New Delhi: In a significant development, India and the US have signed two key agreements–the Security of Supplies Arrangement (SOSA) and a MoU regarding the Assignment of Liaison Officers–which seek to bolster defence ties between the two countries.
SOSA is a key enabling pact, which sources in the defence and security establishment told ThePrint, would allow closer industry cooperation between the US and India.
Meanwhile, the liaison agreement will build on an earlier decision under which India deployed three colonel-level officers to the Hawaii headquartered Indo-Pacific Command (INDOPACOM), the Special Operations Command (SOCOM/USSOCOM) in Florida, and the US-led multinational maritime force, the Combined Maritime Forces (CMF), in Bahrain early this year.
As reported by ThePrint, the US has emerged as the biggest defence importer of India-made subsystems, helping New Delhi achieve its staggering export surge in the last 10 years.
Sources explained that SOSA would give US companies more freedom, and allow them to widen their base in India by manufacturing and sourcing from the country. However, it is not a legally binding agreement.
“The next step will be the signing of the Reciprocal Defence Procurement Agreement (RDP) which will be legally binding,” Pushan Das, Director of Aerospace and Defence at the U.S.-India Business Council, told ThePrint.
SOSA was signed by Vic Ramdass, Principal Deputy Assistant Secretary of Defense for Industrial Base Policy, on behalf of the United States, and Samir Kumar Sinha, Additional Secretary and Director General (Acquisitions) in the Defence Ministry on the sidelines of Defence Minister Rajnath Singh’s ongoing visit by to America.
What is SOSA?
Through SOSA, which the US has signed with 18 other nations including a few non-allies and non-NATO countries, America and India have now agreed to provide reciprocal priority support for goods and services that promote national defence.
SOSA allows the US to request priority delivery for its contracts, subcontracts, or orders from companies in these countries. Similarly, it also permits signatory nations to request priority delivery for their contracts and orders from American firms.
The arrangement will enable both countries to acquire industrial resources they need to resolve unanticipated supply-chain disruptions in the defence sector.
The US will provide India assurances under the US Defense Priorities and Allocations System (DPAS), with programme determination by its Department of Defense (DoD) and rating authorisation by the Department of Commerce (DOC).
India will, in turn, establish a government-industry code of conduct with its industrial base, where Indian firms will voluntarily agree to make every reasonable effort to provide US priority support.
As Das pointed out, all prioritisation will be based on goodwill and not because one is bound by the commitment.
With an expanding global supply chain for its defence ministry, America has said that SOSAs are an important mechanism to strengthen interoperability with US defence trade partners.
The arrangement institutes working groups, establishes communication mechanisms, streamlines DoD processes, and proactively acts to allay anticipated supply-chain issues in peacetime, emergency, and armed conflict.
They are also a useful tool in developing investment strategies to ensure redundancy and security. India is the eighteenth SOSA partner of the US, the others being Australia, Canada, Denmark, Estonia, Finland, Israel, Italy, Japan, Latvia, Lithuania, the Netherlands, Norway, Republic of Korea, Singapore, Spain, Sweden, and the United Kingdom.
What does SOSA mean for Indian companies?
Partner nations who are signatories to SOSA need to have a government-industry code of conduct, whereby firms agree to make every reasonable effort to provide priority support.
Participation in these codes of conduct is voluntary and signifies a company’s reliability in providing defence goods and services to the Department of Defense and its contractors.
DoD programme managers, contractors, and subcontractors acquiring materials and services from participating firms may request priority delivery for their orders when necessary to meet U.S. defence requirements.
What is RDP?
India and the US have been discussing an RDP agreement which will make it binding on companies to prioritise the other and will eventually open up joint production and sourcing on a larger scale.
The US has signed the RDP agreement with 28 qualifying countries which pave the way for rationalisation, standardisation, interchangeability, and interoperability of conventional defence equipment with allies and other friendly governments.
This agreement, the US said, provides a framework for ongoing communication regarding market access and procurement matters that enhance effective defence cooperation.
The agreement also allows American companies to bypass the “Buy American statute”–similar to “Make in India”–entitling firms to set up manufacturing bases and collaboration with signatory countries
(Edited by Tikli Basu)
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