US, India to renew defence agreement - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Saturday 9 August 2014

US, India to renew defence agreement

By Ajai Shukla
Business Standard, 9th Aug 14

New Delhi and Washington will negotiate a new defence framework to replace the current agreement, negotiated in 2005, which will expire next year.

The ministry of defence (MoD) announced on Friday that visiting US Defence Secretary, Chuck Hagel, and India’s defence minister, Arun Jaitley, had “decided to take steps for the extension of the New Framework for the United States – India defence relationship, well before it expires in July 2015.”

In delegation talks today between the MoD and the Pentagon delegation, the two sides agreed to take forward the Defence Technology and Trade Initiative (DTTI), a high-level body established in 2012 to ensure that bureaucratic red tape was not allowed to stand in the way of the broader strategic relationship.

The DTTI was rendered directionless after the recent retirement of the heads from both sides --- US Deputy Secretary of Defence, Ashton Carter resigned in November, while India’s National Security Advisor Shiv Shankar Menon stepped down in May when the new government was formed.

The MoD today announced the new leadership of the DTTI, stating that “The contact person from the Indian side will be the Secretary, Department of Defence Production and the United States will be represented by the Under Secretary for Acquisition, Technology and Licensing at the Pentagon.”

The US had already named Frank Kendall, the Under Secretary of Defence (ATL) as their representative to the DTTI. New Delhi has still to name a new
secretary of the department of defence production, a post that is currently vacant.

Washington has sought to catalyse the US-India defence partnership through the DTTI, by offering proposals like co-producing the Javelin anti-tank missile in India, and co-developing a next-generation version of the Javelin. The MoD is evaluating the Javelin proposal.

The Indian side stressed its wish for US high technology in defence R&D and manufacture. The Indian defence minister stated, “The development of our own indigenous capabilities is a major objective that guides our present policies. In this direction, we have taken steps to raise the FDI (foreign direct investment) cap in the defence sector. We look forward to work closely with the US in this regard”.

On Thursday, the government had raised the permissible FDI cap in defence from 26 to 49 per cent.

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