US embassy cable - 05NEWDELHI7436

UNCLAS SECTION 01 OF 03 NEW DELHI 007436 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EB/TPP; SA/FO - RCHRISTENSON AND SA/INS - 
MNEWBILL 
USDOC FOR 4530/MAC/AMESA/OSAO/LDROKER/ASTERN 
USDOC FOR 3131/USFCS/OIO/DHARRIS 
USDOC FOR 6430/ITA/TD/ITI/KJENCI/EHOLLOWAY 
USDOC FOR 532/BIS/MDIPAULA-COYLE 
USDA FOR FAS/ITP/MEYER/ARGUETA 
DEPT PASS USTR FOR S.ASIA - AWILLS/BSTILLMAN 
GENEVA FOR USTR 
 
E.O. 12958:  N/A 
TAGS: ECON, ETTC, EINT, EINV, ETRD, PREL, EAGR, IN, HTCG 
SUBJECT:  RE-TOOLING THE HTCG:  EMBASSY'S THOUGHTS 
 
REFERENCES:  A)  NEW DELHI 2299 
             B)  NEW DELHI 2849 
             C)  SECSTATE 171713 
 
1.  (SBU)  SUMMARY.  As we plan for the December 1-2 
meeting of the High Technology Cooperation Group (HTCG) 
in New Delhi, the Embassy HTCG working group -- Econ, 
Pol, Sci, FAS, ODC, FCS - met on September 20.  The 
consensus of our group is that the focus of the HTCG in 
the post-NSSP era should undergo a gradual, but 
important, shift from drafting of export control 
legislation in India to trade facilitation issues, which 
will require adherence to export control laws of the US 
as well as of India.  In addition to this consensus, 
from Mission's perspective, several conclusions are 
worth noting.  We have received indications from Indian 
Ministries that they share our priorities for 
discussion:  biotechnology, defense trade, 
nanotechnology, IT and IPR issues.  Mission believes 
that both governments ought to strive to rope in the 
private sector so that it can initiate business 
activities in these areas.  The CEO Forum is uniquely 
positioned to support this effort. 
 
2.  (SBU)  Equally important to the future success of 
the HTCG is that both governments bring into the HTCG 
representatives from stakeholder agencies who have 
technical expertise and who can work effectively with 
the private sector.  While Mission has had a productive 
collaboration with USDOC/BIS on the export control legal 
and implementation front and the HTCG, trade 
facilitation will also require robust participation from 
USTR, DoD, HHS, USDA, DOJ, USDA, and other agencies.  On 
the Indian side, it will be essential that MEA, as the 
lead/coordinating agency, facilitate rather than inhibit 
GOI inter-ministerial and private sector participation. 
Mission believes that, as we shift into a  trade 
facilitation mode, the Ministry of Commerce and Industry 
will have to slowly assume  the leading GOI role and 
ultimately take over responsibility from MEA as HTCG 
coordinator.   Mission's recommendations for 
implementing this strategy follow.  END SUMMARY. 
 
NARROWING HTCG FOCUS WHILE BROADENING INTERAGENCY BUY-IN 
--------------------------------------------- ----------- 
 
3.  (SBU)  Mission recommends narrowing the HTCG focus 
by developing specific objectives for IT, biotech and 
defense technology.  At the same time, USDOC, as the 
coordinating agency, perhaps should ensure that other 
agencies are extensively involved and present at future 
HTCG meetings.  As a starting point, Mission suggests 
the following agencies be included:  USDOC (FCS and 
BIS), USDA (FAS), State (EB, OES, SA), USTR, USPTO, DOJ, 
DHS (USCS), Treasury, NSF, and DoD.  Once the USG 
identifies specific objectives, it will need to bring to 
the table those  who have the knowledge and a mandate to 
handle  policies that can facilitate and increase 
bilateral trade and investment in high technology. 
 
4.  (SBU)  As agencies join in, USDOC should perhaps 
brief new players on  USDOC's accomplishments on the 
HTCG to date.  We also must ensure that the private 
sector track has the right mix.  In our opinion, senior 
level representatives from USIBC, relevant private 
industries (IT, biotech, nanotech, and defense) and 
major R&D universities could be effective players.  As a 
matter of fact, one of our goals in the HTCG should be 
to encourage India to pursue the US model of R&D, i.e., 
which leverages government, university and private 
sector collaborations. 
 
ROLE OF THE PRIVATE SECTOR IN THE HTCG 
--------------------------------------------- - 
 
5.  (SBU)  The CEO forum, with 20 major US and Indian 
companies representing roughly USD 8 trillion in 
capital, could play an important role in the HTCG, by 
identifying major private sector projects it could 
launch in the coming months.  We are confident that 
nothing beats a few large projects to entice GOI 
participation from the top down.  With this incentive, 
the GOI bureaucracy will have no other choice but to 
engage us on policy initiatives that could encourage 
defense, biotech, IT, and overall infrastructure US- 
India collaborations.  By shifting the focus of the HTCG 
to developing big visionary projects, policy changes 
will then naturally follow. 
 
DEFENSE TECHNOLOGY:  DOD PARTICIPATION ESSENTIAL 
--------------------------------------------- -- 
 
6.  (SBU)  Mission believes that DOD's strong 
participation in the HTCG is essential as a robust USG 
strategy for defense sales in India is required to 
enhance the long-term Indo-US strategic partnership (Ref 
B).  As the complexity and range of issues in this area 
is large, DoD ought to encourage participation of those 
who can discuss in detail and with authority 
questions/issues that relate to defense technology, 
munitions licensing, defense procurement, and trade 
promotion. 
 
7.  (SBU)  At a minimum, there ought to  be a "defense 
basics" component to HTCG sessions to complement the 
more advanced topics that previous HTCG meetings have 
addressed.  The USG must be prepared to continually 
brief the unfamiliar nuts and bolts of our defense sales 
system to potential Indian buyers.  Such discussions 
would also allow the defense sector to understand the 
peculiarities of the Indian defense acquisition process. 
We can expect the GOI to raise offsets with us.  We 
ought to encourage the GOI to pursue offsets via private 
sector channels. 
 
TAAs: EXPLAIN AND EXPLAIN - THE GOI STILL DOESN'T GET IT 
--------------------------------------------- --------- 
 
8.  (SBU)  Smooth execution of Technical Assistance 
Agreements (TAAs) and International Traffic in Arms 
Regulations (ITAR) provisions is essential for progress 
in space and other areas of cooperation that involve 
sharing of sensitive USG technology with India.  The 
Indian Space Research Organization (ISRO) continues to 
express frustration and question the need for ITAR- 
related provisions in our TAAs.   The Ministry of 
External Affairs is not far behind.  As the ISRO TAA 
problem has been festering for nine months now, we 
believe that the USG should pursue a two-track TAA 
policy in the HTCG.  One is to raise the TAA requirement 
at a high political level (e.g. Foreign Secretary 
Saran), while continuing to engage at the working level 
(State, DoD, USDOC, DOJ) to encourage GOI to abide by 
TAA requirements. 
 
IPR REMAINS A CROSS-CUTTING ISSUE 
------------------------------------ 
 
9.  (SBU)  IPR protection cuts across almost every HTCG 
topic, whether related to biotechnology (both 
pharmaceutical and agriculture), nanotechnology, IT, or 
defense technology.  As such, the need to achieve Indian 
buy-in on IPR protection requires strong coordination 
among all USG agencies, but especially among State, 
USPTO, USTR, and USDOC.  By bringing the right experts 
into the HTCG, the HTCG can continue its important role 
in engaging India in across-the-board improvements for 
IPR protection. 
 
CHANGE THE FOCUS ON NANOTECHNOLOGY AND AG BIOTECH 
--------------------------------------------- ---- 
10.  (SBU)  Mission understands that USG agencies 
believe that agricultural biotechnology ought not to be 
part of the HTCG.  We concur as we attempt to shift HTCG 
focus and other fora are discussing this topic already. 
We believe that the nanotechnology focus ought to be on 
how India can add value in an area where the private 
sector is the driver of development.  Thus, we recommend 
that State, NSF and USDOC discuss USG nanotechnology 
activities in the HTCG context when Minister of Science 
Kapil Sibal will hold policy discussions in Washington 
on October 18 (Ref. C). 
 
COMMENT 
-------- 
 
11.  (U)  USDOC and State might consider convening a PCC 
to discuss these issues and agree on a way forward. If 
convened at an early enough time in the day, Mission 
would welcome the opportunity to participate by DVC. 
 
Blake