India-US high-tech cooperation has been an important component of the evolving India-US strategic relationship over the last decade. Under the Atal Bihari Vajpayee Government, India and the US had established the High Technology Cooperation Group (HTCG) in November 2002 to promote and facilitate strategic trade by addressing the export control laws. Under his Government, bilateral high-tech trade registered a phenomenal growth with the removal of economic and military sanctions by the Bush Administration in the immediate aftermath of the 9/11 terrorist attacks and subsequently with the signing of Statement of Principles (SOP) in 2003 for enhancing strategic trade and the Next Steps in Strategic Partnership (NSSP) in 2004 for expanding cooperation in the areas of civil nuclear, civil space, dual-use technology, in addition to expanding their dialogue on missile defence. During the Manmohan Singh Government, high-tech cooperation was expected to substantially improve, especially after the signing of the historic July 18, 2005 nuclear deal, which recognised India as a “responsible state with advanced nuclear technology” and the Obama Administration’s removal of nine Indian defence and space research organisations from the US Entity list (El) in January 2011. But progress in the high-tech cooperation slowed down because of the lack of attention that it received following President Barack Obama’s much highlighted 2010 visit to India and the domestic preoccupation of the two Governments. However, Narendra Modi’s coming to power in May 2014 and his two successful summit meetings with President Obama have renewed the strategic relationship and revived the high-tech cooperation between the two countries by building mutual trust and confidence between the two nations. Time is ripe for advancing high-tech cooperation between the two countries after the successful three-day visit of US Secretary of Defence Ashton Carter to India in June 2015.
Cooperation under the Vajpayee Government
President Bill Clinton’s March 2000 visit to India marked a major turning point in India-US relationship. It was the first presidential visit to India after a gap of more than 20 years. During his visit, Prime Minister Vajpayee and President Clinton signed a vision statement for the 21st century where the two leaders resolved “to create a closer and qualitatively new relationship”. In the statement, they had “shown strong commitments to export controls”, and agreed to “work together to prevent the spread of dangerous technologies”. They pledged “to reduce impediments to bilateral trade and investment and to expand commerce”, especially in the “high-technology areas”. In this regard, they set up the India-US Science and Technology Forum (IUSSTF) to promote research and development and “the transfer of technology”. In September 2000, Prime Minister Vajpayee paid a reciprocal visit to the US which took India-US high-tech cooperation a step forward. In the September 2000 joint statement, the two leaders emphasised “the need to deepen cooperation on high-tech trade issues” for developing India-US relationship. The substantive initiatives and understandings on a broad range of issues that the two sides reached during their two meetings in the same year laid the foundation for enhanced high-tech cooperation between the two countries.
It may be recalled that the Vajpayee Government’s bold decision to conduct nuclear tests in May 1998 and self-declaration of India as a nuclear weapon state led the US Government to impose economic and military sanctions on India. Nearly 200 Indian entities, including defence and space research organisations, were put on the US export control El by the Department of Commerce where high-tech trade were strictly restricted. Soon after the tests however, the two Governments found it highly necessary to engage each other on the nuclear and security issues. As a result, India’s then External Affairs Minister Jaswant Singh and then US Deputy Secretary of State Strobe Talbott held more than a dozen of “strategic dialogue” in different countries spanning over two years. The dialogue helped improve “mutual understanding on bilateral, regional and international security matters” and it restored much-needed mutual trust and confidence between the two nations. This newly-built mutual trust not only led the Clinton Administration to play a positive role during the India-Pakistan Kargil War of 1999, but also created conducive political atmosphere in New Delhi and Washington which paved the way for President Clinton’s visit to India in March 2000. This remarkable turnaround in the relationship was possible because of the deft diplomacy that the Vajpayee Government had shown under his leadership.
Despite Vajpayee Government’s vigorous efforts, however, the relationship could not become a transformational because of the following five main reasons: First, the year 2000 was the last year of President Clinton’s term and when Vajpayee visited the US in September 2000, American presidential election campaign had already begun and was in full swing; second, notwithstanding the improvement in bilateral relationship, the Clinton Administration continued to emphasise the nuclear non-proliferation issues where India had major disagreements; third, the United States’ post-1998 nuclear sanctions on India continued; fourth, though India looked for high-tech goods and technologies from the US for its civilian and developmental purposes, the Clinton Administration continued to have suspicion on the diversion of such technologies to the non-civilian nuclear programmes; and, finally, in addition to the US linking of technology transfer into its nuclear non-proliferation concerns, India’s non-adherence to international export control regimes such as the Wassenaar Arrangement (WA), Australia Group (AG), Missile Technology Control Regime (MTCR), and Nuclear Suppliers Group (NSG) further placed restrictions on transfer of such technologies to India.
With the coming of Bush Administration to power, India-US high-tech cooperation really began to transform. Unlike the previous Administration, the Bush Administration did not pursue the nuclear non-proliferation policies vis-à-vis India. It also felt the negative effect of sanctions on American tech companies and the loss of trade with an emerging economy. Consequently, the Bush Administration looked to further improve the United States relationship with India from where the Clinton Administration left and soon recognised India as a close strategic partner. It was, however, the Vajpayee Government’s persistent emphasis on the removal of the remaining economic and military sanctions on India that pushed the Bush Administration to pass an executive order no. 2001-28 following the 9/11 terrorist incident, which removed most of the remaining sanctions. The Administration also cut down the number of Indian entities on the El from nearly 200 to 16.
In 2001, when Prime Minister Vajpayee and President George W Bush met for the first time and thought of qualitatively transforming India-US relationship, high technology came up as a major area of cooperation. This led both sides to formalise high technology cooperation by signing various bilateral agreements such as India-US Joint Statement on High Technology Commerce in November 2002 for facilitating and promoting high-tech trade; Statement of Principles for India-US High Technology Commerce in February 2003 for increasing the role of the private sectors and eliminating barriers to trade; the NSSP in January 2004 for expanding cooperation in civilian nuclear activities, civilian space programmes, high technology trade and also to expand their dialogue on missile defence. This institutionalisation provided a broad-based framework for developing India-US high-tech cooperation. Indeed, these policy measures helped mend the relationship and high-tech trade began to improve significantly. For instance, in the year 2000, 24 per cent of US high-tech exports to India required licence from the Department of Commerce. In 2005, less than 1 per cent of US export to India required a licence. Thus, by the time Prime Minister Vajpayee left office, India-US high-tech cooperation reached to a new high point.
Status under the Manmohan Singh Government
The close India-US strategic relationship that the Vajpayee Government developed during its tenure continued into the Manmohan Singh Government. As a result, in June 2005, India and the US signed the New Framework for Defence Cooperation agreement in which the two sides agreed to explore the prospects for “co-production and technology collaboration”. In July 2005, Prime Minister Manmohan Singh and President Bush signed the path-breaking nuclear deal for developing civil nuclear cooperation. After a prolonged negotiation the nuclear deal was finally completed in October 2008 which raised high expectations for improved high-tech trade, including in the civil nuclear sector. However, till the end of Manmohan Singh Government in 2014, the deal was not operationalised.
While the operationalisation of the nuclear deal was held back over nuclear liability issue, India-US high-tech cooperation were mainly constrained by the United States Cold War era export control system and the international export control regimes. While the US Department of Commerce had cut down the number of Indian entities on the El from approximately 200 to 16, the key defence and space organisations still remained in the list. As a result, in August 2009, President Obama announced for a comprehensive review of its export control system to make its export control system more relevance for the 21st century realities and to develop strategic trade relationship with its allies and partners on “less sensitive” items. Since then the Administration has been making efforts to simplify its export control laws. The Obama Administration officials have often expressed that these streamlining and simplification of export control system will help develop technology cooperation with its partners like India. As then US Secretary of Defence leon Panetta had said, “We are working to make US Government decision-making simpler, faster and more predictable for partners… India is one such country that would benefit from changes to our system”. But the Administration has not clarified how exactly those reforms will help improve high-tech cooperation with India.
During his first visit to India in November 2010, President Obama supported India’s permanent membership in the UN Security Council and the four international export control regimes i.e., the WA, AG, MTCR, and NSG. India’s membership in these international regimes was very important and yet the two sides had not made any substantial progress in this field. The US must play leading role in reforming these institutions both to make them relevance for addressing the 21st century security challenges and also to bring India into these global decision-making bodies. President Obama had also promised India during his address in Mumbai and at Indian Parliament in November 2010 to work on fundamentally reforming its export regime to allow greater cooperation on a range of high technology sectors. Delivering on its promise, the US Department of Commerce’s Bureau of Industry and Security (BIS) removed nine Indian defence and space-related organisations from the El in January 2011. Both India and the US believed that the removal of these entities from the El will allow for greater high-tech trade and cooperation in civilian space and defence sectors, and enable their Governments to focus on other outstanding barriers that hinder the expansion of bilateral high-tech trade. Nevertheless, progress in this sector has been very slow.
Development in India-US high-tech cooperation further stalled over the two Governments preoccupation with their domestic economic and political issues. In addition, the Obama Administration deeply involved in the greater West Asia crisis after the rise of Arab Spring in 2011 and the ISIS terrorist group subsequently. The Administration is yet to tackle this region to implement its Asia rebalancing strategy where it looks to strengthen its defence and strategic partnership with India. Moreover, India-US relationship reached into a lowest point in December 2013 after India’s diplomat Devyani Khobragade’s arrest, strip search and indictment by the US authorities on charges of visa fraud and the violation of domestic labour law. Following the diplomatic row, India-US relationship began to “drift” apart and often referred to it has reached a ‘plateau’.
Movement under the Modi Government
Prime Minister Modi’s coming to power in May 2014 with a historic mandate and his successful visit to the US in September 2014 marked a dramatic improvement in the bilateral defence and high-tech cooperation. As a result, in October 2014, Frank Kendall, Under Secretary of Defence for Acquisition, Technology and logistics in an address at the US India Business Council (USIBC), announced Pentagon’s approval of two previously-stalled technology transfer licences to India. In an unprecedented move, Kendall also set aside $20 million for strategic cooperative science and technology projects with India. In November 2014, the two sides held the first meeting of a revived HTCG after a gap of more than three years to strengthen the strategic partnership and boost high technology trade. They also held the first-ever India-US Technology Summit in November 2014 where policy makers, industry representatives, researchers and academics deliberated upon the role of science and technology cooperation in addressing the 21st century challenges.
The Modi Government has also given economic and domestic manufacturing priority to the high-tech trade through ‘Make in India’ initiative. Prime Minister Modi recognises that the US support to India in the field of innovation, technology transfer and establishing indigenous defence technology industries is critical to sustaining and advancing India’s developmental goals. At the same time, a strong defence and technology cooperation between the two countries is important to counter the emerging security challenges that they confront together in the 21st century such as terrorism, climate change and also China’s growing military assertiveness in Asia.
President Obama’s three-day visit to India in January 2015, first American President to visit India while in office, as chief guest to participate in India’s Republic Day celebration further consolidated the relationship. The visit was not only rich in symbolism and personal chemistry between the two leaders, but it was also a very successful summit meeting on many areas such as the two sides for the first time reached a big breakthrough understating on implementation of the nuclear deal, agreed in principle to pursue co-development and co-production of high end defence equipment and renewed the new framework for defence cooperation agreement for another 10 years.
In the January 2015 joint statement, Prime Minister Modi and President Obama also welcomed efforts to seek timely resolution of the challenges to trade in high-tech goods, including the US licensing requirements. In this regard, President Obama assured India that his administration will continue to make efforts in reforming US export control system for advancing “more high-tech collaborations with India.” Besides, he reiterated the United States’ support to India’s permanent membership in the UNSC and the two leaders committed to “work towards India’s phased entry into” the four international export control regimes. India and the US also signed three MoUs for developing Ajmer (Rajasthan), Allahabad (Uttar Pradesh) and Visakhapatnam (Andhra Pradesh) as ‘Smart Cities’ with the participation of American industries. The US technology transfer and investment will be crucial for the early realisation of these projects.
Ash Carter, who started India-US Defence Trade and Technology Initiative (DTTI) and made efforts to address technology transfer restriction issues, made his first visit to India as Secretary of Defence from June 2-4, 2015. As Pentagon’s point person, he had envisaged for a better technology transfer, co-production and co-development of high end defence equipment. Carter has been seen as a friendly to India. On June 3, Defence Secretary Carter formally signed the 10-year New Framework for Defence Cooperation agreement with his Indian counterpart Manohar Parrikar. The agreement will guide India-US defence and strategic partnership for the next 10 years. They also ‘finalised’ the joint development of “Mobile Electric Hybrid Power Sources” and the “Next Generation Protective Ensembles” under the DTTI. Ahead of his visit, the US House of Representatives has also passed the amendment to the National Defence Authorisation Act (NDAA) 2016, which urges the US Government for expanding India-US defence and technological cooperation.
The Modi Government has, thus, given a new thrust to the bilateral relationship and begun a new chapter in high-tech cooperation. The stage is now set for building a strong strategic partnership in the 21st century. A robust high-tech trade is indeed critical for enhancing India-US strategic relationship. However, there is need of vigorous and substantial efforts from both the sides for realising this goal. Above all, the new found mutual trust and confidence in the relationship is very important for advancing trade in such sensitive items. The two sides must now build upon this new momentum in the relationship to further enhance high-tech cooperation.
(The writer is a researcher with the North American Centre at the Institute for Defence Studies and Analyses, New Delhi)