INDIA-US DEFENCE RELATIONSHIP 

1. Context 

2. Key points

• The relationship between the United States (US) and India in the defence sector has proven to be one of their most resilient and high-value.
• Testament to this is three broad trends that have taken shape in the past two decades.

1. Bilateral defence trade
2. Cooperation in related sectors which directly or indirectly bolsters their defence cooperation and
3. Strategic Cooperation in the Indo-Pacific Region

3. Evolution of India-US Defence Relations

• Defence cooperation was the signing of the "Agreed Minute on Defence Relations between the United States and India in 1995.
• The Next Step in Strategic Partnership (NSSP) released in January 2004 was critical to establishing a bilateral defence relationship.
• The agreement was not related to core elements of bilateral defence trade but intended to augment cooperation in areas such as civil nuclear, civilian space programmes, high-technology trade and missile defence.
• It led to expanded collaboration and eventually to the June 2005 ten-year defence framework agreement.
• Today, the U.S. undertakes the largest number of military exercises which have gradually evolved in scale and complexity.
• During the Cold War, more than three-fourths of India's defence equipment was of Soviet Origin.
• This gradually began to change, and in recent years, the U.S. and Israel emerged as major suppliers.
• From a total of less than $ 400 million in defence acquisitions during 1947-2005, the U.S. has signed defence contracts of over $15 billion since.
• Pathfinder projects have been identified under this Defence Technology and Trade Initiative (DTII).
• To get around export control licensing and other bureaucratic hurdles, an India Rapid Reaction Cell in the Pentagon was set up. In 2016, India was designated as a "Major Defence Partner" country.
• Another step forward in the middle of this year was the inclusion of India in the Strategic Trade Authorisation-1 (STA-1) category, putting it on a par with allies in terms of technology access.
• This should enable the DTII to graduate to more ambitious projects.
• UAV Technology sale to India approved. The transfer of state-of-the-art UAV technology to India will be the first significant progress after India enters into the exclusive Missile Technolgy Control Regime (MTCR) and after the US has designated India as a major defence partner.

4. Strategic Rationales

• The India-US defence partnership has a strategic dimension with its most prominent implications for the Indo-Pacific region.
• The strategic persuasions of a "free, open and secure" Indo-Pacific stem from the strong bilateral defence ties between the two countries.
•  The bilateral framework lays out four strands of defence cooperation in the Indo-Pacific: maintaining peace and security;
• Defeating terrorism and violent extremism
• Preventing the proliferation of weapons of mass destruction and associated materials, data, and technology and 
• Supporting a rules-based order that protects the free flow of commerce in the region.

1. It seeks to modernise its military by acquiring sensitive and advanced technologies necessary for its own national ambitions and regional interests.
2. It hopes to bridge its capacity-capability deficit by developing home-grown know-how and skill sets in both the armed forces and the defence industry through specific programmes of co-production and co-development.
3. The Initiative on Critical and Emerging Technologies (iCET) agreement between India and the US, reached in May 2022, identifies areas of mutual interest in technological cooperation.

5. Changes in US export law to Benefit India

• The United States has made changes in its export control laws that will benefit India by facilitating a smoother transfer of technologies and arms.
• These changes have been made on par with the recognition of India's status as a major Defence partner.
• The new rule creates a presumption of approval for Indian firms seeking to import Commerce Department-controlled military items, except weapons of mass destruction-related goods.
• Henceforth, companies will not need a license at all after becoming a Validated End User (VEU).
• Under it, India will be denied licences only in the rarest circumstances.

6. Foundational agreements between India and US

1. Logistics Exchange Memorandum of Agreement or Logistics Support Agreement (LSA).
2. Communications Interoperability and Security Memorandum of Agreement (CISMOA).
3. Basic Exchange and Cooperation Agreement (BECA).

6.1. Significance of Foundational Agreements

• These agreements are the expected gains in defence co-production with the US as the latter eases the terms of technology transfer.
• The signing of these agreements should be strictly made contingent on US assurance of the transfer of technology.

• The decision to impose a ban on the export of critical supplies required for Covid-19 vaccines under the Defense Priorities and Allocations System Programme (DPAS) of the Defense Production Act (DPA) in 2021 directly affected India's ability to manufacture vaccines.
• India's ties with Russia in the defence sector also remain a factor in the growth trajectory of the India-US defence relationship. Particularly in the backdrop of the war between Russia and Ukraine.

8. Conclusion

• The current India-US defence relationship is important for both commercial and strategic reasons.
• The steps taken by both sides over the years, along with mechanisms that have institutionalised the relationship, have ensured a certain degree of momentum in the relationship.
• Recently added compliances in foreign companies' ability to spend in the Indian Defence sector, along with the push to make India more self-reliant through Atmanirbhar Bharat, have not pushed away investments from the US.
• Rather, US Companies have increased their partnerships with Indian companies aimed at fostering growth in the defence sector.

 Source: orfonline.org