Saturday, March 25, 2023
HomeOpinionModi and Trump have to tango despite Chinese noise on NSG

Modi and Trump have to tango despite Chinese noise on NSG

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India and the US can’t allow China to hold them hostage in taking their defence partnership and trade in dual use technologies to the next level.

India and the US are at the cusp of a big political moment that could fundamentally alter strategic equations in Asia, provided Washington can bend some of its arms export regulations to call out China for the benefit of India.

While the US has been granting exemptions to India every now and then on trade of dual use items, this is the first time that India has come so close to entering the Tier 1 category of the US Strategic Trade Authorisation (STA) system under the American Export Administration Regime.

What this essentially means is that if India were to move into this category, it would enjoy the same benefits extended only to America’s closest allies.

In real terms, Indian entities will not need licences to trade in 90 per cent of the items on exports controls lists. It’s then that both countries will be able to build major cutting edge defence facilities that require trade of large scale dual use items.

So, what’s the China concern? It’s actually in the form of an infringement. By blocking India’s entry to the Nuclear Suppliers Group (NSG), Beijing has effectively stalled the closure of an India-US roadmap to get New Delhi to trade like NATO allies with the US on sensitive items.

The roadmap was pretty straightforward. India would first have to join all the four major arms control regimes – Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement and the Australia Group – to be able to make it to the Tier 1 category.

The logic: Membership of each group would mean India has met their tough standards and aligned its internal guidelines accordingly. Thus, each step in this direction inspired confidence in the US to gradually open up trade of sensitive items with India.

India, for its part, did the needful but wanted to start by first securing NSG membership. This was because of a view in the previous government that India must not join the other three regimes without ensuring that Washington had delivered the NSG membership first. China latched on to this predicament and blocked India at the NSG.

As a result, not much moved until the Modi government took the call that it was prepared to move on membership of the other regimes, where China isn’t a member, as long as the US would correspondingly ease its licensing regime for India on some items as a show of good faith.

A good example of how this worked was reflected in the US decision to offer the unarmed Sea Guardian drones to India. This became possible after India’s entry into the MTCR. Now, India is negotiating to get the weaponised version of this drone, which otherwise would have been completely off the table.

The larger understanding on how to elevate India as a major defence partner, however, still remains an open question. And the reason is China, which has held up the Indian application at the NSG.

Last week, India formally joined the Australia Group, which meant New Delhi is now a member of three of the four arms control regimes.

India and the US simply can’t allow China to hold them hostage in taking their defence partnership to the next level. Also, this isn’t just about defence. These are dual use items used in high technology areas across industries.

A Tier 1 entry would mean Indian companies will not have to mandatorily enlist into the End User Verification Programme to obtain licences. They will be able to work in a licence-free environment, accessing the best of the US technology with ease comparable to a Britain, Australia or Japan.

The call is for US President Donald Trump to make, especially after Prime Minister Narendra Modi has kept his side of the bargain and got India to join three of the four regimes.

The pressure on Trump will be considerable from within the system, which would argue that any further exemption to India would wreck the STA regime. And that the better option would be to continue to work on China while treating Indian requirements on a case-by-case basis.

The second line of counter, which some in the Obama Administration used to take, is that it’s not China alone blocking India’s entry at the NSG. This lobby points to some of the Scandinavian countries, Ireland, New Zealand and even Turkey, among others, who have a neutral to negative stand on the Indian application. And given that the NSG goes by consensus and not by vote, each one of these members matter.

Lastly, moving India to Tier 1 would be a strong provocative message to China, the consequences of which will be assessed minutely regardless of all the anti-China rhetoric from Washington.

For India, the US was committed to help it secure membership of the NSG, and is thus quite aware of who is holding up the application. Indian and US diplomats have worked closely enough on this to conclude that other fence-sitter countries were only reflecting their national positions on non-proliferation, and would not hold up the consensus, like China.

On this, Trump will have two precedents before him. One is that of George W. Bush, who in 2008 reached out to his then Chinese counterpart Hu Jintao to get the Chinese delegation, which had walked out of the NSG special plenary, to return to the table and agree to a one-time waiver for India.

When Trump’s predecessor Barack Obama tried something similar to get China to agree on India’s membership, Beijing didn’t oblige. Many interpretations came through – China had changed, American clout had waned, President Xi Jinping wanted to show China is no longer deferential to the US and that blocking India’s rise is in Chinese strategic interest.

President Trump will have to weigh all of these factors and decide whether India should be put in the Tier 1 category, notwithstanding the fact that it is still not a member of NSG.

The truth is India has already aligned its rules and regulations to NSG guidelines, a commitment enshrined in the India-US 123 Agreement on civil nuclear cooperation. The same is also reflected in the Hyde Act. So, bilaterally the US is doubly assured of India’s adherence to NSG norms.

On balance, the time has come for India and the US to take this next big leap in defence cooperation, vital to secure mutual interests in a troubled regional and maritime neighbourhood. The ball, however, is now in Trump’s court.

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  1. At the end of the day, the US is yet to demonstrate it’s commitment to India vis a vis China or Pakistan:

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