US Takes Steps To Ease Export Restrictions To India.

WASHINGTON -(Dow Jones)- The U.S. announced several steps Monday to ease restrictions on exports of sensitive products to India, following through on a pledge President Barack Obama made during his visit to the country in November to strengthen strategic and trade relations.

The Commerce Department's announcement of the moves, which essentially recognize that India doesn't represent a proliferation threat, was made a couple of weeks before Commerce Secretary Gary Locke leads two dozen U.S. high-tech firms that stand to benefit from the changes on a trade mission to India.

"Today's action marks a significant milestone in reinforcing the U.S.-India strategic partnership and moving forward with export-control reforms that will facilitate high-technology trade and cooperation," Locke said in a statement.

Lifting the restrictions isn't expected to result in a trade bonanza for the U.S., since controls of dual-use technology affect less than 1% of trade with India. But it should help facilitate the new spirit of cooperation between the two countries in the defense and civil space sectors, while furthering Obama's cause of nuclear nonproliferation, a U.S. administration official said.

"The perception of onerous U.S. export controls certainly has been a hindrance to high-technology trade over the years," the official told reporters on a conference call to discuss the changes. "So our goal was to remove India from the categories within those dual-use regulations that connote countries as proliferation concerns."

Two major changes, which will go into effect Tuesday, will begin the process of putting export controls for India "on a normalized footing," as the official described it.

Commerce removed nine Indian space and defense-related agencies from Commerce's "entity list," which triggers export-license requirements on goods that normally don't require a license.

In addition, regarding the licensing of so-called dual-use goods that can be used for either civilian or military purposes, India is no longer being treated as a "country of concern" regarding proliferation of nuclear, chemical or biological weapons.

India has long-sought the lifting of the restrictions, which have been in place since the country tested nuclear weapons in 1998. When Obama promised during the November trip to revise the export controls, Indian Prime Minister Manmohan Singh hailed the move as a "manifestation of the growing trust and confidence in each other."

The U.S. will continue to work with the Indian government to remove some remaining unilateral restrictions this year, the administration official said. It is also supporting India's efforts to join four multilateral export-control regimes, which will require the country to revise its own export restrictions.

In the meantime, Monday's announcement is good news for some of the 24 companies traveling to India with Locke from Feb. 6 to 11, such as aerospace giants like Boeing Co. (BA) and Lockheed Martin Corp. (LMT). Boeing was a major beneficiary of Obama's trip, accounting for several billion dollars worth of the nearly $15 billion in business sales that were announced.

"Some of those on the delegation will be very interested in these announcements," the administration official said. But he stressed that the controls are being eased "to strengthen the non-proliferation regime, not just to strengthen trade with India."

Source : automatedtrader.net