U.S. Plans to Modify Dual-Use Rules & Entity List for India, Announces Trade Measures

U.S. Agrees to Export Control Reform Plan for India

The U.S. agreed to implement the following four-part export control reform program with respect to India:

Removal of entities from Commerce list. The U.S. agreed to remove all civil space and defense-related entities¹ from the Commerce Department’s “Entity List.” Inclusion on this list generally triggers an export license requirement for items that otherwise do not require an export license. The removal of these entities is expected to facilitate trade and cooperation in civil space and defense and allow more focus on other barriers.

Reform of U.S. dual-use rules. The U.S. will also “realign” India’s status in its dual-use export control regulations by removing if from categories that connote India as a “country of concern.” Although current dual-use export controls affect only a small fraction of U.S.-India trade (less than 1%), the perception of onerous U.S. export controls remains a barrier to high technology trade. In return, India will harmonize its national control list with the multilateral regimes and incorporate re-export controls on certain U.S.-origin items to address the potential transshipment of these items.

Indian multilateral regime membership. U.S. announced its intent to support India’s full membership in the four multilateral export control regimes -- the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group, and the Wassenaar Arrangement - in a phased manner, and to consult with regime members to encourage the evolution of regime membership criteria, consistent with maintaining the core principles of these regimes. India agreed to take steps towards the full adoption of the regimes’ export control requirements to reflect its prospective membership, with both processes moving forward together.

Expanded export-control cooperation. The U.S. and India committed to a strengthened and expanded dialogue on export control issues, through fora such as the U.S.-India High Technology Cooperation Group, on aspects of capacity building, sharing of best practices, and outreach with industry.

Agree to Improve Food Safety, Reduce Agricultural Trade Barriers

Prime Minister Singh and President Obama also agreed to work together to develop, test, and replicate transformative technologies to extend food security in India as part of an “Evergreen Revolution.”

Among other things, this effort involves collaboration to foster an improved food value chain, reduced losses and an Indian food processing industry by focusing on: (1) marketing, cold chain logistics, and sharing of market knowledge by introducing Indian private entrepreneurs and public sector officials to U.S. best practices, standards and technologies in cold chain infrastructure; (2) technology transfer, such as in packaging or water recycling; and (3) programs to improve quality, safety, and professional certification.

The U.S. and India will also continue an ongoing bilateral dialogue on agricultural trade issues in the Trade Policy Forum Agricultural Focus Group to address policies that remove or reduce barriers to agricultural trade and investment.

Will Encourage Clean Infrastructure Investment, U.S. Green Goods/Services

The U.S. also pledged to spur private sector investment in clean energy infrastructure in India through the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (Ex-Im). OPIC is providing $100 million in financing for the $300 million Global Environment Fund South Asia Energy Fund, which will invest in solar, wind, hydropower, advanced biofuels and natural gas projects predominantly in India. Ex-Im will also provide financial support for the purchase of U.S. goods and services to be used in the development of renewable energy and natural gas projects in India.

¹The entities to be removed are:

• Bharat Dynamics Ltd. (BDL)
• The four remaining subordinates of the Defense Research and Development Organization (DRDO): (1) Armament Research and Development Establishment (ARDE); (2) Defense Research and Development Lab (DRDL); (3) Missile Research and Development Complex; and (4) Solid State Physics Laboratory
• The four remaining subordinates of the Indian Space Research Organization (ISRO): (1) Liquid Propulsion Systems Center; (2) Solid Propellant Space Booster Plant (SPROB), (3) Sriharikota Space Center (SHAR), and (4) Vikram Sarabhai Space Center (VSSC).

(See multiple fact sheets on other issues such as counterterrorism cooperation, civil space cooperation, cybersecurity, CEO forum, defense cooperation, education, etc.)

(See ITT’s Online Archives or 11/09/10 news, 10110920, for BP summary on the availability of fact sheets, a joint statement, etc. from the President’s India trip.

See ITT’s Online Archives or 11/08/10 news, 10110813 and 10110816, for BP summaries of U.S.-India trade deals and upcoming trade mission as part of the trip.)