US and India seek to enhance trade in dual-use technologies

WASHINGTON — India and the United States have voiced a desire to capitalise on thriving strategic partnerships to boost bilateral trade in "dual-use" advanced technology products.


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Published: Sat 24 Feb 2007, 8:33 AM

Last updated: Sat 4 Apr 2015, 8:30 PM

"Few markets are more exciting or more significant than high tech in India," US Commerce Secretary Carlos Gutierrez, who visited India earlier this month, told the US-India High Technology Cooperation Group (HTCG) on Thursday.

The group, established in 2002 to expand bilateral trade in controlled products that may have both commercial and military applications, is holding a two-day meeting here to discuss further expansion of such trade.

Visiting Indian Foreign Secretary Shivshankar Menon said the US and India should take advantage of significant steps taken by their leaders in 2006 to strengthen trade ties and elevate cooperation on high technology to a new level.

During President George Bush's 2006 trip to India, he and Prime Minister Manmohan Singh signed several agreements and pledged to work to double by 2010 two-way trade, which reached $32 billion in 2006.

The two countries are seeking closer cooperation in the aerospace, energy, environmental, biotechnology, medical, information technology and telecommunications industries.

Gutierrez said the US sees many opportunities for both US and Indian businesses to develop commercially viable technologies. He said US businesses are particularly interested in clean energy technologies and would send a trade mission to India in April to explore the potential for cooperation in this area.

US Deputy Secretary of Commerce David Sampson, who heads the US delegation to the meeting, said India has gained far greater access to US technology in recent years.

This, he said, is the result of "sweeping changes" in the US export control regime, which requires US companies to get licences before they can sell to India certain advanced technology products with potential military applications.

As US sales to India expanded from $3 billion in 1999 to $10 billion in 2006, the share of exports that required dual-use licences plummeted from one-quarter to less than one per cent in the same period, according to the Commerce Department.

Gutierrez said, however, that both sides needed to continue to identify and remove obstacles to trade if they want trade flows to expand further.

He said his department hopes to launch in a few months a "trusted customer" programme, which would permit exports of certain advanced technology products for civilian use — without the usually required licences — to companies in India with good records of compliance with non-proliferation requirements.

From the Indian side, Gutierrez said, the administration is seeking further opening of key markets, reductions in tariffs and tougher enforcement of intellectual property rights.

Earlier, another Commerce Department official told reporters the administration has already identified as potential candidates for the "trusted customer" programme a number of Indian companies in aerospace, chemical and semiconductor industries.

Assistant Secretary of Commerce Chris Padilla said the administration does not expect huge increases in US sales to India stemming from this programme. He said the administration wants the US export control regime to reflect better a closer relationship with India and further build up trust between the two countries and their business communities.

As India continues to harmonise its export control regime with multilateral non-proliferation arrangements, Padilla said, the US will look at expanding the scope of products covered by the "trusted customer" programme. "We are changing the dialogue from discussions about sanctions to discussions about incentives," he said.

In addition, Padilla said, the administration will look closely into export control regulations to make sure that "there aren't any vestiges of the past" among them. Relaxing any export controls requires consultations among several US agencies.

Washington imposed controls on exports of dual-use technologies to India during the Cold War. In response to a 1998 nuclear test conducted by India, the Clinton administration added trade sanctions to those controls.

Many Indian companies believe those sanctions prevent them from doing business with US firms, Padilla said. "In fact, the point we want to make is that very few US exports to India require licences any longer."

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