Boost for India-US military trade ties

With the United States granting Strategic Trade Authorisation (STA-1) status to India, bilateral relations have received a shot in the arm. It will ease India’s purchase of high-tech defence and non-defence products that are otherwise subject to strict controls and licensing. In the past, purchase of high-tech items from the US required India to get a case-by-case licence. Permission from the highest authorities in the US was needed. The complicated and lengthy process for obtaining a licence acted as a major deterrent for Indian entities looking to access high-tech from the US. This obstacle has now been removed. A large number of high-tech products in the civilian space and defence sectors will be available for automatic transfer to India now. Importantly, India-US joint partnerships, co-production agreements, etc., will become easier. It was with the 2005 US-India Framework for Defence Relations that the US began opening the door for India to access American high-tech items. The STA-1 tag takes this further.

Most of the 37 countries in the world that have the STA-1 status are US allies in NATO. India is the third Asian country, after Japan and South Korea, to be accorded this status. Hitherto, the US accorded STA-1 status only to those countries that are members of all four technology denial regimes -- the Missile Technology Control Regime, the Wassenaar Arrangement, the Australia Group and the Nuclear Suppliers Group. Its granting of this status to India despite it not being a member of the NSG is significant. By granting STA-1 status to India, Washington has signalled that it will sell high-tech to India with or without it being an NSG member. This is a stinging rebuke to China, which has repeatedly and unreasonably blocked India’s entry into the NSG.

The granting of STA-1 status to India reaffirms that the US sees India as an important partner in its strategy to contain Beijing. Helping India build up its military muscle is therefore important to the US and the STA-1 status was necessary for this. Additionally, India provides the world with a large market for defence and dual-use hardware and technologies. By denying it STA-1 status hitherto, US companies have reportedly lost business to the tune of $9.7 billion over just the past seven years. Clearly, the US does not want to miss out on future opportunities. The US Congress’ recent decision to exempt India from sanctions for purchasing the Russian S-400 anti-missile system must be seen in this light. Washington is anxious to avoid drawing India’s ire at a time when India-US military trade is looking up and is poised to boom, thanks to the STA-1 status now.