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THE recent visit to India by United States Secretary of State Condoleezza Rice took relations between the two countries to a qualitatively different plane from what was sought to be achieved through the mechanisms of the High Technology Cooperation Group (HTCG) and the Next Steps in Strategic Partnership (NSSP), initiated in 2002 and 2004 respectively. These had been set in motion in November 2001 by the former Prime Minister Atal Bihari Vajpayee and U.S. President George W. Bush in their bid to expand high-tech trade, civil space and nuclear cooperation, and the dialogue on missile defence.
At a media briefing on March 25, U.S. State Department officials said that in the current judgment of the Bush administration, "the NSSP is not broad enough for the kind of things needed to take this relationship where it needed to go". The new Bush-Condoleezza Rice framework, according to one of the officials, attempts to achieve "a decisively broader strategic partnership". Condoleezza Rice is supposed to have outlined this to the Indian authorities, particularly Prime Minister Manmohan Singh. Its goal, apparently, is "to help India become a major world power in the 21st century". The official added: "We understand fully the implications of that statement, including military." From an Indian perspective, the import of this and the broader strategic implications of the package that Condoleezza Rice unveiled are not quite clear.
A key guiding principle of the Bush-Vajpayee agreement was that such strategic partnership would be consistent with U.S. domestic laws and national security and foreign policy objectives, including compliance with international commitments. Kenneth Juster, U.S. Under Secretary of Commerce and the chief architect of the NSSP, said: "The NSSP... responds to India's desire for increased access to U.S. technology for peaceful purposes... in a manner that is consistent with U.S. nonproliferation laws and obligations, and does not contribute to India's programmes for nuclear weapons and their means of delivery."
One interpretation of this apparent paradigm shift in its engagement with India is that the U S. sees the NSSP-led approach to be limiting in achieving its objective in the region, whatever that may be. The State Department official said: "The future of this region is simply vital to the future of the U.S." And, as is evident from the U.S. opposition to the gas pipeline from Iran to India, Bush would not like to see Iran - part of the "axis of evil" in the U.S.' perception - have any role in determining the region's future. Condoleezza Rice's counter-offer of cooperation in all matters concerning energy, including nuclear, is an indication of Bush's disapproval of India's friendly ties with Iran. That is, if energy is a critical issue in India's economic development, the U.S. is prepared to step in with attractive terms. Condoleezza Rice's package thus included, besides strategic and economic components, an "energy dialogue" component as well.
Although the exact contours of the dialogue on energy are yet to emerge, broadly, the offer includes "civil, nuclear and nuclear safety issues". The key component is the one on nuclear issues. Following the Indian nuclear test in 1974, the U.S. ended all cooperation on the nuclear front with India, as required under its Nuclear Non-Proliferation Act (NNA), 1978. If there is an expression of real intent to cooperate now, it is an indication of a rethink in the Bush administration on its nuclear policy towards India - the nuclear tests in 1998 and the consequent nuclear sanctions notwithstanding - that denial regimes of more than 30 years have not really served U.S. interests in the region.
In this context, it is interesting to note what the State Department official said in response to a question whether the U.S. was recognising India and Pakistan as de facto nuclear states. "I don't want to comment on the formal diplomatic recognition... . At the point you start setting off nuclear weapons, a certain amount of de facto recognition occurs," he said. Only the Nuclear Non-Proliferation Treaty (NPT), of which India is not a signatory, bestows de jure status by defining a nuclear weapon state, but in an unrealistic and time-frozen manner. "They tested nearly seven years ago. The U.S. has to live in the world that exists, not the world that we might imagine or we wish for. And in the world that exists, these extraordinarily important countries have nuclear weapons," the official added.
But realising this policy rethink in concrete terms, such as an offer of nuclear power plants, will not be an easy proposition. As the move would call for changes in domestic legislation, it depends on how much of Bush's perception on the issue is shared by the U.S. Congress. Then there are the guidelines of the 44-member Nuclear Suppliers Group (NSG). These require imposition of full-scope safeguards (FSS) of the International Atomic Energy Agency (IAEA) on all current and future peaceful nuclear activities of a non-nuclear-weapon state (NNWS) for transfer of items on the NSG's Trigger List, which includes equipment, material and technology related to nuclear fuel cycle-related activities. The question is how the U.S. can get around this stipulation if it wants to assist the Indian nuclear power programme.
In principle, this can be done if there is a reciprocal move from India. Having accorded it de facto nuclear weapon state status - which would allow a distinction between peaceful and militarily significant Indian nuclear activities - the U.S. can try to convince other NSG members of the need to re-interpret the guideline, which requires FSS only on peaceful activities. France and Russia, which are also keen to enter the Indian nuclear sector, are for such a re-interpretation.
However, given the recent evidence of U.S. inflexibility on the nuclear front as part of the NSSP (Frontline, October 22, 2004), though substantive easing of export controls was possible without violating domestic laws or NSG guidelines, it is not clear how serious the Bush-Condoleezza Rice package is. It must be noted that there is no mention of "nuclear reactors" in the package. But even if the U.S. does make the necessary moves, both domestically and within the NSG, it would require India to place all its civilian nuclear facilities under safeguards, something that is feasible but requires some hard-headed thinking on the part of India.
The "strategic" component of the package is meant to include regional security issues, expanding high-tech cooperation under the HTCG, export of dual-use goods and, more significantly, India's defence requirements, including defence co-production. The last part came into sharp focus when, shortly after Condoleezza Rice's visit, Bush informed Manmohan Singh of his administration's decision to sell F-16 fighter aircraft to Pakistan under the U.S. Department of Defence's Foreign Military Sales (FMS) activity. Indian concerns, as voiced by the Prime Minister, were quickly annulled with an equally, if not more, alluring offer to India that included not just F-16s but the more advanced F-18s and their co-production.
Indian opposition to the U.S. offer to Pakistan is somewhat misplaced because the Indian acquisition of Sukhoi aircraft from Russia, coupled with Pakistan's aborted F-16 deals since 1990, has already caused an imbalance in air power. Moreover, recent joint India-U.S. exercises have demonstrated the superiority of Sukhois over F-16s. In any case, it is only at the stage of an offer, with even the formal notification of the offer to Congress yet to take place. Hence details of the numbers or the kind of F-16s that Pakistan may buy are not available. The purchase is not being financed by the U.S. as part of its military assistance programme. At $25-$30 million a piece, the required number (stated to be around 50) will be a huge financial burden on Pakistan.
The offer to India is made in response to the Indian Air Force (IAF) chief's statement about the requirement of 126 next-generation multi-role combat aircraft for which four types, including F-16s, would be considered. Washington has said that the U.S. manufacturers would bid for the proposed purchase and it would work with the companies. Under the Bush-Condoleezza Rice initiative, the offer is apparently in the form of 18 fly-away F-18s and the rest co-produced under licence by India. Indeed, the offer of co-production of F-18s outside the U.S. is stated to be the first ever. Whether India should fall for this bait is a moot point because at about $100 million a piece (compared to about $40 million for a Sukhoi) the amount required is huge. Or will it settle for F-16 co-production? Interestingly, Pakistan has been offered neither F-18s nor any kind of co-production arrangement.
The State Department official said: "But beyond that the U.S. is ready to discuss even more fundamental issues of defence transformation with India, including such areas as command and control, early warning and missile defence." India has already increased its defence equipment purchases from the U.S. During 2002-03, India's purchase of 12 counter-battery radar sets or "Firefinder" radars, costing about $190 million, was cleared. India is also due to buy counter-terrorism equipment worth $29 million for its special forces. In July 2004, the U.S. cleared the sale of aircraft self-protection systems worth about $40-million to be mounted on Boeing 737s that carry the Indian head of state. The State Department has authorised Israel to sell the jointly developed U.S.-Israeli Phalcon airborne early warning system.
The Indian services have an extensive shopping list of U.S.-made defence equipment, including P-3C Orion maritime patrol aircraft, C-130J transport aircraft, PAC-3 anti-missile system, the Israeli-built sophisticated Arrow anti-missile system (whose export is controlled by U.S. veto because of its involvement in its development), electronic warfare systems and sophisticated electronic ground sensors to check insurgency. Except for the PAC-3 and Arrow anti-missile systems, the rest have been recently approved for export. While the State Department is opposed to the sale of anti-missile systems, particularly Arrow, the Defence Department apparently supports their export to countries cooperating with the U.S. on missile defence. Missile defence is one of the quartet of issues being discussed under the NSSP umbrella.
NOTWITHSTANDING all these moves, the naming of Pakistan as a "major non-NATO ally" (MNNA) by Bush in June 2004 has led to the perception that in the U.S.' bilateral relations with the two countries, the balance is tilted in favour of Pakistan. However, closer investigation reveals that this is not so. Barring the area of export of communication satellite (COMSAT) systems and components, India and Pakistan are almost on a par in their standing. In fact, a careful reading of U.S. documents shows that India is actually in a better position; only that India has not taken advantage of this.
A country can be named an MNNA under Section 517 of the U.S. Foreign Assistance Act (FAA) of 1961. Being on a par with a North Atlantic Treaty Organisation (NATO) country, the advantage that an MNNA enjoys is in terms of easy export of munitions under the International Trade in Arms Regulations Act (ITAR). Since Indian import of U.S. munitions is not very high, this does not matter much. But it gives Pakistan an edge over India for COMSAT exports.
Two years before Pakistan was declared an MNNA, the U.S. designated India a Friendly Foreign Country (FFC). But the Indian government seemed to have been unaware of it. The naming of Pakistan an MNNA led to the discovery of India's status as an FFC. Two years were lost out of ignorance. However, even after knowing it, India has failed to take advantage of the status. FFCs can participate in cooperative project agreements with the U.S. under U.S. Code 10 USC 2350a (f)(2) and Section 27(j)(1) of the Arms Export Control Act (AECA).
Under the former, besides NATO countries, MNNAs and FFCs can enter into agreements with the U.S. for cooperative defence research and development (R&D) projects on a cost-sharing basis. However, for cooperative R&D projects under AECA, NATO countries and FFCs alone are eligible "if the President determines that the cooperative project agreement with such a country would be in the foreign policy or national security interests of the U.S.". The key difference between the scopes under the two mechanisms is that the latter allows for co-production of items jointly developed under an R&D project (This does not imply co-production of F-16s or F-18s as these were not developed jointly).
Interestingly, not all NATO countries and MNNAs are identified for cooperative R&D, and the set of countries under the two laws are different. In the communication transmitted by the U.S. Defence Secretary to various Congressional Committees in 2003, 11 countries were notified to be eligible for cooperative agreements under the first law and 17 countries under the AECA. India is included in both the sets, but not Pakistan.
The differing U.S. perception about the two countries in this regard can be gauged from the following operative statement: "The U.S. is likely to enter into a cooperative agreement with [these countries]; and, they possess the industrial or technological means to cooperate meaningfully with the U.S. in defence research, development, test and/or evaluation programmes." However, according to informed sources, despite overtures from the U.S., India has so far failed to identify areas where it would like to enter into joint defence R&D and come up with proposals that could interest the U.S. as well.
As regards increased access to dual-use goods under the NSSP initiative, there is a marginal increase in the number of approved licences. The increase is significant in terms of value too. Data for fiscal 2004 indicate that EAR99 items (low-end items that normally do not require licences but which are needed for sanctioned entities) continue to account for a fairly large share (over 30 per cent) of licensed items. Perhaps this is because a large number of such items are imported by entities that continue to be on the list, even after the pruning in September 2004. In this context, further easing of restrictions on space, defence and atomic organisations on the entities list is desirable.
The other major items include electronic devices and components, oscilloscopes, chemicals and propellants. The large number of these would seem to indicate growing interest of private telecommunications and electronics industries in these items. Interestingly, after the pruning of the Entities List and the relaxing of sanctions in October 2001, there has been no further relaxing of sanctions in the case of Pakistan. Currently, the number of Pakistani entities are more than Indian entities.
A significant difference, however, relates to the export of COMSAT systems, components and relevant technical data, which are governed by the ITAR. Special export controls are required for the export of such items to countries that are not NATO members or MNNAs. However, the licence exemption for NATO members or MNNAs is only for specifically identified space programmes. So, though Pakistan is in a privileged position in this regard, it has no ongoing space programme that can take advantage of the exemption (Frontline, July 30, 2004). In fact, for the India-Malaysia space collaboration agreement of December 2004, a Technical Assistance Agreement (TAA) was issued under the ITAR in September 2002 for sharing data of the Boeing-built Malay communication satellite MEASAT with Antrix Corporation of the Indian Space Research Organisation (ISRO). The India-U.S. strategic dialogue should find ways around COMSAT controls, particularly for projects such as the ISRO-Boeing satellite project to fructify. The establishment of an Indo-U.S. working group is intended to facilitate that.
Clearly, it is the U.S.' perception about Indian capability that drives its desire for a strategic alliance with India. Pakistan, on the other hand, is more dependent on the U.S. for direct economic assistance than technological assistance, despite being an MNNA. Any significant forward movement would require India to identify proactively opportunity areas just as much as India wants the U.S. to ease controls on access to technology. Of course, a response to the Bush-Condoleezza Rice offer needs careful evaluation of the various issues of sovereignty, security, strategy and foreign policy, besides gains in technology and high-tech goods.
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