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US eases export controls for high-tech product sales to India

The granting of STA-1 status to India comes after the US recognised India as a “Major Defence Partner” in 2016, a designation that allows India to buy more advanced and sensitive technologies from America at par with that of the US’ closest allies and partners, and ensures enduring cooperation into the future.

“We have granted to India Strategic Trade Authorization STA-1,” US Commerce Secretary Wilbur Ross announced, adding that this is “a very important change” in India’s status in the export control regime.

Responding to a question at the first Indo-Pacific Business Forum organised by the US Chambers of Commerce, Ross said the STA-1 designation “acknowledges” the India-US security and economic relationship.

The designation authorises the export, re-export and transfer (in-country) of specified items on the Commerce Control List (CCL) to destinations posing a low risk of unauthorised or impermissible uses.

Currently there are 36 countries on STA-1 list. India is the only South Asian country to be on the list. Other Asian countries designated as STA-1 are Japan and South Korea.

Till recently India was designated as STA-2 countries along with seven others.

Ross said that India has partnered with the US to improve its own export control regimes and has met most of the export control rules which the US thinks is useful.

STA-1 status, Ross said, provides India with greater supply chain conditions for defence and other high-tech products. It increases the integrity with the US systems and reduces time and resources needed to get licenses approved, the Commerce Secretary said.

According to the Department of Commerce, items that are eligible for export to STA1 destinations or nationals include items that are subject to control for: national security (NS), chemical or biological weapons (CB), nuclear nonproliferation (NP), regional stability (RS), crime control (CC) and significant items (SI).

Experts believe that looking at current exports from the US to India, 50 per cent of those eligible does not require a license under STA-1. This can free USD 2.1 billion in trade, make US exporters more competitive in the global marketplace, help provide India more advanced US technology.

“This is a significant step. This is an important thing that I’m glad has happened, Ben Schwartz of US India Business Council said after the announcement by Ross.

The move would help in the integration of the defence industry, he added. “This is a recognition that the US government put real trust in the Indian government in a way that hasn’t been the case before,” he said.

Over the past few years, Schwartz said India has basically build robust export control procedures that the US government is competent in terms of their security and the fact that when things are exported there they’ll remain controlled and not be diverted to alternative users.