Significant Developments in India
Jul. 2016
TradeSecure

Significant developments in 2016 will facilitate strategic trade and commercial cooperation with India.

An Update on India’s MTCR and NSG Progress

In July 2008, India and the United States signed the Civil Nuclear Cooperation Agreement. A few weeks later, India signed an Additional Protocol with the IAEA and obtained a “clean” waiver from the NSG (which permitted NSG member states to participate in India’s safeguarded civil nuclear complex by building power reactors, supplying fuel and pursuing other avenues of collaboration). Since then, New Delhi has upgraded its export control laws, guidelines and control lists so as to make them compliant with UN Security Council Resolution 1540 obligations, as well as consistent with the corresponding provisions of the NSG and MTCR. India will shortly complete the task of harmonizing its national list with the provisions of the Australia Group and the Wassenaar Arrangement.

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These efforts are yielding tangible outcomes. In May 2015, India formally submitted its application for membership to the MTCR. Then in June 2016, India signed the Hague Code of Conduct and signed on to become the 35th member state of MTCR. (India has reportedly requested drones from the United States for technical reconnaissance missions along its border with Pakistan, and in general, will be able to upgrade its technology-embedded missile and aerospace cooperation with the major global players.)

India’s NSG membership became a matter of intense debate at the June 23-24 2016 NSG Plenary in Seoul. In the end, 38 member voiced strong support for India’s membership, including the United States, Russia, France, Britain, Canada and Mexico. China led the opposition, while the other 9 states essentially called for the setting up of clear criteria for review of non-NPT members’ cases. Following the Plenary, NSG set up a Consultative Committee of Participating States. This Committee will hold meetings with all member states and suggest specific criteria and a path forward for India’s membership.

The NSG is expected to convene a Special Session in the Fall of 2016 to formally review and decide on India’s membership. The Committee will begin its work shortly, while much diplomatic activity is expected to be carried out in the background with the aim to bring this matter to an amicable conclusion. India is building 6 additional nuclear reactors to supplement its existing pool of 21 reactors, while New Delhi has signed agreements with Russia, France and the United States to build power reactors in India, and secured long-term uranium supply agreements with Australia, Kazakhstan, Mongolia, Niger and Namibia. So while the 2008 waiver already permits India to forge these partnerships, a formal membership will enable India to join and contribute to the elite body that regulates global nuclear commerce.

Keep your eyes on newer developments that open up further strategic business opportunities in India.

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