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US Wants to Knock Down Bureaucratic Barriers In Defence Ties With India

Discussion in 'International Relations' started by Averageamerican, Jul 25, 2012.

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  1. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    US Deputy Secretary of Defence Dr Ashton B Carter has made it clear that Obama administration considers India a key part of its strategy to re-balance its strategic focus to Asia and that it wants to remove barriers and impediments that may come in the way, even as he pitched for India hiking its foreign direct investment (FDI) limit in Defence sector apart from tweaking its offsets policy to make economic and strategic sense.

    "Our partnership with India is a key part of our re-balance to the Asia-Pacific region, and, we believe, to the broader security and prosperity of the 21st century," Carter said at an interactive session on "US-India Defence Cooperation: The Way Forward" organised by the Confederation of Indian Industry here during his three-day visit.

    "We want to knock down any remaining bureaucratic barriers in our defense relationship, and strip away the impediments. And we want to set big goals to achieve," he said, adding "if India raises its FDI ceiling to international standards, it would increase commercial incentives to invest."

    India currently stipulates only 26 per cent FDI in Defence sector, but allows up to 49 per cent FDI in certain cases, with the government promising to look into the upper limit of 49 per cent on a case-to-case basis.

    As a second area for change from within India, Carter suggested that if Defence offsets are calibrated correctly, it works. But if offset requirements are too onerous or too narrow, they deter a company’s interest, he said.

    "For companies to participate, our arrangements must make good economic sense as well as good strategic sense," he added.

    Carter was recently appointed by US Defense Secretary Leon Panetta as the point man for US-India Defence trade.

    India was the second largest Foreign Military Sales (FMS) customer of the US in 2011 and had total FMS sales of $4.5 billion. Already, the India-US Defence trade in the last decade has touched $10 billion, which also includes Direct Commercial Sales (DCS).

    India has in recent years bought the USS Trenton, a landing pontoon dock and renamed it INS Jalashwa, apart from buying 10 C-17 heavy lift transport planes, six C-130J special forces cargo planes, eight P-8I maritime patrol and anti-submarine planes, as also readying to place orders for 145 M777 ultra-light howitzers from the BAE Systems stable produced in the US.

    Carter noted that India-US military-to-military engagement increased steadily over the years to include a robust set of dialogues, exercises, Defence trade, and research cooperation.

    He said the shared challenge for the two countries in the next era would be to find concrete areas to step up Defence cooperation so that only imagination and strategic logic, and not administrative barriers, set the pace.

    "We need to reinvigorate and commit to maintain a robust set of linkages and working groups that will work every day to enable our cooperation and develop mutual beneficial policies for the future," he said.

    Noting that India deserved the best military equipment available, the US official said: "We are prepared to help. Practically, we want to be India's highest-quality and most trusted long-term supplier of technology, in such fields as maritime domain awareness, counter-terrorism, and many others.

    "We are committed to India's military modernisation. India is a top priority in our export considerations. We trust India and know India is not a re-exporter or exploiter of our technologies."

    Referring to the US' export control system to prevent high-end technology from getting to states that shouldn't have it, Carter admitted that the system could be "confusing, rigid, and controls too many items for the wrong reasons".

    "We know we need to improve it. We are improving our government's overall export control system," he said, noting that India has been very frank in expressing its concerns with US export controls and technology security policies.

    "We are taking real steps to address India's concerns," he said, pointing out that US had moved Defence Research and Development Organisation (DRDO) and Indian Space Research Organisation (ISRO) off the American commerce department's Entity List.

    "We can conduct research and co-develop technologies together – like batteries, and micro-UAVs – good initial steps, with much more to come. And an overwhelming and increasing majority of munitions license requests have been approved quickly under direct commercial sales, and this will continue," he added.

    Carter also noted that US was now fast tracking priority Defence sales by anticipating what its allies may want, apart from improving its foreign military sales and direct commercial sales system of military supplies.

    "In a great new initiative, we are building exportability into our systems from the start so it doesn’t consume time and money to do it later. Next, we are putting priority sales on a special fast track. All these steps should be felt here in New Delhi. The combination of these and other efforts will help us respond more rapidly to India’s requests for US equipment and systems – particularly for more advanced technologies," he said.




    Claiming that US Defence technology is the best quality on the market, he noted that though some partners choose price over value, buying American, whether through DCS or FMS, will get India exceptionally high-quality technology, a high degree of transparency, and no corruption, which, according to him, is mandated by the US legal system.

    Carter also assured India that US was making its acquisition process more "export-friendly" under which they have new fund that allows procuring long-lead, high demand items so they are on hand in anticipation of partner requests.

    "We now have a cadre of acquisition experts to send to other countries to define their requests for sales and streamline our response. They should help India significantly," he added.

    Finally, and most importantly, Carter said, US wants to move beyond Defence trade and towards cooperative research and development and co-production with India.

    The US official, during the day, also met Defence Minister AK Antony, National Security Adviser Shivshankar Menon, Defence Secretary Shashi Kant Sharma and Foreign Secretary Ranjan Mathai.
     
  2. vstol jockey

    vstol jockey Colonel MILITARY STRATEGIST

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    Claiming that US Defence technology is the best quality on the market, he noted that though some partners choose price over value, buying American, whether through DCS or FMS, will get India exceptionally high-quality technology, a high degree of transparency, and no corruption, which, according to him, is mandated by the US legal system.

    Thats the reason why americans are not getting very many more deals.
     
  3. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    I agree with you there, but I also would not build a plant in a country where I did not have control....if that FDI means.

    Right now US investment is India is about 16 billion a year in China its 66 billion a year.
     
  4. Sinchan

    Sinchan Lieutenant FULL MEMBER

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    well in this country you will never have control,you will only have con(trrol).lol
     
  5. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    There are plenty of other places.
     
  6. Sinchan

    Sinchan Lieutenant FULL MEMBER

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    and the example is..?
     
  7. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    China 66 Billion last year rather then 16 billion in India.
    Foreign direct investment in India fell more than 31 percent, to $24 billion, in 2010 even as investors flocked to developing nations as a group.

    Why do you think people are avoiding investing in India when they are invest more in the rest of the worlds developing countries.
     
    Last edited: Jul 25, 2012
  8. Devil

    Devil Captain SENIOR MEMBER

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    but i thought you did not want chinese and russians getting it now you want to go to china
     
  9. Sinchan

    Sinchan Lieutenant FULL MEMBER

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    hey did you saw the name of thread.?
     
  10. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    NEW DELHI: The iconic $ 31-billion Scandinavian home products giant, IKEA, has put on hold its plans to set up 25 showrooms across the country for an investment of around $ 1 billion. In an internal communication this week, IKEA told its stakeholders that Indian investment rules do not encourage it to go ahead with its investment plans — at least not in the near future.
     
  11. Sinchan

    Sinchan Lieutenant FULL MEMBER

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    well they want to, but they don't have majority in this matter.now the elected president is from congress party so probably now the reforms will back on track.
     
  12. layman

    layman Aurignacian STAR MEMBER

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    Reforms will back on Track ?…. Well they don’t seem to yet. Hope they get it back on track at the earliest.

    Mods please combine the threads as already same thread is existing...
     
  13. Himanshu Pandey

    Himanshu Pandey Don't get mad, get even. STAR MEMBER

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    So a thread on Indo-us defence ties goes to FDI and then economy.... can't we just stick with topic
     
  14. Sinchan

    Sinchan Lieutenant FULL MEMBER

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    ask it to'averageamerican' and he will say ' yes we can'(t):eek:bama
     
  15. Himanshu Pandey

    Himanshu Pandey Don't get mad, get even. STAR MEMBER

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    AA.. no I can't.. I had my argument with him last day... and today I am on rest... some threads went all away from there topic because of my debate with AA... don't want that to happen with this thread
     
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