How do you characterise the agreement? It is a major milestone in the US-India relationship. The statement issued by President Bush and Prime Minister Vajpayee about shared goals and transformation of the relationship clearly indicates to our public a new attitude and mindset. We have common goals of controlling the proliferation of weapons of mass destruction and combating terrorism.
Although we have been talking about high-tech transfers for some time, this is a very significant agreement because it provides the framework of mutual steps that will greatly enhance cooperation. We are on a forward trajectory and given the complexity of these issues, the progress has been remarkable.
Was the announcement related in any way to improvement in Indo-Pak ties?
No. As you know we have been discussing this for a while. The timing is a coincidence. We address issues with India independently of Pakistan. We do not view the US-India relationship through the prism of India-Pakistan relations. Obviously, we are interested in stability in South Asia.
What are the new areas in which India and the US will cooperate?
There are such areas as nanotechnology, defence technology, biotechnology, tele-education, tele-medicine, the development of commercial satellites and power generation. We can use satellite connections to get doctors to help patients in rural areas. We’re looking at nuclear power generation and helping with improving safety at civilian nuclear plants. We’re looking at weather forecasting. There are a lot of opportunities that will unleash the full economic potential of the relationship.
How soon will the agreement be translated into reality?
The way the framework is set up, we are ready to take steps as quickly as India is able to. There is a whole range of technology where we’re very anxious to cooperate. Biotechnology, for example. We are prepared to have a liberal export licensing regime but we need a good framework for protection of intellectual property in India. US companies are also interested in co-production of defence items in India.
President Bush recently announced a plan for a human settlement on the moon. Is it something India can participate in? In space exploration, we have looked to other partners. I am sure it will be a topic of conversation in the future.
Indian companies say America’s tendency to impose sanctions makes it an unreliable partner. Will this agreement ease those worries?
The sanctions were imposed in 1998 because of the nuclear tests. It is a gross exaggeration from that to say that the US is sanctions-happy. These are not capricious moves. Only some Indian companies are on the Entities List now. It doesn’t mean exports can’t go to them, only that a licence is required.
We are looking at ways to ease procedures on both sides—licensing procedures at our end and customs procedures and tariffs on the Indian side.
One misperception is that the US bars many items from going to India. In reality, most items can be exported to India with no problem. Trade requiring licences is only about 1 per cent of overall US exports to India. The rate of approval for licence applications is about 90 per cent and denials amount to one-third of one per cent of total trade. There is some hangover effect from the sanctions regime.
In fiscal 2003, which ended last September, total US exports to India have grown by approximately 25 per cent to $4.8 billion. We also processed almost 200 more licence applications. Despite making decisions on this increased number of licence applications, we actually denied fewer applications in fiscal year 2003 than we did in fiscal year 2002.
You say that no non-proliferation laws will be changed, yet this agreement will enable more things to happen. How?
What we are discussing is modifying some practices without changing our commitment to international treaties. There will be cooperation within broad policy parameters.
We have to build economic constituencies that have a stake in the relationship. They’ll help ensure that cooperative attitudes permeate throughout our societies, enabling us to be better trading partners and moderating potential disputes.