The US last week removed companies under the Indian Space Research Organisation and the Defence Research and Development Organisation off the commerce department’s “entities list”. In another move, it also opened up previously prohibited dual-use technologies for export. Amit Mitra, secretary-general of the Federation of Indian Chambers of Commerce and Industry (Ficci), spoke about what these steps mean for India-US trade ties even as US commerce secretary Gary Locke visits India. Edited excerpts:
There were two steps the US government took last week—one on the entities list and the other on export of dual-use technology. What is their significance?
First, we need to understand that technology denial in terms of specific companies being in the entities list is very different from the export-control regime... We had a total of 212 Indian companies which were on the entities list originally. What that meant is that no American company could trade or invest with these companies. That 212 has slowly come down to four in the last six months or so. Those four are conglomerates and under them there are 16 companies... Out of the 16 companies on the entities list, nine companies have been taken off it. In effect, only the Atomic Energy Commission (AEC) and nuclear plants not inspected by the international inspectorate system remain on the entities list... Other than these, all companies are open for trade with the United States. That does not mean they will not meet with licensing requirements that they may meet with denials of dual-use technologies... Now in this, there has been a big change that nobody has talked about. On the 27th of January, India has been raised from the three-country grouping called D1, D2, D3 to a higher level of strategic alliance called A2. This is the big step—that means a whole lot of areas which we could not trade in, whether you were in the entities list or not, areas where you needed licensing, which was prohibitive in the nature of licensing, we have been raised from that level to the equivalent of many European countries. Obviously, this in a way has been timed with the visit of Locke.
Could you give an example to show what this elevation to A2 means for Indian businesses?
I think the biggest advantage of this is vaccines. We could not import mature biotechnological materials to convert into vaccines... What this will do is, while many prohibited items would remain in the licensing structure, licences would be much easier to acquire as compared to the previous process.
You had said once that the US denied India 10 out of a list of 16 dual-use technologies, whereas European allies were denied four. After the change, how many types can we access from the US?
One example I have given you—which is vaccines. Even on homeland security technologies, there was one section that relates to terrorist combat technologies. So out of 10, I would not be surprised if five or six get dropped and we get close to the European numbers. We may not be equal to Nato (North Atlantic Treaty Organization) members, at the A1 level...
Would you say that the US has taken these steps as it is struggling to revive its economy and needs India more today as a big market for technology?
It would be wrong to say the US needs India and we don’t need them; its technology we desperately need. If we have an F16 or an F18, it strengthens our capacity to deal with our neighbours in terms of potential threats. In terms of civil aviation, millions of jobs have been created in India. When you go to the nuclear sector, we have promised over time 274,000 megawatts in the next 15 years. Once the shift takes place from uranium to thorium, that becomes an even bigger play. As far as safe cities is concerned, our cities are prone to terrorist activities because we don’t have the latest technological prowess. Just as the United States needs to sell its technology to create new jobs, that is their challenge of this decade, we need them as desperately to upgrade our economy...
What do you think will be the thrust areas during Locke’s trip?
...One of the agendas of secretary Locke will be how does he get over the question of (civil nuclear) liability, which has been dogging the US and many other countries. Two: civil aviation. Air India was expected to have been supplied with 28 Boeing Dreamliners...Then there are Jet Airways, SpiceJet... Then you come to defence, which is the third item. We are looking at a global competition for medium multirole combat aircraft. Now the US has two of those in the competition—the F16 from Lockheed Martin and the F18 from Boeing...Then we come to ICT (information and communication technology), which is the fourth item...The key to ICT to them is technology driven—which is homeland security. India today is facing a massive Maoist insurgency, it is facing terrorism from across the border, so homeland security is a matter that is going to expand massively. All this means huge purchase of advanced, cutting-edge, newly developed homeland security material.