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India gets special status with United States

India has become first NON NATO nation that the current United States Administration has granted the strategic trade authorization status STA-1 which changes the country’s placement in US Export Control Regime. 

US Commerce Secretary Wilbur L Ross made the announcement in Washington on July 30th during the start of the first-ever Indo-Pacific Business Forum when he said that the Trump administration has granted to India strategic trade authorization status STA-1.

Currently 36 countries, mostly all NATO nations have this status which is an elevated status from an export control point of view he said.
 

This is seen as a timely announcement since it comes ahead of the 2 Plus 2 dialogue between the two countries scheduled during the first week of September when US Secretary of State Mike Pompeo and Defense Secretary James Mattis are due to visit New Delhi to meet their counterparts Ms Sushma Swaraj and Ms Nirmala Sitaraman. 

"And that's a very important change in India’s status under our export control regime. It acknowledges the US-India security and economic relationship. What it does is it comes under the Export Administration Rules, and it authorizes the export, re export and in-country transfer of specific items to destinations that the US regards as low risk," Mr Ross said.

Describing the rationale of the US decision Mr Ross said this is because India has partnered with US to improve its own export control regimes, and has met most of the multilateral export rules that we think are useful. It finally reflects India's status as a major defense partner of the US," said the commerce secretary.

Ross said STA-1 provides India greater supply chain efficiency, both for defense and for other high-tech products, that will increase activity with US systems, the interoperability of the systems, and it will reduce time and resources needed to get licensing approved.

"We calculate that it will be a competitive advantage for the US, in terms of supplying those kinds of products to India. It looks as though over the last seven years, some $9.7 billion of products would have been affected, so it's a meaningful-sized number. And probably, it'll be much more than that because a lot of things they knew wouldn't be exportable, they didn't order from us," Ross said.

Later in a statement issued by the US Department of Commerce, Ross said this new designation reflects India's membership in three of the four multilateral export control regimes, as well the development of its national export control system.

US companies will be able to more efficiently export a much wider range of products to Indian high technology and military customers. India's new status will benefit US manufacturers while continuing to protect its national security, he asserted.

STA Tier 1 treatment, comparable to NATO allies, will expand the scope of exports subject to the Export Administration Regulations (EAR) that can be made to India without individual licenses. This regulatory change will enhance the bilateral defence trade relationship and result in a greater volume of US exports to India.
 

Later in the day, the White House said that the Department of Commerce granting Strategic Trade Authorisation Tier 1 status to India would enable American companies to export more high-technology items under a streamlined license exception. 

 The Trump administration's decision to place India in the Strategic Trade Authorisation-1 list of countries, that eases export of high-tech items, acknowledges the security as well as economic relationship between the two largest democracies of the world, and boosts the defense partnership in a big way, India's top diplomat said here on July 30th.

"It is a sign of trust not only in the relationship but also on India's capabilities an economy and as security partner, because it also presupposes that India has the multilateral export control regime in place, which would allow the transfer of more sensitive defence technologies and dual use technologies to India and without the risk of any proliferation," Indian Ambassador to the US, Navtej Singh Sarna, told a Washington audience soon after US Commerce Secretary Wilbur Ross designated India as an STA-1 country.

"This is an acknowledgement of the security as well as the economic relationship between India and the United States. This is a logical step of India being designated as a major defence partner,.

The top Indian diplomat was responding to a question from Nisha Desai Biswal, president of US India Business Council, during a panel discussion at the first Indo-Pacific Business Forum organised by the US Chambers of Commerce.

 

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