Most people, including foreign affairs commentators, could be excused if they were taken aback by US National Security Advisor Jake Sullivan’s declaration that the US was taking steps to remove regulations preventing civil nuclear cooperation with India. The announcement came last week during his visit to New Delhi on the eve of Donald Trump’s swearing-in ceremony as the next president of the United States.
Most of us would have thought that restrictions on India-US nuclear trade would have been removed through the Indo-US nuclear agreement of 2008. But it transpires that entities like Bhabha Atomic Research Centre (BARC), Indira Gandhi Atomic Research Centre, and the Indian Rare Earths Ltd, all government run institutions, remain under sanctions related to India’s nuclear programme.
The step is, of course, welcome but it tells us a great deal about the manner in which the US guards its technology estate. A key aspect of this is the labyrinthine bureaucratic web that is woven around it with some half-a-dozen different departments looking after various aspects of the issue. Some caveat is therefore needed by those who think that the Indo-US technology cooperation regime is now on a fast track.
Take the agreement for manufacturing the General Electric (GE) F414 jet engine which was termed as being part of a “revolutionary” partnership between India and the US by US Secretary of Defense Lloyd Austin in 2023. The deal, which has received approval from the US Congress, promises an 80% transfer of technology relating to an engine which powers frontline US fighters.
But the devil, as they say, is in the details and already wrangles over technology transfer have delayed the final signing of the agreement. Reports say that GE would not provide technologies for advanced coatings for the hot section of the engine which play a key role in its performance and durability. Neither would India get technology for making crystal blades which enhance the engine performance and efficiency.
In the denial list will be the technology related to laser drilling used for precision manufacture. Certain proprietary manufacturing techniques may also be withheld as would the engine control system, the key algorithms and systems that manage the engine. In essence, India will not be able to produce the engine independently or modify it.
As it is, the deal came after the 2016 red herring in which India was declared a “Major Defense Partner” by the Barack Obama administration. This was never clearly defined or operationalised. It transpired that unlike that other designation “Major Non-NATO Ally,” which covers Pakistan, it had no legal standing or privileges.
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All US technology transfer arrangements relating to defence must be cleared by the International Traffic in Arms Regulations (ITAR) regime, managed by the State Department. Compliance with ITAR requires a license from the State Department to export the specific materials. India may have signed the US-led Missile Technology Control Regime (MTCR) and the Wassenaar Arrangement, but it must eventually cross the ITAR hurdle to access certain military technologies.
Since 2023, India and US have undertaken a bilateral Initiative on Critical and Emerging Technologies (iCET) aimed at enhancing their “strategic technology partnership and defense industrial cooperation” that involves not just governments, but academia and businesses as well.
Last year, New Delhi signed the Security of Supply Agreement (SOSA) with Washington but negotiations are still on to sign the Reciprocal Defence Procurement (RDP) Agreement. SOSA enables a priority delivery of defense supplies. The RDP is essentially a waiver of US laws that otherwise restrict the federal government from procuring goods from non-domestic sources. This could provide big opportunities for Indian companies to become ancillary producers for the US industry.
The payoffs of these agreements and initiatives are in the future. One major problem is that India’s ambitions of becoming a world-class technology power with the help of the United States runs well ahead of its current capabilities. Manufacturing in India has simply not taken off, despite the Production Linked Incentive (PLI) scheme.
Actually, all these agreements, and India’s own weaknesses in the industrial sector, will not bring India at par with the key US partners in terms of accessing American technology. That is because at present there is no path towards making India a part of the US National Technology Industrial Base (NTIB), a legal category under US laws in which alliance countries like Canada, UK, Australia and New Zealand are in a special category when it comes to supplying US military products, conducting advanced R&D and systems development to keep the US ahead in the technology race.
Note that these four countries are also members of the US Five Eyes intelligence alliance. Even countries like Israel, Japan and South Korea are not part of the NTIB. For the present, India has to navigate what Sullivan once said in another context, the US technology domain which is characterised by “a small yard and a high fence.”
There is therefore a limit to which the US system can accommodate India. India-US relations in the technology front may have taken significant strides in the last two decades, but from Washington’s point of view, it remains a step-by-step process.
Manoj Joshi is a distinguished fellow, Observer Research Foundation, New Delhi.
This piece was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been updated and republished here. To subscribe to The India Cable, click here.
