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US elevates India’s status to ease export controls for high-tech product sales

The United States has eased export controls for high-technology product sales to India by elevating its status to a Strategic Trade Authorisation-1 (STA-1) country.

The information was shared by US Commerce Secretary Wilbur Ross on July 30, 2018. He said that this is a very important change in India's status in the export control regime.  

With the move, the United States has granted India the same access as NATO allies, Australia, Japan and South Korea.

Significance

The designation of ‘STA-1 country’ will allow India to buy more advanced and sensitive technologies from the United States, at par with that of the closest US allies and partners and ensure enduring cooperation into the future.

It will authorise the export, re-export and transfer of specified items on the Commerce Control List (CCL) to destinations posing a low risk of unauthorised or impermissible uses.

The elevated status will also provide India with greater supply chain efficiency, both for defence and other high-tech products.

The granting of the special status to India comes after the US recognised India as a Major Defence Partner in 2016. It reflects India’s efforts to improve its own export-control regime and its adherence to multilateral export rules.

About Strategic Trade Authorisation

The STA-1 list currently comprises 36 countries in total.

India is the only South Asian country to feature on the list. Other Asian countries designated as STA-1 include Japan and South Korea.

Till recently India was designated as STA-2 countries along with seven others.

The authorisation permits the export of a defined set of items on the Commerce Control List to Allies and certain other friendly countries without a specific license.

These items include certain dual-use items and certain less significant munitions items, predominantly parts and components.

The STA imposes enhanced compliance requirements by requiring foreign importers to certify in advance of receipt of STA-eligible items that they will abide by US export control regulations, including the need to obtain a US license to export or re-export outside of STA-eligible countries.

Background

The announcement of India’s special status comes ahead of high-level talks between the United States and India, which are scheduled to take place in September 2018. The two-plus-two dialogue will be attended by US Secretary of State Mike Pompeo and Defence Secretary Jim Mattis..

In recent years, the political and military ties between India and the United States have expanded significantly although trade differences have risen ever since US President Donald Trump took office in 2017.

Both India and the United States share a common interest in countering China’s expanding economic and military weight.

The US, in fact, has emerged as a top arms supplier to India, selling more than $15 billion of weapons over the past decade.

Recent reports reveal that the United States has also offered India the armed version of drones that were originally authorised for sale as unarmed and for surveillance purposes.

If the deal comes through then, it would be the first time that the United States has sold a largely armed drone to a country outside the NATO alliance.

The development also comes as India has been admitted to almost all major export control regimes, except for the Nuclear Suppliers Group (NSG).

 

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