What’s In The U.S.-India Export Agreement?

Posted by at 9:01 pm on November 8, 2010
Category: BISCCLEntity List

White House PhotoA joint statement released today by President Obama and Prime Minister Singh of India announced a new planned cooperation between the United States and India. Long on aspiration and short on details, the statement says that the two countries have agreed to “transform bilateral export control regulations and policies to realize the full potential of the strategic partnership between the two countries.”

The part of the proposal that has attracted the most attention, particularly in the Indian press, is the agreement to remove some or all of the Indian companies and agencies currently on the Entity List maintained by the Bureau of Industry and Security (“BIS”). Currently, the Entity List, which adds special license requirements for most exports to the designated entities, covers Bharat Dynamics Limited, three subordinate agencies in the Defense Research and Development Organization, four subordinate agencies of the Indian Space Research Organization, and two components of the Department of Atomic Energy as well as all nuclear reactors not under International Atomic Energy Agency safeguards.

The language in the joint statement relating to these entities is somewhat ambiguous:

[T]he two leaders decided to take mutual steps to expand U.S. – India cooperation in civil space, defense, and other high-technology sectors. Commensurate with India’s nonproliferation record and commitment to abide by multilateral export control standards, these steps include the United States removing Indian entities from the U.S. Department of Commerce’s “Entity List” and realignment of India in U.S. export control regulations.

Notice the statement does not say that “all” Indian entities will be removed from the Entity List. Because the focus of the statement is on cooperation in “space, defense, and other high-technology sectors,” there is a good possibility that every Indian entity except the two listed Department of Atomic Energy components and the unsafeguarded nuclear reactors will be removed.

It is also not clear what is meant by the “realignment of India in U.S. export control regulations.” Perhaps India might be removed from Country Group D and promoted to a more-favored group. Maybe the Country Chart will be amended to change the reasons for control applicable to India. Or maybe licensing officers at BIS will be directed to think five nice thoughts about India each day.

Finally, the joint statement indicates that the U.S. will support India’s membership in four multilateral export control regimes — Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group, and Wassenaar Arrangement. Of course, India will first have to adopt the controls required for those regimes, something it has so far not done.


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Copyright © 2010 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)


Does it seem that perhaps the current president is beginning to use export control regulations as yet another means to redistributing wealth. “Civil space, defense, and other high-technology sectors”, are about the only remaining aspects of the U.S. economy which we still retain some advantage in the world market. Lowering the controls on the exports of these types of technology only server to lessen the position of the U.S.

Comment by Ted on November 9th, 2010 @ 1:04 pm

It seems that the US Government seeks to change the membership rules of the four non-proliferation regimes to expand business opportunities for U.S. exporters and create jobs for Americans, at the expense of long-standing non-proliferation objectives.

In the Fact Sheet: U.S.-India Partnership on Export Controls and Non-Proliferation recently distributed by The White House in anticipation of President Obama’s trip to India, the U.S. stated that it intends to support India’s full membership in the four multilateral non-proliferation regimes “in a phased manner and to consult with regime members to encourage the evolution of regime membership criteria…”

The announcement said that “the Government of India would take steps toward full adoption of the regimes’ export control requirements to reflect its prospective membership, with both processes moving forward together.”

Currently all four non-proliferation regimes require for membership, among other things, adherence to certain non-proliferation treaties and international agreements and a legally based export control regime that is implemented and enforced. Although India is a state party to the Conventional Weapons Convention and the Biological and Toxin Weapons Convention, it is not a state party to the Nuclear Non-Proliferation Treaty and, indeed, has been historically been hostile to the treaty.

Under current membership rules of the Nuclear Suppliers Group, India would not qualify for membership, because it is not a state party to the NPT nor any other nuclear non-proliferation treaty or international agreement. The USG itself recognizes that India’s export control system needs to be improved and its scope extended to cover the full list of internationally recognized strategic items and technologies.

The Hindu Times reported on November 7, 2010, that by the USG supporting India’s full membership in the NSG and the other regimes, the Obama Administration “has finally opened the door for a country to transcend the legal confines of the NPT.”

When the former Bush Administration arm-wrestled the NSG to grant a waiver in 2008 for the US to commence civilian nuclear trade under the US-India civilian nuclear technology agreement, it was feared by many NGOs and non-proliferation experts that the US-India deal and the NSG waiver weakened the current global nuclear non-proliferation regime.

It may be an appropriate time to consult with other regime members regarding changes to membership rules because these have been considered too restrictive by those who seek to become “a member of the club” that results, among other things, in a license free zone among member states for trade in strategic goods identified on that regime’s control list. But to grant a state membership based on “prospective” adherence to the strategic controls lists and licensing guidelines, without first meeting the test of having an effective national export control regime, including evidence of its enforcement record, as well as a state’s commitment to international non-proliferation treaties and agreements will further weaken the NPT, and increase proliferation risks as more states enter the market to engage in strategic trade.

Comment by Carol A. Kalinoski on November 9th, 2010 @ 5:41 pm

In regards to the above, I beg to differ. Many, many former partners in the defense and civil space industries are going so far as to eliminate U.S. product and technology from formerly strong partnerships which advanced our technology.

One of the most obvious examples of that decline is the U.S. satellite industry. In the era when satellites went back to control by the DDTC there was a precipitous drop in business. That included former sales to strong allies like Canada. Without sales there is no money for R&D.

The European Space Agency has been very vocal in their criticism of our export controls and in the chilling effect they have on scientific as well as defense related collaboration. Again these are our strongest allies.

Bottom line what advantage we do have is being eroded by export controls designed for the cold war and not relevant to the era we live in. We control items and technology that haven’t been state of the art since that era. I believe in the greatness of America but not in our insistence to hold to the status-quo.

Comment by LDM on November 9th, 2010 @ 5:41 pm

@Ted: That tea y’all been a partying with come from China. Export controls are the principle reason the U.S. space industry has been displaced.

Comment by Hillbilly on November 10th, 2010 @ 7:52 am