Ending the licence raj in India-US relations |
As we approach the 20th anniversary of the US-India civilian nuclear agreement, it is worth reflecting on both the progress made and continuing challenges to India’s navigation of US export controls. A major rationale for the 2005 nuclear agreement was to enable India to access strategic technologies from the US and its allies. Further reducing or harmonising export controls remains crucial both for strategic cooperation and for US and Indian businesses working in a variety of sensitive sectors — defence, aerospace, semiconductors, quantum, space, and chemical and biotechnologies — that generally require an export licence from a relevant government agency.
At face value, tremendous progress has been made in India’s ability to access leading-edge technologies. Since the 1970s, India was at the receiving end of discriminatory US export controls on account of its nuclear weapon programme and close defence relationship with the Soviet Union. Despite a bilateral high technology arrangement being initiated in the 1980s, India’s nuclear weapon programme and 1998 tests resulted in US sanctions. The US took various measures against India that included suspending defence sales, denying the Indian government credit and loans, and denying visas for Indian scientists. By the late 1990s, about a quarter of US exports to India by value required a licence.
Following the removal of most sanctions by 2000, when then US president Bill Clinton visited India, the George W Bush administration began a gradual process to further dilute barriers, increase strategic trade, and remove Indian entities from restrictive lists, through an initiative known as Next Steps in Strategic Partnership (NSSP). This was not altruistic on the part of the US, because it required reciprocal steps on the Indian side, integrated India into international export control regimes, and facilitated access to the Indian market. The 2005 civilian nuclear agreement turbocharged this process, resulting in 2008 in US legislation that exempted India’s nuclear programme (called the Hyde Act) and a waiver for India by the Nuclear Suppliers Group........