Barack Obama's visit: Technology transfer to be the key focus of Indo-US defence pact
The two sides have been focusing on this aspect to defence partnership since Narendra Modi assumed office as prime minister.
By Dipanjan Roy Chaudhury, ET Bureau | Updated:
NEW DELHI: Narendra Modi’s ‘Make in India’ initiative will be key aspect of 10-year-old defence pact that will be renewed during President Barack Obama’s forthcoming visit to India. Renewal of the 10-year defence pact will be the least controversial of all key deliverables from the presidential trip.
The new element in the pact will be the focus on defence technology transfer from the US to India and joint development & co-production of defence items in India, official sources told ET. The two sides have been focusing on this aspect to defence partnership since Narendra Modi assumed office as prime minister. However, sources hinted that this is easier said than done.
The US prefers over and above 49% FDI in defence. Without a near majority stake, US may not share state of the art defence technology. Besides, the focus of pact will be on strengthening joint exercises & sharing of global perspectives on conflict zones. Last Monday, Defence Minister Manohar Parrikar told a TV channel that the strengthening of existing framework and enhancement of scope was going to be “definitely beneficial” for India.
“This (the signing of the agreement) is one of the possibilities... These are issues which are in the horizon,” Parrikar told a news channel. During Prime Minister Narendra Modi's visit to the US last September, both countries had agreed in principle to extend their defence agreement for another 10 years, which will take forward the cooperation between the two in the crucial area. The framework agreement, which expires this year, was signed in the US in 2005by Defence Minister Pranab Mukherjee and his US counterpart Donald Rumsfeld.
The new element in the pact will be the focus on defence technology transfer from the US to India and joint development & co-production of defence items in India, official sources told ET. The two sides have been focusing on this aspect to defence partnership since Narendra Modi assumed office as prime minister. However, sources hinted that this is easier said than done.
The US prefers over and above 49% FDI in defence. Without a near majority stake, US may not share state of the art defence technology. Besides, the focus of pact will be on strengthening joint exercises & sharing of global perspectives on conflict zones. Last Monday, Defence Minister Manohar Parrikar told a TV channel that the strengthening of existing framework and enhancement of scope was going to be “definitely beneficial” for India.
“This (the signing of the agreement) is one of the possibilities... These are issues which are in the horizon,” Parrikar told a news channel. During Prime Minister Narendra Modi's visit to the US last September, both countries had agreed in principle to extend their defence agreement for another 10 years, which will take forward the cooperation between the two in the crucial area. The framework agreement, which expires this year, was signed in the US in 2005by Defence Minister Pranab Mukherjee and his US counterpart Donald Rumsfeld.
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Washington wants forward movement on Nuclear Liability Law that would enable GE and Westinghouse to enter Indian market and make the civil nuclear deal of 2008 operational.
India too is keen to break the logjam and is working on a model that will have a pool of insurance companies giving guarantees to reactor suppliers besides diluting the provision in the law that makes the supplier liable in case of an accident.
A similar arrangement was also reached with the Russian side whose nuclear fi rms are, however, state-run. GoI thinks such an arrangement will also encourage Indian private players to get into manufacturing reactors
India too is keen to break the logjam and is working on a model that will have a pool of insurance companies giving guarantees to reactor suppliers besides diluting the provision in the law that makes the supplier liable in case of an accident.
A similar arrangement was also reached with the Russian side whose nuclear fi rms are, however, state-run. GoI thinks such an arrangement will also encourage Indian private players to get into manufacturing reactors
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