Menon

Washington, Feb. 24: Foreign secretary Shiv Shankar Menon is returning home with a big prize after three days of intense talks with the Americans: major changes in the regime that controls sensitive exports to India.

At a 45-minute breakfast meeting with US deputy secretary of commerce David Sampson here on Thursday before the opening of the plenary meeting of the Indo-US High Technology Cooperation Group (HTCG), Menon secured two significant commitments from the Bush administration.

First, Indian companies with a good record of compliance with non-proliferation requirements can import advanced technology products from the US for civilian use without the usually required licences.

Two, processing time for high-technology exports to India which still require licences will be in line with America’s closest allies — Israel and the UK.

These two commitments, once fully operational, will bury a 23-year-old nightmare that still haunts Indian technocrats in authority who are part of the country’s quest for advanced technology: a refusal by the US in 1984 to sell even a Cray computer for the Indian Institute of Science in Bangalore.

Menon’s breakfast discussions with Sampson and the HTCG plenary enabled the US commerce secretary, Carlos Gutierrez, 90 minutes later to tell the captains of Indian industry, who were here with the foreign secretary: “In a few months our Trusted Customer programme for high-tech exports to India should be up and running.… For some controlled dual-use high-tech products, no export licences will be required.”

The changes, however, come with a price, as usual, a price that may not be palatable to the Manmohan Singh government’s Left allies.

India must open its markets further and forge ahead with a reform agenda.

Gutierrez held out what amounted to a carefully-worded warning that US investment in India may dry up unless this was done.

He told Indian entrepreneurs gathered at the US-India Business Council as part of the HTCG meetings: “Every country in the world is competing for capital. And capital will go to those markets that welcome investment.”

Stressing that he was being honest and frank, Gutierrez insisted the two countries should work together on the Doha round of global trade talks in the World Trade Organisation. He couched this demand in polite terms. “Simply put, India’s leadership is required to achieve an agreement.”

But the commitments secured by Menon enabled US assistant secretary of commerce Christopher Padilla to work out the nitty-gritty of the new arrangements at a “strategic trade session” of the HTCG yesterday morning and then wrap up the deal between the foreign secretary and US acting under-secretary for commerce, Mark Foulon, over lunch.

Some of the new high-technology trade arrangements finalised yesterday have been languishing for almost a year although President George W. Bush promised changes during his talks with Prime Minister Manmohan Singh in New Delhi last year.

An announcement in New Delhi by the director-general of foreign trade on Wednesday banning the “direct or indirect” export of all items that could contribute to Iran’s nuclear programme helped.

Last night, the US under-secretary of state for political affairs Nicholas Burns was on domestic television, holding up the Indian ban as an example of Washington’s diplomatic success in getting the international community to support its actions against Tehran.