US keen to partner with India on defence modernisation program

Indian armed forces have been calling for changes in the FDI limit, asking for greater private sector involvement

The United States is keen to partner with India in its defence modernisation drive, the Pentagon has said amidst calls from the Indian armed forces for involving private sector in developing country's defence infrastructure and a strong manufacturing base.

"As we've often noted, we want India to have all of the capabilities it needs to meet its security needs and we want to be a key partner in that effort," the Defence Department spokesman, Jeffrey S Pool, told PTI.

"It's encouraging to see a call for changes to the FDI limits, and we continue to welcome greater private sector involvement as well," Pool said.

Pool was responding to question on a recent statement by the Air Marshal PP Reddy VM, DG (Inspection & Safety) of the Indian Air Force that Indian industry requires tax holidays and more industry friendly import and export regimes.

Research and Development funds should also be made available to the private sector companies, the IAF official had said early this week at the inaugural Session of 8th International Conference on Energising Indian Aerospace Industry in New Delhi.

The United States has already placed India in the category of 'closest partners' for defence cooperation.

The Joint Declaration on Defence Cooperation arrived at between the two sides in September says that they "look forward to the identification of specific opportunities for cooperative and collaborative projects in advanced defence technologies and systems, within the next year".

Such a move is the next step of defence co-operation and trade given that defence trade has shown significant growth in recent years with aggregate worth of defence acquisitions from US crossing $9 billion.

Soon after the White House meeting between Prime Minister Manmohan Singh and US President Barack Obama, the Deputy Secretary of Defence Ashton Carter had said the industry on both sides is enthusiastic about these proposals.

"Now it's in India's court. But it's only been two-and-a-half weeks or so since I left. And I'm going to do another round of them here, where we're going to go out to US industry again, because in the first round, I think we got a lot of very good proposals, but they were mostly from companies that had done some business in India and had kind of figured out how to work with India," he had said.

"We also want to draw in companies that haven't tried India yet or have been afraid to deal with India, and I believe we can reduce those barriers to entry to the point where India is a very attractive market," Carter said.

Cater in October had said the US has submitted a white paper explaining where India falls within US export control system.

"The paper we sent them covered several key areas from export controls rules themselves to end use monitoring and the need to identify proposals for co-production and co-development," Carter had said at the Center for American Progress.