EUVA (end user verification agreement) with the US

Discussion in 'Defence & Strategic Issues' started by thakur_ritesh, Jul 22, 2009.

  1. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    India, US agree on end user monitoring pact

    fullstory

    STAFF WRITER 22:38 HRS IST, PTI

    New Delhi, Jul 20 (PTI) India and US today said they have finally reached an understanding on the End-User Verification Agreement (EUVA), which gives rights to Washington experts to inspect hi-tech military hardware sold to New Delhi.

    "We have shown progress also by finalising important agreements today including the end user agreement that will pave the way for greater defence cooperation between our countries," US Secretary of State Hillary Clinton told a joint press conference with Indian External Affairs Minister S M Krishna here this evening.

    In his remarks, Krishna said the two countries have agreed on EUVA that would henceforth be referred to in the letters of acceptance in procurement of defence equipment and technologies.

    Once signed, the generic EUVA would be applicable to all future defence equipment purchases that India would make from the US.

    ----------------------------------

    End user agreement: Fresh ammo for BJP to attack govt

    End user agreement: Fresh ammo for BJP to attack govt - India - NEWS - The Times of India

    TNN 22 July 2009, 04:22am IST

    NEW DELHI: BJP which was on the backfoot since its Lok Sabha defeat has swiftly latched on to faltering foreign policy issues flung its way by the UPA government over the last 10 days.

    On Tuesday, it went on the offensive on the End-Use Monitoring Agreement (EUMA) with the US, which generated heat both in Parliament and outside, accusing the government of surrendering its sovereignty. It has also listed three other major areas on which India has given in to either the US or Pakistan — allowing Balochistan to be included in the joint statement with Pakistan, delinking terror from the composite dialogue process with Pakistan and the concessions India made to the US on climate change.

    By his own admission, party's Leader of Opposition in Rajya Sabha, Arun Jaitley, on Tuesday said that it usually takes some months after the elections for government to come under scrutiny but this time it has taken just a few weeks. "With 206 seats in Lok Sabha, Congress and the government seem to feel that they can do whatever they like," Jaitley said, while addressing a party gathering at the Delhi BJP office.

    Raising the issue both in Rajya Sabha and at the party function, he cited the EUMA, Balochistan, delinking terror from the composite dialogue with Pakistan and climate change where India has negated the basic red lines that it had earlier decided never to go below.

    In Lok Sabha too, the EUMA issue was first raised by BJP MP Yashwant Sinha and later dealt with by Leader of Opposition L K Advani.

    Interestingly, BJP found itself leading the band of protestors in both Houses which included all parties outside of the ruling UPA and even some which are part of the combine.

    Samajwadi Party also chose this issue to signal its growing distance from the Congress. While party chief Mulayam Singh Yadav asked in the Lok Sabha on Monday why the government had gone back on its earlier position in the joint statement with Pakistan and agreed to delink terror from the composite dialogue process, on Tuesday he told the House, "Parliament is a mirror to the nation and the public wants to know why India has succumbed to the US. This (EUMA) is a move against the nation's interest."

    --------------------------

    UPA hiding details of the deal with US: Oppn

    Govt draws flak over end-user agreement

    Govt draws flak over end-user agreement

    New Delhi, DH News Service:

    More than 24 hours after announcing the finalisation of the end user monitoring agreement (EUMA) with the USA for military purchase, the Centre has not disclosed the terms and conditions of the contentious pact in the Parliament.



    This prompted the opposition to put the government on the mat in both Houses.

    While Defence Minister A K Antony and South Block officials refused to comment on the EUMA, a statement made by the External Affairs Minister S M Krishna in the Parliament did not say whether India will allow on-site physical verification of US-origin weapon platforms and if US can dictate terms on where to deploy these military platforms.

    Krishna said EUMA systemised the ad hoc arrangements made for individual defence procurements from the USA entered into by previous governments.

    The response did not satisfy BJP and the Left parties who staged a walk-out in both Houses marking their protests.

    In the last seven years India signed at least five EUMA with the USA on a case- by-case basis beginning with the NDA government’s decision to purchase 12 ANTPQ weapon locating radar made by Raytheon in 2002. In the subsequent years, New Delhi bought critical technologies like landing platform dock USS Trenton, three VIP jets from Boeing with self-protection suits, six 130J heavy lift Hercules transport aircraft from Lockheed Martin and eight P8I Poseidon maritime reconnaissance aircraft from Boeing in 2009. In each case, there was an EUMA. The first four come under the department of defence’s Golden Sentry EUMA programme applicable for government-to-government direct foreign military sale.

    The Poseidon deal fits under the department of state’s Blue Lantern class of EUMA involving direct commercial sales.

    Originating from the Arms Export Control Act, both EUMA come with stringent conditions that may lead to a shift in the foreign policy of the buyer nation. Giving India’s past experience with the USA, a large section of Indian political class is not comfortable with EUMA, which may lead to that foreign policy shift in future.

    The EUMA conditions also include prior US permission to laterally transfer equipment to another service – from Army to the Navy or Border Security Force for example – and opening up the military base to foreign inspectors.

    It entails snap inspection on the basis of what the USA believes are “credible reports” (typically intelligence inputs) on the alleged misuse of a platform and constant endeavour on the part of the buying nation to show it is worthy of the US trust.

    In the Lok Sabha BJP leader Yashwant Sinha wanted to know if military equipment from a third country having US equipment would also be subject to the EUMA.

    Demanding more clarification on the controversial agreement, which UPA-I could not sign due to the Left pressure, BJP, Left, SP, JD(U) and even UPA ally RJD accused the government for subjugating India’s sovereign interests to the USA.

    South Block sources said the initial draft to have an umbrella-type EUMA instead of individual contracts was drafted by the ministry of defence. It appears significant changes were incorporated in the text subsequently. Krishna and secretary of state Hillary Clinton did not sign the pact. But the formal announcement means the text has been frozen and it will be signed at a later stage.
     
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  3. Sridhar

    Sridhar House keeper Moderator

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    End-user verification pact with U.S. likely K.V. Prasad The agreement is needed for important defence purchases This will avoid fresh negotiations and signing of documents each time
    India wants bare minimum requirements for purchases
    NEW DELHI: Amid growing strategic relations between India and the U.S. and increasing procurement, the Defence Ministry is on the verge of finalising a common End User Verification Agreement, instead of negotiating a stand-alone document that Washington wants New Delhi to sign each time before allowing sale of key military components to tri-services.
    The Ministry now awaits the taking over of charge by A.K. Antony to proceed with the contours of an agreement that allows verification by the U.S. of some highly sensitive technology that its sells to other countries.
    The agreement is currently needed for acquisitions such as the Long Range Maritime Reconnaissance Aircraft for the Indian Navy and other defence procurement.
    Ready for discussion Just a day before results of the 15th Lok Sabha were declared, two officials of the Ministry travelled to Washington to discuss the draft agreement, sources in the Ministry told The Hindu. The officials came back with a document that is to be placed on the Minister’s desk for discussion.
    The sources said efforts were on to prepare a document that could be cleared by the government, which can then be appended to any procurement agreement instead of negotiating it afresh each time a purchase is made.
    Foreign inspectors Aware that the issue of foreign inspectors on Indian sites is sensitive and evokes strong reaction, especially the Left parties, the Ministry is keen to ensure that the requirement under U.S. laws is kept to the bare minimum.
    For instance, the sources said when India brought business jets for VVIP travel it included special components such as anti-missile defence technology, which as per the agreement comes under the verification clause.
    In this case, instead of permitting Americans to visit Indian bases where these jets were positioned, New Delhi suggested that the equipment could be taken off these jets and be made available for inspection in the Capital. This done both parties went home satisfied of having kept to their end of the agreement, the sources said.
    As per the U.S. laws, all foreign military sales are guided by the Golden Sentry programme that is governed by its Department of Defence while the Blue Lantern programme is governed by the Department of State.
    This is to ensure that the product sold to a country is being used for the stated purpose.



    The Hindu : National : End-user verification pact with U.S. likely





    India, US may settle end user verification agreement
    [​IMG] 06 June 2009

    New Delhi: The visit next week to New Delhi by America's undersecretary of state for political affairs William Burns is going to be critical not just for setting the agenda for future bilateral relationship for both countries, but also for resolving some ticklish issues related to defence cooperation. An ''End User Verification Agreement'' (EUVA), central to all sensitive defence deals between the two countries, has been hanging fire for a long time and it is expected that it may now be resolved to the satisfaction of both countries.
    So far, both countries have negotiating separate agreements for procurements.
    [​IMG] P-8I PoseidonApart from EUVA, the US is also keen that India clear agreements such as the Communication Interoperability and Security Memorandum of Agreement (CISMOA) and the Logistics Support Agreement (LSA).
    As far as EUVA is concerned both nations have exchanged drafts on three occasions, and the text is now being prepared for final clearance during the 10-13 June visit William Burns, who as undersecretary of state for political affairs is the highest ranking career officer in the state department.

    The EUVA is a particularly ticklish issue for both countries as American law demands that such an agreement be in place before any supply of sensitive defence equipment to another country should take place. The provisions of the agreement, as they stand, are not acceptable to the Indian side as they are intrusive in nature and impinge upon sovereign rights.
    Matters now need to be resolved to the satisfaction of both countries.
    While the Indian side are willing to respect the American position that no significant defence cooperation between both countries is possible without such an agreement in place, they too are clear that Indian defence assets cannot be intrusively inspected without reason.
    For the moment it is important for both nations to agree upon the text which will go into the draft agreement. It is important to define clauses such as ''onsite inspection'' and how and where such verification, if required, could be conducted.
    According to defence ministry sources while India has offered to provide inventory and accountability records of the sensitive equipment to be acquired by it from the US, the American side are also demanding that they have the opportunity to physically inspect the equipment besides being supplied with records'
    The matter is particularly ticklish for India as it does not have similar verification agreements with any other country and merely provides a certificate that the equipment procured was being used for the purpose it was intended to.
    The Indian side, having burned its fingers more than once with US sanctions, is not interested in finding itself bound to a document that allows any future administration, or even the current one for that matter, to use such an agreement to hold up defence supplies or halt product support.
    The country's armed forces will also not be interested in allowing inspections at bases or forward areas, where such equipment is very likely going to be deployed.


    domain-b.com : India, US may settle end user verification agreement
     
  4. Sridhar

    Sridhar House keeper Moderator

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    Opposition walks out over US end-use deal


    First Published : 21 Jul 2009 05:21:48 PM IST
    Last Updated : 21 Jul 2009 07:12:39 PM IST

    NEW DELHI: The entire opposition Tuesday walked out of the Lok Sabha, accusing the government of succumbing to American pressure in signing an end-use monitoring agreement for defence purchases, though External Affairs Minister S.M. Krishna maintained there was no question of "bartering our sovereignty".A day after India and the US signed the deal that will allow for verification of end-use of American defence purchases, the entire opposition cried foul, voicing criticism first during zero hour in the house in the morning and also later in the day.External Affairs Minister Krishna read out a one-page statement at around 4.00 p.m. in the lower house of parliament, but it failed to satisfy the opposition members.While saying that US Secretary of State Hillary Clinton's four-day India visit had broadened the bilateral relationship, Krishna said the end-use pact would be referred to in letters of acceptance for Indian procurement of US defence technology and equipment."This systematises ad-hoc arrangements for individual defence procurements from the USA entered into by previous governments," he said.Immediately, Leader of Opposition L.K. Advani of the Bharatiya Janata party (BJP) said the statement dealt with the entire visit of Clinton and not on the "one-point clarification" that the house demanded. "This is very disturbing," he said.Even as several opposition members were on their feet, shouting their anger at the government's statement, the chair did not allow for a debate but allowed some members to express their opinion.Communist Party of India-Marxist (CPI-M) leader Gurudas Dasgupta said that despite the "undiluted apprehension" by the opposition, the government has gone ahead and inked the deal, which will allow Indian defence establishments to be inspected."This makes us vulnerable and completely subservient to the Americans," he said.Former external affairs minister Yashwant Sinha of BJP said he had apprehensions about the deal as he had served in the ministry. "Specifically, if we import hardware from a third county, which have American equipments, will this deal be implemented there? This is a critical question," said Sinha.He also asked if there was any "immovable equipment that will have to be verified" and if "Americans will enter our security establishments"."The government should come clean in the matter," he said.Similar sentiments were expressed by Samajwadi Party chief Mulayam Singh Yadav and Janata Dal-United (JD-U) chief Sharad Yadav."Our foreign policy has been kept hostage to America's whims," said Sharad Yadav.Biju Janta Dal (BJD) member Bhartruhari Mahtab noted that the minister's statement "did not explain our anguish". "This statement is not worth the paper it is written on," he asserted.Then, Sushma Swaraj, BJP's deputy leader in the house, got up to point out that this was not the first time that an end-use monitoring pact had been pilloried by opposition members and similar protests had been made last year."There has been opposition against it even among the official establishment. Even the naval chief had said that it was intrusive," she said.Swaraj said they were in favour of good relations with US, but only on equal terms. "Don't go to the US at the level of a slave," she said, calling for abrogating the agreement.Then, Advani got up to make an intervention. "If needed, make a constitutional amendment to make it mandatory to take permission from parliament before signing any bilateral deal which affects national interests," he said, adding that it was "unimaginable" that American officials will inspect Indian establishments.Finally, Krishna got up to reply that he was "rather surprised with the kind of interpretation being given to a bilateral agreement"."The question of bartering our sovereignty does not arise," he said, pointing out that such clauses for end-use verification were included in earlier agreements."There is nothing extraordinary. It is very, very straight," he asserted.But the opposition expressed their unhappiness, with the Left parties, Samajwadi Party and Bahujan Samaj Party first to troop out of the Lok Sabha."We are not satisfied at all. This is a very bad signal going to the country," Advani said, before he led his party's MPs in walking out in protest.


    US end-user agreement: Chaos in LS
     
  5. Ray

    Ray The Chairman Defence Professionals Moderator

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    51st State is coming into being!

    First, the Jt Statement.

    And now, this EUVA.
     
  6. EnlightenedMonk

    EnlightenedMonk Member of The Month JULY 2009 Senior Member

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    Ray sir... I don't understand what all the fuss is about? It seems like we have got our way with the deal since the US cannot unilaterally inspect and will inspect only with Indians around at a base and time of our choosing... Plus, it cannot change its mind on the policy later as it has a clause against change...

    Could you please explain to me with specific examples if possible how this could have a detrimental effect on our defence, strategy or autonomy ?
     
  7. Ray

    Ray The Chairman Defence Professionals Moderator

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    The US can put the screws on us in different way to get us to agree on site inspections.

    Here is an example:
    Example
     
  8. venom

    venom DFI Technocrat

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    Signing EUVA is like becoming a puppet which will be controlled by US. What is the use of buying the equipment if you cannot use it in war. It is like purchasing weapons for sake of decoration. Do you know about the Iran F-14's Incident...just read it u'll get a clear idea of US policy...
     
  9. sayareakd

    sayareakd Moderator Moderator

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    why buy military product from US ???
     
  10. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    this verification is for the reactors or weapons or both???
     
  11. venom

    venom DFI Technocrat

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    I think Its for both but the verification of nuclear reactors will be under IAEA & of US weapons systems might be Under Us defence...just my thought..& has pak signed EUVA....?
     
  12. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Only weapons sold by the US. Reactors fall under the sole jurisdiction of the IAEA.

    It's not a problem anyways. We will only have company people coming in for inspections. We already do that. The Israelis and Russians probably walk around our bases like it's a park.
     
  13. Ray

    Ray The Chairman Defence Professionals Moderator

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    Enlightened Monk,


     
  14. Ray

    Ray The Chairman Defence Professionals Moderator

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    This is what will happen or so it is believed.
     
  15. Sridhar

    Sridhar House keeper Moderator

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    End-user pact brings India into non-proliferation mainstream: US

    Indo-Asian News Service
    Washington, July 23, 2009
    First Published: 09:49 IST(23/7/2009)
    Last Updated: 10:04 IST(23/7/2009)

    Describing it as a "landmark event", the US has said the end-user monitoring (EUM) arrangement agreed during Secretary of State Hillary Clinton's visit has brought India into the nuclear non-proliferation mainstream.
    "It's a very significant agreement," State Department Spokesman Robert Wood told reporters on Tuesday when asked to explain how the EUM for high-tech defence equipment and technology would work.
    "We're very proud and we believe that this agreement between the US and India is important in our overall global non-proliferation efforts, and we believe that this agreement has brought India into the nuclear non-proliferation mainstream."
    "And so it's a landmark event," Wood said. "What end-user means is basically making sure that the material, once it's delivered, it does not go to any other party, unless there is some sort of agreement by the United States. I mean that's, in essence, what end-user means."
    Asked how the US would verify the end user and whether it would entail any visits to Indian military bases, the spokesman declined to get into the details.
    "Those types of issues will be worked out between the two sides and in consultation with the IAEA (International Atomic Energy Agency) and other players. But I'm not an expert in the agreement, so I can't get into all of the details."
    Asked to comment on the strong political reaction to the EUM in India with critics calling it a sellout to the US, Wood said: "India made a conscious decision to sign this agreement. It's in - India has said it's in its best interests.
    "We certainly think it's in the interest of the United States. But again, we think it's an overall good agreement. And we will need to implement the agreement, and those activities are already underway."

    End-user pact brings India into non-proliferation mainstream: US- Hindustan Times
     
  16. Sridhar

    Sridhar House keeper Moderator

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    23 July 2009

    EUM agreement may speed up defence purchases by bypassing bureaucrats

    23 Jul 2009 8ak: US Senator Clinton was well advised that to get anything done in Indian defence, the MoD bureaucrats must be bypassed.
    The Statesman: Was the Ministry of Defence bypassed?
    What has surprised many is that the defence minister, Mr AK Antony, was nowhere in the picture during the recent visit of the US Secretary of State, Mrs Hillary Clinton, and everything was given over to the ministry of external affairs.
    Calcutta Telegraph: U.S. defence deals: the inside story
    Officers of the ministry of defence and finance or those in charge of public sector defence production enterprises have now been restrained in their freedom to craft end-use clauses while buying American equipment or technology.
    8ak: So what was the point of debating this clause and delaying equipment purchases for years if India gave in unconditionally? The issue is that India's stand had no merit at all. As 8ak had reported earlier, the EUM agreement is not India specific. The U.S. has this pact with every other close ally like Israel, Australia and Japan. Secondly, it is not the opinion of a few people but actual U.S. law based on their experiences like the Stinger missiles they sold in Afghanistan against Russia but were used against the U.S. later. Thirdly, it is in India's interests that weapons are kept in check so that equipment in Saudi Arabia does not end up in Pakistan.




    http://www.8ak.in/8ak_india_defence_news/2009/07/eum-agreement-may-speed-up-defence-purchases-by-bypassing-bureaucrats.html
     
  17. 1.44

    1.44 Member of The Month SEPTEMBER 2009 Senior Member

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    The US will only abide by the agreement when it suits their interests.The have no reason to if the weapons are not being used to their liking.
    It would be interesting to see what happens to the agreement in the event of a Indo-Pak conflict.
     
  18. advaita

    advaita Regular Member

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    EUVA for both nuclear deal and for the the weaponary should not be such a big deal.

    EUVA in case of reactors - India's ability to produce uranium and plutonium is as such very limited due to the hand that was dealt to us by god. Thorium reaserch is still quite far off from full scale implementation. The PEAK OIL is near and Coal, the only thing we may have reasonable quantity of, may not be right thing because of our likely commitments to multilateral pollution control (esp considering that the industrial scale carbon capture tech and implementation in India is non existent &/or the capacity to implement is not worthwhile. Besides coal may act as the energy reserve for India (the way US has reserve oil stocks). I am sure the US would not let go of a great bargaining position vis a vis an energy client when the client is so energy naked. I think we should have signed the agreement and it would in the long run actually help India economically. Does not makes sense to leave a reasonable deal in search of a perfect one.

    EUVA in case of weaponery - Forget it, US (or for that matter any other country) will never supply any worthwhile weaponery untill we sign this. The only real option is developing our own advanced weaponery and even though the technical capability may actually be there but the finance is not, again economics. Also I am sure with our history with US being as it is the weapon use pakistan and china may be pretty restricted in our difficult times (in any case we will invariably face the same difficulties with US as we have faced with Russia and Europe, esp in terms of difficult spares and enhancements). Here the only real long term option seems to be development of indigenous capabilities. I think diplomacy can in the long run help India get out of this limitation by cultivating cooperative deals with others like France, Japan etc.
     
  19. venom

    venom DFI Technocrat

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    The real deal: not first end user pact, is India’s most lax

    New Delhi:

    While the heat has been turned on the government over the End User Monitoring Agreement (EUMA) with the US, India has in the past signed at least three defence deals that contained end user laws and even gave regulators the right to ‘on-site’ inspections of weapon systems.

    The first time the end user clause was agreed to was in 2002 by the BJP-led government when it signed a deal to purchase Weapon Locating Radars from the US. The $200 million deal to purchase 12 ANTPQ 37 Firefinder radars that help locate enemy artillery positions contains an end user agreement with the US that gives permission to its inspectors to carry out “compliance assistance visits” on their locations. In fact, sources say that the crucial radars have already been subject to an inspection by US regulators in 2005 when they were deployed in Jammu and Kashmir. Official US records also show that an inspection in both India and Pakistan was scheduled in the same year.

    That, and the experience of signing end user agreements allowing inspections of the Self Protection Suite (SPS) onboard the VVIP aircraft meant for the Prime Minister, prompted the government to negotiate for ‘pre-scheduled’ inspections of weapons systems at a location of India’s choosing.

    The key change in the new agreement that has been worked, government sources say, is that the clause for on-site inspections has been done away with. While US end user laws are the most stringent — requiring physical verification of the systems sold to ensure that they are not being misused — India has bargained for a deal that will only have verifications at pre-scheduled timings and places at the discretion of the armed forces. In all, the end user agreements that are currently in place, including one for the Weapon Locating Radars and the Jalashva troop carrier, India’s second largest warship, gives US inspectors the right to ‘on-site’ inspections whenever they wish.

    The new agreement that has been negotiated is less stringent, as it gives more flexibility to the armed forces as well as keeps inspectors away from sensitive locations. “What this essentially means is that we can bring the equipment that has to be examined to a non-sensitive zone at the time of our choosing. In case the equipment is being used, the time of examination can also be changed,” a government source said.

    Other countries that have signed end user laws with the US, including Pakistan, give US inspectors complete access to their military bases.

    Government sources say that in India’s case, the clause has been modified to introduce a new system of scheduled inspections. In the clause, inspectors wishing to check the equipment will need to inform India which will in turn set up a place and time for the checks.

    While the EUMA with US has raised a lot of controversy in Parliament, most countries that sell top of the line defence equipment to India impose some kind of restrictive clauses to prevent their misuse. The agreement with the US is the most comprehensive end user law, but countries like Russia and France too have agreements with India to prevent sensitive equipment from being passed on to other nations.

    The real deal: not first end user pact, is India’s most lax
     
  20. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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    some good news:

    No intrusive US checks on Indian Army bases: Report

     
  21. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    India and U.S. agree on defense pact

    The Sandy Post Ι Us_world_news

    India and U.S. agree on defense pact

    Saturday, July 25, 2009

    By Arshad Mohammed and C. Bryson Hull

    NEW DELHI (Reuters) - The United States and India said Monday they had agreed on a defense pact that takes a major step toward allowing the sale of sophisticated U.S. arms to the South Asian nation as it modernizes its military.

    Secretary of State Hillary Clinton said Delhi had also approved two sites for U.S. companies to build nuclear power plants, offering American companies the first fruits of last year's landmark U.S.-India civil nuclear cooperation pact.

    The announcements gave Clinton tangible accomplishments as she ended a trip to India designed to deepen ties and to demonstrate President Barack Obama's commitment to India's emergence as a player on the global stage.

    "We will work not just to maintain our good relationship, but to broaden and deepen it," Clinton said at a joint news conference with Indian External Affairs Minister S.M. Krishna.

    In a clear gesture of U.S. favor, Clinton said that Indian Prime Minister Manmohan Singh had accepted an invitation to make a state visit to Washington on November 24 in what would be the first such visit by a foreign leader under Obama.

    A key element of Clinton's trip was the announcement that the two sides reached an "end-use monitoring" pact that she said would pave the way to broader defense cooperation.

    Required by U.S. law for the sale of sophisticated weapons systems, the pact would let Washington check that India was using any arms for the purposes intended and was preventing the technology from leaking to others.

    India is expected to spend more than $30 billion over the next five years on upgrading its largely Soviet-made arsenal, roughly a third of which will be a contract to buy 126 multi-role fighters.

    That could prove a boon to U.S. companies like Lockheed Martin Corp and Boeing Co.

    The two companies are competing with Russia's MiG-35, France's Dassault Rafale, Sweden's Saab JAS-39 Gripen and the Eurofighter Typhoon, made by a consortium of British, German, Italian and Spanish firms.

    SHOWING CONTINUITY

    The defense pact, unveiled by Indian External Affairs Minister S.M. Krishna and Clinton, was not formally signed because it takes the form of agreed language to be included in contracts for future defense sales, a U.S. official said.

    While it is a step toward high-technology U.S. arms sales, at least one other must be concluded on communications and information security to permit such deals.

    There is also one more hurdle to overcome before U.S. firms will bid to build nuclear reactors at the two sites approved by India -- liability protection. Clinton said she hoped the Indian government could secure this soon.

    U.S. officials estimate the two nuclear sites represent up to $10 billion in business for U.S. nuclear reactor builders such as General Electric Co. and Westinghouse Electric Co, a subsidiary of Japan's Toshiba Corp.

    As part their efforts to strengthen ties, the two countries agreed to form a "strategic dialogue" led by Clinton and Krishna who will meet annually. They agreed to make it easier to launch sensitive U.S. technology on Indian rockets.

    Analysts said both countries wanted to dispel any belief that the Obama administration might have neglected India in its early months as it focused on getting Pakistan's military to battle insurgents on its western border with Afghanistan.

    "This is clearly a response from Washington to the perception in Delhi that the U.S. had forgotten India," said Siddharth Varadarajan, strategic affairs editor of The Hindu newspaper.

    Clinton leaves New Delhi Tuesday morning for Bangkok, where she was scheduled to meet Thai officials before traveling to Phuket for a regional conference.

    (Additional reporting by Krittivas Mukherjee, Matthias Williams and Bappa Majumdar in New Delhi; Editing by Ralph Boulton)
     

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