‘Sensitivities over tech transfer will persist for some time to come’ | Mint - Mint

NEW DELHI : Former diplomat and current US-India Business Council (USIBC) chief, Atul Keshap, emphasized the importance of India-US defence cooperation and the need for joint efforts to develop a defence industrial base in India.

Keshap, who was the top American diplomat in India in 2020, identified advanced technologies and cybersecurity as target areas for cooperation between the two nations. Additionally, emerging initiatives such as INDUS-X, which seek to boost collaboration among startups, will be a key focus, he said. Keshap emphasized the need for smoother procurement processes and increased predictability on the part of the Indian government while acknowledging that sensitivities over technology transfer, which remains a key Indian demand that America has struggled to meet, will persist for some time to come. Edited excerpts:

What is your view on Prime Minister Narendra Modi’s visit to the US and the defence deals that came out of it?

I was born in 1971, which was arguably the worst year of US-India relations for a lot of reasons. As a young child, I’d go to India, and I’d see my cousins and my parent’s friends, and I’d hear their conversations. And the US was viewed in a very negative way by Indians, which surprised me. In the 1990s, when I embarked on my career in diplomacy at a time when US-India relations were not as antagonistic as they were in the ’70s and ’80s. But they weren’t exactly friendly. And then, there were the nuclear tests in 1998, which resulted in a real crisis in US-India relations. However, there was a complete about-face starting in 2000 with the visit by Bill Clinton in 2000. George Bush and Manmohan Singh decided to cut through all of this legacy build-up of negative feelings with the nuclear deal. I would say that the nuclear deal unleashed the potential of our relationship. However, we still had a lot of past issues that we were working through. From the nuclear deal era right up until very recently, there was still a lot of legacy churn. I feel like what’s important about this visit by Prime Minister Modi is that both governments basically said, “We’re going to put the past in the past, and we are now going to focus on the future".

How does the defence relationship move forward from here?

I’ll speak from my perspective as a representative of business. What I want to see is private sector to private sector tie-ups that can really unleash a volume of trade between the US and India on defence and actually see something like real co-production. So we’re already seeing a little bit of it with Tata and Lockheed Martin and other OEM (original equipment manufacturer) tie-ups, but let’s intensify that. You go to India, and you meet people at trade shows who are making fairly sophisticated defence products. And if those can be integrated into a more globalized supply chain, if they can be built to a standard where all of the free countries of the world could procure that, then can you imagine India and the US becoming the two great sorts of arsenals of democracy and supplying for the entire world? One thing we’ve learned from this Russia-Ukraine war is the speed of production, like in World War II, is really important if you’re going to have a long conflict. US defence factories are ramping up to levels they haven’t seen since the Vietnam War because of the war in Ukraine. Now, imagine that India could do the same thing and do it not just for India but for the entire world. So, I think initiatives like INDUS-X could allow Indian companies to collaborate with American companies with many decades of experience in providing a global platform. The pandemic has taught us that over-reliance on any one geography is risky and that you need to have a resilient and reliable supply chain now. I do believe in Fortress America, and I think it’s great that we’re ramping up our defence production as a result of what has happened in Mr Putin’s misadventure in Ukraine. But it’s not enough solely for us to do that. We have a whole network, a whole constellation of countries that rely on us. And my view is that given the pandemic and given the cost of all of these things, and the rising apprehensions, we should ensure that we have as many of these supply chains as possible. It ought to be in countries that are reliable, stable, growing, capable and resilient. And India tops that list, in my view.

How will platforms like INDUS-X develop? Are there any key focus areas?

Within the focus area of the two governments, it’s clear that a few things are being signalled. No. 1 is cybersecurity, which is very important because we’ve had intrusions by hostile powers. Outer space and remote sensing are also important, but defence is a very broad rubric. And neither government has really articulated the focus very clearly. I think they’re trying to see where the private sector will find the greatest commercial and comparative advantage. But it could be in many different areas. There are bleeding-edge technologies like artificial intelligence, quantum computing and quantum encryption which are critically important.

Are there any changes that US defence firms are looking for in India’s defence policy ecosystem?

So, over the years, India has made quite a few steps to try to liberalize the investment climate for American defence companies to make in India, and those are welcome steps. The Indian procurement process is as complicated as the American procurement process. I would urge both countries to consider ways to streamline that slimmed it down. But I recognize these are very sensitive national security decisions. Both governments can create an environment where companies can compete for a need that the governments have articulated, make a quick decision, and then be able to move on. I also think that it’s good to have clear expectations in both directions about what the companies need to do that the government wants. I think our companies would want to make sure that whatever is being sought from the government clearly reflects the full costs of the entire platform today and over the life of its use, you know, today, tomorrow, 10 years, 30 years. I would say streamlining a lot of the investment rules is another priority. You know, there was a long era where there was talk about the offsets and how complicated that was for American companies to figure out how to do that within the Indian system. I think there’s been a lot of progress on moving through that.

There are also questions about whether America will be willing to transfer key defence technology to India. There are also concerns about technology regimes like ITAR, which could slow the flow of defence technology.

I spent 28 years in the US government, and you have to look at it from the perspective of the people who are the guardians of US technology. We have stakeholders from the state department, defence department and commerce department who come together to take a look at the defence industrial base and determine where we can take risks that are net-net good for the American people. I’ve told friends in India that we are entering a new era of confidence and trust in US-India relations, and the Biden administration has put a lot of signalling, through iCET and INDUS-X, into pushing the defence relationship to the next level. But this is where India can help us. If you look at the charts of Chinese-deployed air force platforms and the US ones, you can tell that in the last 30 years, they have copied jet for jet everything that we’ve done. They’ve acquired that technology in ways that are frankly unacceptable. So, if you’re a guardian of American defence advantage, you’re going to think long and hard about who you give this technology to, even if it’s India, which is a friend and a trusted partner. You’re not worried about India. You’re worried about whoever steals technology through human or technological means and might take it out of your pocket. This is where India can help us by ensuring that it has the systems for surveillance and protection of that technology and inspection of computer systems. This will allow you to protect technology as robustly as we do. If you can, and you do demonstrate that, then it will give greater confidence to the people who make technology transfer decisions.