US embassy cable - 05NEWDELHI1230

UNCLAS SECTION 01 OF 02 NEW DELHI 001230 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL, ETTC, MASS, TSPA, CVIS, TSPL, FR, TH, IN, Indo-US, NSSP 
SUBJECT: IMPROVING US-INDIA DEFENSE COOPERATION: INDUSTRY 
OFFERS IDEAS 
 
 
1. Summary:  In a February 10 meeting sponsored by the US- 
India Business Council (USIBC) and the Confederation of 
Indian Industries (CII), senior Indian and US defense 
company representatives suggested that to expand the 
bilateral defense market, the USG should reform its export 
licensing process, showcase how NSSP and other progress make 
the US a more reliable supplier, and consider more co- 
production with Indian manufacturers. End Summary. 
 
2.  On the margins of the 2005 AERO India trade show hosted 
by the GOI, the Ambassador represented the USG at the first 
meeting of the US-India High-Technology Group (HTCG) sub- 
group on "Indo-US Industry Cooperation in Defense 
Production." He joined a panel comprised of former U/S 
Thomas Pickering (representing Boeing and co-chair of the 
USIBC Defense Services Mission), retired Lt. Gen SS Mehta 
(representing CII), and Maj. Gen HS Sehgal (Technical 
Manager, Land Systems, Ministry of Defence).  US Export 
Control Attache Michael Rufe (USDOC) also attended. The 
audience of about 50 was equally divided between USIBC 
delegates from US defense manufacturers and GOI defense 
sector entities invited by CII. 
 
3.  The goal of the event was to identify possible specific 
priority programs for US-India defense production. In his 
opening remarks, the Ambassador invited the Indian 
government to "test us" to prove the USG is a reliable 
supplier as well as a strategic partner.  He cited changes 
in the US-India relationship such as the Next Steps in 
Strategic Partnership (NSSP) and the powerful and growing 
India lobby in Washington as proof of a long-term, mutually 
beneficial relationship.   Maj. Gen Sehgal gave an overview 
of the MoD's procurement procedure. 
 
4. Members of the audience raised the following points: 
 
 - US export licensing requirements disadvantage US industry 
at each stage of defense sales transactions: talk, 
negotiate, sell and transfer. Could there be a "duration of 
program" license for 15+ years that might cover contacts 
sufficiently to put GOI concerns at ease?  Could existing 
contracts be protected by higher thresholds required to 
sanction them under US law?  (Note:  Ambassador Pickering 
noted such an export license would not be useful since 
Congress can always change laws and policy. End note.) 
 
 - Could any Indian end-users be pre-cleared so that only 
the technology and the use need verification?  In any case, 
can the export license process be expedited? 
 
 - The USG has to thoroughly explain how industry will be 
affected by changes made under the NSSP.  Suggestions for 
doing this included releasing a profile of how many dual-use 
BIS and munitions list DTC licenses have been granted since 
NSSP was launched, what areas NSSP has facilitated or 
removed export licensing requirements for, the processing 
times for licenses, and a breakdown of licenses granted by 
industry. 
 
 - Could the Glenn Amendment be repealed? 
 
 - Could a DTC specialist be placed at Embassy New Delhi, or 
at least come on TDY to brief the Indians on export licenses 
for defense sales? 
 
 - Indian industry asked for more co-production, and joint 
research and development, as a way to make US tenders more 
attractive to the GOI. 
 
 - Lt. Gen Mehta asked if co-production of anti-terrorism 
equipment could be a starting point for broader US-India 
cooperation and increasing high-tech trade. 
 
5. Comment:  While few specific projects were identified for 
US-India defense cooperation, both US and Indian industry 
were upbeat about the future of their commercial 
relationship. Many questions could not be substantively 
addressed because there was no DTC or DoD representation at 
this event.  The mission strongly recommends expanding USDOC 
export licensing seminars in India to include State(PM) and 
Defense representatives in order to respond to queries that 
inevitably cross USG agency authorities. End Comment. 
 
MULFORD