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29 February 2024

US eases some high-tech export curbs on India

By Reuters

The US Commerce Department said on Monday it was easing restrictions of exports of high-technology goods to India in recognition of the two countries' stronger economic and national security ties.

"Today's action marks a significant milestone in reinforcing the US-India strategic partnership and moving forward with export control reforms that will facilitate high-technology trade and cooperation," Commerce Secretary Gary Locke said in a statement.

It follows President Barack Obama's meeting with Prime Minister Manmohan Singh in November in New Delhi, where they announced plans to expand cooperation in civil space, defense and other high technology sectors.

It also contrasts with remarks made by US Treasury Secretary Timothy Geithner before Chinese President Hu Jintao's visit last week to the United States.

Geithner tied the possibility of increased US high-technology exports to China to movement by Beijing on currency and a number of trade reforms.

As a first step in implementing Obama and Singh's commitment, the Commerce Department's Bureau of Industry and Security said it would publish a new rule changing how India was treated under Export Administration Regulations (EAR).

A key measure removes several Indian space and defense-related organizations from the US Entity List, which imposes extra export licensing requirements on foreign groups or individuals whose activities have aroused concern about the possible diversion of US high-technology products that could be used to build weapons of mass destruction.
Those removed from the Entity List include Bharat Dynamics Limited, four subordinates of India's Defense Research and Development Organization and four subordinates of the All Indian Space Research Organization.

The reforms also "realign" India's standing in the US export control regime by removing it from several country groups associated with proliferation concerns. It adds India to a more favorable category consisting of members of the Missile Technology Control Regime.

"These changes reaffirm the US commitment to work with India on our mutual goal of strengthening the global nonproliferation framework," Under Secretary of Commerce Eric Hirschhorn said in a statement.

Locke will lead 24 US businesses on a high-tech trade mission to India in February.
The group includes Boeing, Exelon Nuclear Partners, Lockheed Martin and GE Hitachi Nuclear Energy.

The delegation, which also includes senior officials from the US Export-Import Bank and the Trade Development Agency, will make stops in New Delhi, Mumbai and Bangalore.

An administration official, who briefed reporters on condition he not be identified, said less than 1 percent of current US-India trade was affected by export controls.

However, "the perception of onerous export controls certainly has been a hindrance to high-technology trade over the years," the official said.

"The goal here is to make sure we are in the best possible place to ensure trade in defense, civil space and high-tech can proceed in an expeditious and ultimately prosperous fashion," the official said.

Even with the reforms announced on Monday, there will still to be licensing requirements on many sensitive U.S. technologies that go to India, as there on some technologies to all countries, the administration official said.