U.S.-India Business Council Applauds U.S. Amending Export Administration Regulations to Support U.S.-India Defense Manufacturing Partnerships

USIBC strongly supports the Commerce Department’s regulatory reforms recognizing and implementing India’s status as a “Major Defense Partner” of the United States

February 2, 2017 – Washington, D.C. - The U.S.-India Business Council hosted Deputy Assistant Secretary of Commerce Matt Borman on February 2nd to discuss an important change to U.S. export control law that will significantly facilitate business for Indian defense companies working with Americans and Indian offset partners of U.S. companies. In pursuance of India’s designation as a “Major Defense Partner” by both the U.S. Congress and the President of the United States, the U.S. Department of Commerce successfully submitted an amendment to U.S. export control laws that came into effect on January 19th.

The new rule (82 FR 6218-6221) creates a presumption of approval for Indian companies seeking to import Commerce Department controlled military items (excepting Weapons of Mass Destruction related goods) and amends the Validated End User (VEU) authorization for India by which Indian and U.S. companies operating in India can seek VEU status for both civil and military end uses, exempting those companies from obtaining individual validated licenses. Additionally, under the new regulation, Indian companies will not be required by U.S. law to seek approval for the re-export of platforms that contain less than 25% U.S. content. “This is a very favorable policy for Indian companies. The rule will make business substantially easier for Indian companies in the defense sector, especially those partnering with American companies. This gives Indian companies and U.S. companies operating in India the ability to be reactive in real time to meet their supply chain needs,” says Benjamin Schwartz, USIBC’s Director for Defense and Aerospace. Over 810 licenses representing some $5 billion in trade in the last half decade have been granted for goods covered under this new rule. Most of these licenses being focused on aerospace systems and ground vehicles.

“I’m pleased to see India’s status as a ‘Major Defense Partner’ – a designation that we have strongly supported – be translated into tangible regulatory reform,” notes Dr. Mukesh Aghi, President of USBIC. USIBC encourages U.S. and Indian companies currently operating or involved in co-production and co-development projects in India to apply for Validated End User authorization.

About the U.S.- India Business Council:
Formed in 1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council is the premier business advocacy organization, comprised of 350 top-tier U.S. and Indian companies advancing U.S.-India commercial ties. USIBC is the largest bilateral trade association in the United States, with liaison presence in New York, Silicon Valley, and New Delhi.

Contact: Ben Schwartz at beschwartz@usibc.com

Press Release