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US New Rule that makes changes in export control laws would benefit India

 

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Recognizing India's "major defense partner", the United States has made the necessary changes to its export control laws that would benefit India by facilitating the transfer of technology and weapons.

The new rule making necessary changes to export control laws "creates a presumption of approval" for Indian companies seeking to import military items controlled by the Department of Commerce, with the exception of weapons of mass destruction.
The new rule also amends the law so that companies will not need a license at all after becoming a Validated End User (VEU).

This means that only under the rarest circumstances will India be denied licenses, a source familiar with the changes said.

Indian and American companies operating in India may apply for VEU status for civil and military manufacturing and in doing so do not need to obtain individual licenses. This makes it much more convenient to build a global supply chain and to respond quickly to changing market conditions, "said Benjamin Schwartz, USIBC's director of defense and aerospace.

 

"I am pleased to note that India's status as a" major defense partner "- a designation we strongly support - will translate into tangible regulatory reform," said Mukesh Aghi, USIBC.
"This is a very favorable policy for Indian companies. The rule will make the company significantly easier for Indian companies in the defense sector, especially those in partnership with US companies. This gives businesses Indian and American companies operating in India the ability to be reactive in real time to meet their supply chain needs, "Schwartz said.

Over 810 licenses representing approximately USD 5 billion of trade over the past half decade have been granted for goods covered by this new rule.

Most of these licenses being focused on aerospace systems and ground vehicles. Additionally, under the new regulation, Indian companies will not be required by US law to seek approval for the re-export of platforms that contain less than 25 per cent US content.

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