INDO-US TRADE

STA status shows US values India

Shekhar Dutt Shekhar Dutt

THE US GOVERNMENT’S decision to move India to Tier 1 of the Department of Commerce’s Strategic Trade Authorisation (STA) licence exemption is a good development for India. Not only does it make transfer of technology and technology products easier, but it is also an acknowledgement of the faith the US has vested in India.

The US has demonstrated it values India as a reliable partner. So, there need not be a case-by-case decision on sale and transfer of products that are eligible for export under the STA Tier 1 list; the decision has been taken en bloc.

There are at least 36 countries that the US has placed in the Tier 1 of the STA list. Most of these are its NATO partners. From Asia, there are Japan, South Korea and Israel. India is the only country from south Asia to be given this status. Though the US sold F-16 aircraft to Pakistan, it did not share the know-how of the technology.

The world has changed a lot since the Cold War era. It moved from being a unipolar world with the rise of China. Now, there is a multipolar world, where India is a possible pole. And, the US is recognising India’s emergence.

The first experience we had of the US loosening some control was when we were discussing the US-India Framework for Defence Relations, signed in 2005, when I was defence secretary. It was the first time that the US opened its doors to us for accessing high technology. After that, the Indo-US nuclear deal was signed. The STA Tier 1 position was the next step.

The big difference is that now a huge number of hi-tech items will be available for transfer to India automatically.

This designation authorises export, reexport and transfer of specific items on the commerce control list to destinations with a possibly low risk of unauthorised or impermissible use. Items eligible for export under STA Tier 1 are those subject to national security, chemical and biological weapons, regional stability and crime control. Almost 50 per cent of these items will not require licences under STA Tier 1, therefore, we, in India, get greater accessibility to technology items.

Earlier, too, India was getting hi-tech items, but it required case by case licence. It required permission from the highest authorities in the US for companies to sell or transfer technologies to India. Obtaining this licence involved complicated procedures, which discouraged several Indian entities from approaching the US for technology.

The big difference, therefore, is that now a huge number of hi-tech items will be available for transfer to India automatically. This would make it easier for Indian and US companies to make better and superior products and deal in sensitive technologies. This would also pave the way for joint partnerships, co-production agreements and co-development deals between Indian and US companies.

India has certain offset clauses in most strategic equipment deals with other countries, which were introduced during my tenure as defence secretary. The new dispensation will have an enabling effect on these offset deals as US companies will be able to transfer technology to India, and get equipment made in India as part of the offset package in major strategic deals. Indian and US companies can also enter into partnership deals over offsets. This will enable greater realisation of offset possibilities and give thrust to manufacturing of hi-tech items in India. It will help us to acquire and maintain a technology lead in global manufacturing, and also play a major role in the global supply chain. India could become the hub of high-technology manufacturing.

As told to Rekha Dixit

Shekhar Dutt is former deputy national security adviser, defence secretary and governor of Chhattisgarh.