The US has made necessary changes in its export control laws that would benefit India by facilitating smoother transfer of technologies and arms to it.
This comes on the back of US recognising India as a ‘Major Defence Partner.’
The new rule “creates a presumption of approval” for Indian companies seeking to import Commerce Department-controlled military items, except Weapons of Mass Destruction-related goods.
This means Indian companies will not be denied licenses except in rarest circumstances.
The new rule also amends the law so that companies will not need a license at all after becoming a Validated End User (VEU).
It also allows Indian companies to not seek US approval for the re-export of platforms that contain less than 25 per cent US content.
“Indian and US companies operating in India can seek VEU status for both civil and military manufacturing, and by doing so not need to obtain individual licenses. This makes it far more convenient to build a global supply chain and react quickly to changing market conditions,” explained Benjamin Schwartz, USIBC’s Director for Defence and Aerospace.
Over 810 licenses representing some $5 billion in trade in the last half decade have been granted for goods covered under this new rule.
Schwartz said the new rule will make business substantially easier for Indian companies in the defence sector, especially those partnering with American companies.