of India have dramatically changed their policies with regard to both nuclear and ...

Vice President-Government Relations, AMT—The Association For Manufacturing Technology

Over the past two years both the U.S. government and the government of India have dramatically changed their policies with regard to both nuclear and dual-use technology transfer. These changed policies promise significant new opportunities for export sales to Indian companies. From the moment of the 9/11 attacks, the Bush Administration realized that it needed to forge new relationships with South Asia. Thus, improved relations with India have been at the top of the agenda. The theme of the new policy has been to make India a “strategic partner,” and improved trade seems to be a key component of the concept of the “strategic partnership.” This replaces the wary, arms-length relationship that had characterized relations since the founding of the modern Indian state.

A bi-national working group, the U.S.-India High Technology Cooperation Group, has had several meetings this year, with the aim of laying out a plan for significantly improving high technology trade. In itself this is strong evidence of a U.S. commitment to improved high technology trade and more liberal export controls. Why else would the Administration establish a working group? They certainly don’t want to set the Indians up for disappointment and disillusionment.

Last year the Administration decided to make a special arrangement with the Indian government that would allow India to receive peaceful nuclear technology for the first time in almost 30 years. The key to this arrangement is a commitment by the Administration that henceforth India would be treated as though it had signed the Nuclear Non-Proliferation Treaty even though it had not. Indeed, under the new arrangement India would be allowed to segregate its nuclear weapons facilities from its civilian facilities, and those civilian nuclear facilities would be able to acquire nuclear fuel and dualuse technology from the United States in the same manner as those nations that were signatories in full compliance with the Nuclear Non-Proliferation Treaty.

Unfortunately, the Indians have been slow to make the necessary changes in their laws, and in recent months the opposition party in the Parliament has made the loss of Indian sovereignty growing out of this new arrangement an issue with which to attack the Prime Minister and his party.

Even after the Indian government changes their laws, the question will remain as to whether the Indians want to join the proliferation regimes. The non-proliferation regimes include the Australia Group on Chemical Weapons, the Missile Technology Control Regime , and the Nuclear Suppliers Group .

Most importantly, from the perspective of U.S. capital goods manufacturers, membership in these regimes would confer better licensing treatment, such as speeded up handling of individual licenses.

Although initially it might not create special privileges or the elimination of the need for licenses, it would be a signal to U.S. licensing authorities that India is no longer a pariah and should be accorded favorable licensing treatment. License applications that were until recently not likely to be approved would become high probabilities for approval.

With regard to technology transfer and improved licensing to India, there is a sense of anticipation on the Indian side that there will be a steady improvement. Even without formal Indian acceptance of the rules of the various non-proliferation regimes and implementation of rules that match the restrictions found in the Nuclear Suppliers Group and the Missile Technology Control Regime, there is likely to be improved license treatment of Indian end-users.

Already, the Commerce Department has announced that it is scrubbing its list of proscribed entities to remove Indian listings left over from the Cold War and the “bad old days” of suspicion between our two countries. Many Indian research facilities once out of bounds for U.S. technology will now qualify for licenses. In general, the overall licensing atmosphere and approval rate should improve in a measurable way.

In an era of continuing bad news about foreign and trade policy, the new relationship with India is a bright spot, and U.S. manufacturers ought to benefit handsomely.

You can help revitalize U.S. manufacturing! Send this page to your Congressman, local and state government leaders, or your local newspaper editor. Add your own comments on the importance of manufacturing innovation to the health of our economy. Your comments are also welcome at [email protected]