Modi’s tech transfer deals with the US could run up against export controls

The central theme of the US-India Joint Declaration issued at the conclusion of Prime Minister Narendra Modi’s recent state visit to the United States was the “Technology Partnership”.

Around this issue, the two countries signed several agreements on critical technologies, and the United States announced that it would facilitate the “transfer” of these technologies to India in a number of emerging areas.

The agreements signed by the leaders in Washington owe their origin to the initiative on Critical and Emerging Technologies (iCET)an initiative to expand the strategic technological partnership and defense industrial cooperation between the governments, companies and academic institutions of both countries.

The iCET aims to promote inter-institutional technological cooperation in a number of key areas, such as the defense sector, semiconductor supply chains, telecommunications and artificial intelligence.

The most striking of the results of Modi’s visit was the memorandum of understanding between General Electric (GE) and Hindustan Aeronautics Limited (HAL) for the manufacture of GE F414 jet engines in India. This initiative has been projected as one that will enable further transfer of US jet engine technology to India.

The Semiconductor Supply Chain Memorandum of Understanding and the Partnership for Innovation it was signed with the stated objective of coordinating incentive programs for Indian and US semiconductors.

In the past year, both India and the US have focused on improving their domestic semiconductor production capabilities. India adopted the amended plan for the creation of domestic semiconductor wafer manufacturing facilities under the production-linked incentive scheme, while the US enacted CHIPS and Science Act with a commitment to spend $280 billion on R&D and commercialization.

In line with this development, US chipmaker Micron Technology announced that it would invest up to $825 million to build a semiconductor assembly and testing plant in India, taking advantage of fiscal support being provided by the Indian government.

The two countries too launched joint initiatives in the field of telecommunications, and a mainly public-private cooperation in the field of telecommunications began on field tests and deployments of open radio access networks between operators and vendors of both markets, with the financial support of the International Corporation Funding for Development of the United States.

They approved an ambitious vision of 6G networks, which includes cooperation in the critical area of ​​standards, facilitating access to chipsets and establishing joint research and development projects.

And finally, a $2 million grant program was launched under the US-India Endowment Fund for Science and Technology for joint development and the commercialization of artificial intelligence (AI) and quantum technologies, with potential for public-private collaboration to develop high-performance computing facilities in India.

Although this is an impressive list of sectors in which the United States has agreed to “transfer” technologies to India, the key question is to what extent it will honor its commitments. This question arises due to two sets of factors.

The current policy has left India joyless and angry

The first is that historical evidence tells us that the US has not cooperated with India and other developing countries to make critical technologies accessible. One of the low points in this regard was the reluctance of pharmaceutical multinationals to allow developing countries to use the technologies for vaccines and medicines during the COVID-19 pandemic.

This position of the pharmaceutical companies had the effective support of the United States and other advanced countries, especially in the debates within the World Trade Organization. In addition, the access of developing countries to green technologies has been one of the most controversial issues in the negotiations on climate change, the resolution of which does not seem to be in sight.

A second factor is the fact that advanced technologies from US entities are tagged with a number of conditions, especially those stemming from the country’s complex export control regime. These restrictions are placed on exports of strategic products and technologies even to close allies such as Australia and the United Kingdom, with whom the United States has long-standing defense agreements.

Around this issue, the two countries signed several agreements on critical technologies, and the United States announced that it would facilitate the “transfer” of these technologies to India in a number of emerging areas.

In the joint statement, President Biden tacitly admits the restrictions India could face in accessing the promised technology, while indicating that his administration will work with the US Congress to lower barriers to US exports of high-performance computing technology and source code to India. But the larger problems that the US export control regime would impose remain unaddressed.

Before technology export deals to India can come to fruition, they will have to go under the US export control regime. This strict regime covers, on the one hand, exports of dual-use goods and technologies and, on the other, defense articles. The former are subject to the Export Administration Regulations (EAR), while the latter are covered by the Arms Export Control Act of 1976, respectively.

The US maintains export controls to protect its national security interests and further its foreign policy objectives regarding dual-use goods and less-sensitive military items through the EAR.

This regulation establishes the licensing policy for the covered products and related technologies, which are revised by the US government “on a case-by-case basis to determine whether the proposed export or re-export is consistent with the national security and foreign policy interests of the US.”

The EARs cover exports of 10 categories of products and technologies listed on the Trade Control List (CCL), including electronic design development and production, electronics, information technology and telecommunications, and security. of information, areas that figure prominently in the agreements between India and the United States. Detailed procedures are specified for each CCL product category, which alone can act as a formidable deterrent to exporters.

Responsibility for regulating, applying, and enforcing dual-use export controls rests with the Bureau of Industry and Security (BIS), an agency of the US Department of Commerce. The BIS works closely with foreign governments, the industry and trade associations to ensure that exports of dual-use items from the US remain safe and EAR compliant.

Exports of military items listed on the US Ammunition List are regulated by the Arms Export Control Act (AECA) of 1976, which outlines US foreign and domestic policy objectives. in terms of cooperation in defense and control of exports of military items.

The AECA establishes a series of conditions on the uses that can be given to these articles. Establishes that the military items “shall be sold or leased by the Government of the United States…solely for internal security, self-defense” or “to enable the recipient country to participate in regional or collective agreements or actions consistent with the Charter of the United Nations …”.

In addition, as in the case of exports of dual-use items, exports of military items are governed by strict licensing policies set out in the International Traffic in Arms Regulations (ITAR). It is clear that the US administration and Congress exercise considerable control not only over exports of dual-use and military items, but more importantly, they set the conditions for the use of these items in receiving countries.

Two of the US’s closest defense allies, Australia and the UK, have frequently expressed concern about the indiscriminate and extraterritorial application of their regulations. It should be noted that the US had signed defense trade cooperation treaties with these two countries in 2007, and in 2021 a trilateral association, AUKUS, was formed between them. And yet, restrictions on US exports of strategic equipment to its closest partner countries continue without diminishing.

In their recent commentary, William Greenwalt and Tom Corben have succinctly summarized the problems of US export control regimes, which, in your opinionsuffer from two sets of problems.

In the joint statement, President Biden tacitly admits the restrictions India could face in accessing the promised technology

Firstly, “practical issues related to the ineffectiveness of the current set of export control frameworks and processes”, and secondly, the “intangible and conceptual issues, such as the desire to control innovation, as well as… a” “superpower mentality” rooted in a bygone era of strategic and technological dominance…”.

So, can India get hold of critical US technologies and products when Australia and the UK have failed?

Article republished from The Wire as part of an agreement between both parties to share content. Link to the original article:https://thewire.in/security/modi-tech-transfer-deals-may-stumble-on-export-controls

Former Professor at Jawaharlal Nehru University and Distinguished Professor of the Council for Social Development.