Obama lifts export controls for India: dual use has dual purpose

The world has certainly changed in the past decade or so. Time was when Western dignitaries visiting India were always expected to give various things to India most of which would translate into money. Not any more.

When US President Clinton visited India in 2000, the first US leader to do so in over two decades, the world had already changed greatly. The Soviet Union was no more, the cold war had ended and India had long dropped its begging bowl. The US was looking to change strategic dynamics in the region and beyond, and counter-balance the new rising power China, while Indian governing circles were seeking a breakthrough with the US in the post-Soviet era and vis-à-vis South Asia. Money was not the currency, geo-political considerations were. Soon the US under President Clinton was, for the first time, to openly side with India against Pakistan in the wake of the latter’s Kargil adventurism, and a prolonged broader strategic dialogue ensued. President George W. Bush’s visit to India was heavy with his promise to help India become a great power on the broad shoulders of the US. To cement a “strategic  partnership” with India, Bush was to break through the seemingly impenetrable barriers of US non-proliferation orthodoxy and shook up the global nuclear architecture, having secured Indian strategic concordance and an unprecedented  defence agreement with the US.

President Obama’s visit to India has continued this trend and taken it a step further. But there have been some significant departures as well. For one, the US did not have a great deal to offer strategically except a few incremental steps beyond those already taken, and that much sought after endorsement of Indian permanent membership of the UN Security Council, itself an idea whose time has come and which was destined to become reality before too long. For another, a substantial portion of the visit did indeed revolve around money, but from India to the US! Yet there is more continuity than change, and both tell us a good deal about the unfolding US-India relationship.

US military sales Reeling under the massive reverses suffered by the Democrats in the US Congressional elections on the eve of Obama’s trip to India, attributed largely to the poor state of the US economy especially high unemployment there, the US President understandably stressed the economic deliverables of his visit. $10 billion to the US and 53,000 American jobs were claimed as direct outcomes. But given the economic woes in the US, President Obama had been harping on the theme of opening up markets, especially in India and elsewhere in Asia, for several months and has in fact continued harping on this theme as he has continued his Asian tour in Indonesia and South Korea. When the first leg of Obama’s visit in Mumbai was dominated by what seemed to be purely commercial dealings, and the US President was keeping his geo-political cards close to his chest, it was widely speculated that what India was seeing was Obama the salesman rather than Obama the statesman. But were the two really that different?
The defence purchases announced during the visit had actually been struck much earlier. A deal for India acquiring 10 C-17 Globemaster III heavy-lift transporters at a cost of $4 billion, with the possibility of acquiring a few more later,  was announced even though the US Congress was notified about it a few months ago. Similarly, the sale of over 100 General Electric GE-414 engines for India’s Light Combat Aircraft (LCA) at around $800 million was agreed to in September. It was important for President Obama to announce these deals in Mumbai so as to boost the sense of what the visit had achieved.

Other deals in the pipeline and which were not announced were those for the acquisition of 197 Light Utility Helicopters, which was postponed by India earlier to facilitate participation of US firms in the tender, and those for some artillery systems, missiles and so on. These deals come on the back of India having acquired from the US 8 (later increased to 12) P8-I maritime reconnaissance and anti-submarine aircraft from Boeing at over $2 billion and Hercules C130J transporters for over $1 billion. India’s decision on the “mother of all defence deals”, the acquisition of 126 Medium Multi-Role Combat Aircraft (MMRCA) at over $10 billion is not expected for several months yet.
President Obama is clearly under pressure to secure these military deals. He desperately wants to show the US domestic audience good sales and creation of jobs in the US. Not surprising given the political atmosphere he faces back home, and the other salesmen following him to India soon in the form of high-powered delegations from major competitors in military hardware France and Russia, all bidding for a share in the huge Indian pie of defence acquisitions expected to amount to $50-80 billion over the next five years.

On the Indian side though, the moot question is whether India has driven a hard bargain to extract what it wants from President Obama and the US, or has India just played good boy and signed away billions of dollars for a few brownie points?

Strategic terms One heard a lot about the equipment and their monetary value but little about the nitty-gritty involved, especially the important inter-governmental agreements that usually go along with such US military sales and in which their strategic implications really lie.

All the defence deals struck by India with the US are through the government-to-government Foreign Military Sales (FMS) route. The US has been pushing India hard to sign three major Defence Agreements which the US regards as “foundational” agreements essential for allies who seek to acquire military hardware under FMS. With these allies usually coming under US defence protection, and often under its nuclear umbrella as well, the US expects full adherence to numerous conditions that together bind the buyer into a subordinate and dependent relationship. The Agreements ensure that the US retains full control over the use, deployment and maintenance of this military hardware, even to the extent of compelling buyers to acquire spares only from the US and to refrain from making any modifications to the equipment as local conditions may require.

The Logistics Support Agreement (LSA) would bring India into a set of US allies that use each others’ military facilities and equipment, and pay for the same through long- term arrangements. It takes little imagination to deduce that this is meant chiefly to facilitate US use of Indian facilities and that the LSA virtually amounts to a military alliance. CISMOA or the Communications, Inter-operability and Security Memorandum of Agreement would, apart from promoting the ability to operate each others’ military hardware in joint operations, also ensure US control over communications software and sensitive equipment that can be sold only under CISMOA conditionalities. The US is linking India signing CISMOA to sales of some military hardware or components, and also to the lifting of some Indian defence-related agencies from its “entities list.” against whom sanctions were imposed following Pokhran-II. The third of these is the BECA or Basic Exchange and Cooperation Agreement. The End-Use Monitoring Agreement is overarching, but more about this later.

It is well known that the Indian armed forces have been staunchly opposing India signing such Agreements and have resisted attempts by the political leadership and the bureaucracy to give in to US pressure arguing, like the US, that the agreements are routine and innocuous. They are nothing of the kind. Ministers and civil servants routinely deny that they have signed an End-Use Agreement but concede that they have “agreed on language” concerning end-use of US-origin military hardware which is referred to in the contract relating to each deal. And no-one knows what this language is! The Air Force Chief and current Chairman of the Chiefs of Staff Committee P.V.Naik even went public with his opposition a few months back. Official US documents, with crucial portions blackened out as confidential, available on the internet, testify that the US is intent on securing Indian concurrence on these Agreements. Indeed, it may already have done so as far as End-Use Monitoring goes, even if in a roundabout way.

The Joint Statement issued after the Obama visit reaffirming the US-India global strategic partnership in fact pointedly refers to some hitherto secret letters exchanged between the two Governments in 2004. It also refers to the End-Use Visit Agreement concluded earlier and signed between US of State Hilary Clinton and India’s External Affairs Minister, which specifically relates to the on-site monitoring of US military hardware by US officials including some posted in the US Embassy in New Delhi. India appears to have gotten away so far without signing CISMOA and the LSA but is already on the hook on end-use monitoring.

How long can this continue? One of the high points of the Obama visit was the US declaration that it is ending restrictions on US export of high-tech dual-use items. But the more India seeks to acquire such items, the more the US will press India to sign these Agreements.

The noose tightens The growing Indian acquisition of US military hardware thus takes India further into the US circle of “allies” who ultimately find themselves with little space for sovereign manoeuvre. The removal of the Indian “entities” such as the four DRDO subsidiaries and several ISRO sub-agencies is a self-serving move by the US. While appearing to remove hurdles on India acquiring high-tech dual-use items, it actually serves a dual purpose of the US. It opens the door for US exports of military hardware which India could otherwise have acquired, and simultaneously ties India up into various long-term binding defence agreements that restrict its strategic space. US State Department, Commerce Department and White House official notes and policy papers written up prior to the Obama visit make it clear that the “dual use” export controls are being removed not as any correction of past US mistakes or as an act of great friendship but for commercial and strategic interests of the US.

Bush’s vision of the US-India partnership may have been dominated by the strategic and military, with the commercial aspects as a useful by-product. President Obama, facing a domestic recession, has fallen back on that old American staple, the military industrial complex. Obama’s vision of the US partnership with India may resound with the rhetorical flourishes of his famous oratory, but his main take away from the visit will be the commercial tie-ups with India that also binds India closer into the US strategic embrace, converting an American necessity into a virtue. And India is getting more firmly entangled in the US strategic web.