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December 1, 2014

India, US to start discussion on defence technology, production from today


India and the United States will discuss defence technology transfer and joint defence production in Delhi from Monday, in the first major political-military dialogue in the run-up to US President Barack Obama's visit to India as chief guest at Republic Day next month.

Hoping to give a boost to Modi's call to global manufacturers to 'Make in India', the two sides will explore the possibility of joint defence production in critical areas like missiles after the government allowed 49% FDI in this strategic sector.

The US delegation is being led by Indian-American Puneet Talwar, assistant secretary in the US State Department's bureau of political military affairs, officials told ET. An important agreement on defence collaboration is expected to be signed during Obama's trip, they added.

The aim of the dialogue is to have wider discussions on export licensing, defence cooperation and strategic cooperation, and this round will serve as a preparation for a possible defence pact during Obama's visit, officials indicated. The scope of the political-military dialogue was expanded during Modi's US trip in September.

A key element in discussions will be technology transfer that the Modi government is seeking for enabling India to attain self-sufficiency in the long run. The issue of technology transfer will be addressed under the Defence Trade and Technology Initiative or DTTI, which represents US' commitment to build an indigenous Indian industrial base by pre-screening projects for co-production, and eventually, co-development.

There are over 20 items ranging from anti-tank missiles to launch systems for aircraft carriers that the US has offered to India under DTTI. Officials said DTTI needs a fresh push from both sides.

The two countries will set up a task force to quickly evaluate and decide on unique projects and technologies which will have a transformative impact on bilateral defence relations and enhance India's defence industry and military capabilities, officials said.

With defence being one of the key areas of cooperation, the yardstick of long-term India-US cooperation will be FDI in India, transfer of technology, co-production and co-development, a diplomat said. India presents a huge opportunity for global defence equipment manufacturers as it has announced a procurement plan of $100 billion over the next decade.

There is consensus among American policymakers that maintaining stability in Asia requires increased security cooperation with a democracy and emerging economy like India, officials said.

The US defence industry is looking abroad to increase sales at a time when domestic budgets are declining.

The security relationship is one area that offers tremendous promise for India-US relations, an official said, adding that it is an important element of Modi's economic dream.

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