India in US's STA-1 List - Import of Dual-use Tech

Why in news?

After 1½ years of negotiations, the US has eased controls on high-technology dual-use exports to India.
The US has granted India exemption under the Strategic Trade Authorisation-1 list.

How has India-US defence ties evolved?

India signed the civil nuclear deal with the United States in 2008.
A key objective was to gain access to high technology.
Notably, India had been denied access, especially from the 1970s through the 90s.
Towards the end of Obama’s presidentship, the US recognised India as a “Major Defence Partner”.
It committed itself to sharing technology to the same level as its closest allies and partners.
It also agreed to collaboration for defence co-production and co-development.

Why is the delay then?

The US either has military alliances such as the NATO or bilateral defence treaties with other countries.
Hence, the status of Major Defence Partner is unique to India.
So Indian and American negotiators had to draw up the framework of what the status would entail.
Given this, the export of defence and dual-use technology by the US is mostly a “political determination”.
This is driven by two factors namely US national security and the recipient’s regional stability.
Dual-use exports refer to an item or technology that can be put to both military and civilian use.

What is the recent move?

India was in STA-2 list (Strategic Trade Authorisation-2), along with 7 other countries.
These include Albania, Hong Kong, Israel, Malta, Singapore, South Africa, and Taiwan.
India has now been elevated to the STA-1 list of countries.

What is Strategic Trade Authorisation?

In 2009, Obama announced a comprehensive review of the US export control system.
As part of this came the concept of Strategic Trade Authorisation (STA).
This is a move towards a licence-free or license exemption regime.
Accordingly, two lists were created namely STA-1 and STA-2.
STA-1 and STA-2 established a hierarchy among those the US was willing to certify as “good countries”.
STA-1 - STA-1 countries are America’s most trusted allies.
The STA-1 list has 36 countries including NATO allies and bilateral treaty allies like Japan, South Korea, and Australia.
The US considers the non-proliferation controls of these countries the best in the world.
These are also among those that are part of the four multilateral export control regimes:

STA-1 countries have licence-free access to almost 90% of dual-use technology.
They are also eligible to import items for reasons of national security, chemical or biological weapons, etc.
This is irrespective of whether the technology or item impacts regional stability or American national security.
STA-2 - Countries in the STA-2 list enjoy some form of licensing exemption.
But they cannot access dual-use items/technology that may impact regional stability, or contribute to nuclear non-proliferation, etc.
Others - A vast majority of countries remain outside both STA-1 and STA-2.
They cannot access high technology from the US without specific licences.
They have to apply for a licence for every item on the Commerce Control List (of dual-use items).

What is the significance?

China, Pakistan, and Russia are on neither list.
Albania is a NATO member, but is still in STA-2, and Israel, a major US ally, is not in STA-1.
Given these, India joining an elite group of allies of the US is a significant move.
India is now part of STA-1, despite not being member of all four multilateral export control regimes.
This is thus another testament to India's non-proliferation credentials.
India can now access 90% of defence technology and equipment for dual-use supplied by US government and its defence industry.
It is expected to lead to greater high-technology trade and commerce.
For Indian high-tech industry, this could open up doors for both sales and manufacturing in India.
Third countries can also set up manufacturing units, requiring import of dual-use equipment from the US, without the license process.

Source: Indian Express