India has become the 3rd Asian country after Japan and South Korea and 37th in the world to get the Strategic Trade Authorisation-1 (STA-1) status when the US issued a federal notification on 4th August to this effect, paving the way for high technology product sales to New Delhi, particularly in civil space and defence sectors.
The STA-1 gains significance as the Trump Administration made an exception for India, which is yet to become a member of the Nuclear Suppliers Group (NSG) because of Chinese veto. Traditionally, the US has placed only those countries in the STA-1 list that are members of the four export control regimes: Missile Technology Control Regime (MTCR), Wassenaar Arrangement (WA), Australia Group (AG) and NSG. India is a member of only three of the four multilateral export regimes.
This exception is only for New Delhi and is intended to send a strong political signal to China and the rest of the world, taking into account that America’s closest ally Israel is yet to be given this status, primarily because it is not member of these four multilateral export control regimes.
The United States eased export controls for high technology product sales to India, granting it the same access as NATO allies. US Commerce Secretary Wilbur Ross on July 30 said that the move to grant STA-1 status to India reflects its efforts to improve its own export-control regime, its adherence to multilateral export rules and its growing status as a US defence partner.“STA1 provides India greater supply chain efficiency, both for defence, and for other high-tech products,” said Ross. He said the goods worth $9.7 billion that India could have imported from the US over the last seven years were affected as a result of the lack of the elevated status.
India on her part wants to develop security ties with America to facilitate her becoming dominant regional and global power in the foreseeable future. Shared perception about ‘terrorism’ has further cemented their relations where India promptly endorses US stance on “War on Terrorism” with a hope to turn US interests to its advantage by labeling freedom struggle in Kashmir as Pakistan sponsored insurgency. Reflections of converging interests include: US-India Next Steps in Strategic Partnership (NSSP) initiative, signing of 123 Nuclear Agreement, missile defence, and ten-year defence framework agreement that calls for expanding bilateral security cooperation. However, India will have to ensure that the purchases of defence equipment from the US also includetechnology transfer and the sensitive equipment as the past experience tells otherwise.
The Ministry of External Affairs said it welcomed the US decision. “It is a logical culmination to India’s designation as a Major Defense Partner of US and a reaffirmation of India’s impeccable record as a responsible member of the concerned multilateral export control regimes,” the ministry said.
India’s inclusion is beneficial mostly for the purposes of increasing the speed of sale of high-tech defence and non-defence products that are otherwise subjected to strict controls and licensing. This move means that India can get easy access to latest defence technologies, with the reduction of the number of licenses needed for exports from the US. It will also boost the foundational Communications, Compatibility and Security Agreement (COMCASA).
There are a number of reasons for the US to give India STA-1 status. Firstly, India and the United States share an interest in countering China’s expanding economic and military weightage and the US has emerged as a top arms supplier to India, selling more than $15 billion of weapons over the past decade as New Delhi modernises its Soviet-era military.
Secondly, the US wants that India should completely stop buying its defence equipment and weapons from Russia for obvious reasons. India has moved towards acquiring five advance S-400 Triumf Air Defence Missile Systems from Russia costing Rs 39,000 crore despite the looming threat of US sanctions. Once India inducts S-400 systems, the vital installations like nuclear power plants and nuclear arsenal will be well protected and taken care of. These long-range missile systems will tighten its air defence mechanism, particularly all along the nearly 4,000-km-long Sino-India border. India and Russia have worked on a roadmap to get around the financial sanctions flowing out of the recent US law called Countering America’s Adversaries Through Sanctions Act (CAATSA) that seeks to deter countries from buying Russian weapons. The US Congress on 23 July took the call on granting India a waiver after intense lobbying because putting India under sanctions would weaken the Indo-Pacific strategy of the US to counter China’s proactive influence in the region.
Conversely, the US has serious concerns about India’s plans to buy the S-400 air defence system from Russia, as it will inhibit ability of militaries from the two nations to operate together, chairman of the powerful US House Armed Services Committee said. US concerns are that the purchase of the S-400 from Russian system would also make it difficult for the US to share sensitive technology in the future.
Notably, the US weaponry has been costlier than similar weapons sourced from other countries except where large economies of scale have been available to US manufacturers. Political and diplomatic strings have also traditionally accompanied the US arms sales and many of the recipients have been required to align their policies with that of the US. It has also been seen that the US uses punitive measures like economic sanctions as a foreign policy tool and this in turn usually leads to cessation of spares support for US military equipment already delivered and alsoon-site inspections of sold US weapons, make buyers jittery and nervous. India had experienced this situation in past transactions.
While it is widely acknowledged that US defence technology is the most advanced, it is also accepted that often purchasing US defence equipment comes with high restrictions. The US only shares most of its high-end defence technology with very few allied nations, for example, the UK, which gets open access to US defence technology. However, even the UK faced restrictions as is evident from the F-35 programme wherein sharing of the F-35 software source code with UK became a big issue.
The US-India proximity after STA-1 status will be judged upon which US technologies are to be transferred to India. While India insistslatest defence technology transfer into the country, as it reserves the right to determine which technologies it requires on a case-to-case basis and it cannot accept obsolete technologies.
The STA-1 is a timely announcement as it comes ahead of the 2+2 dialogue scheduled for September 6 when US Secretary of State Mike Pompeo and Defence Secretary James Mattis are due to visit India and meet with their counterparts. The question of purchase of defence equipment from other than US should be raised at the 2+2 dialogue especially purchases of Russian S-400 missiles despite waiver of sanctions by the US. The issue of transfer of technology including the sensitive products during the purchase of defence equipment should also be committed at the summit.