The US commerce department will allow General Electric India (GE India), later this month, to enter a pre-approved export "express lane" as a trusted end user, making it the first Indian company to qualify as a validated end-user (VEU) for US technology in India.
The `VEU' designation will allow GE India to receive certain controlled items from the United States, including civilian aircraft technology and explosive detection equipment without an individual licence, cutting red tape and making the flow of trade more efficient between the countries, the commerce department said in a release.
Secretary of commerce Gary Locke announced the important step forward during remarks at the US-India Business Council's 34th anniversary `Synergies Summit.'
He said the opening of the VEU programme is an indication of the increased importance of the US-India bilateral and commercial relationship.
"This is an important step in enabling a more rapid and efficient flow of sensitive technology between India and the United States," Locke said. "It also is a significant effort to build trust between the United States and India. We're looking forward to reciprocal actions from our partner," he added.
The program is administered by the department of commerce's bureau of industry and security (BIS) and implemented by an interagency committee consisting of representatives from the departments of commerce, state, defense, energy and, when appropriate, the treasury, the release said.
GE India will become eligible as a validated end-user later this month after the regulation is published in the Federal Register. Secretary Locke also asked more Indian firms to take advantage of the VEU programme.
"The VEU programme is a significant initiative that promotes high technology trade while protecting US national security," commerce acting under secretary for industry and security Daniel O Hill said. "We hope that other companies will take advantage of this new programme designed to facilitate trade with trusted partners," he said.
The commerce department's bureau on industry and security had the final rules for authorisation of validated end users in the Federal Register on 19 June 2007 and on October 2, 2007, BIS published a rule making companies in India eligible to participate in the VEU programme.
End-users that apply and are qualified by BIS as validated end-users are eligible to receive specified items under the general authorisation "Authorisation Validated End User" instead of under individual transaction-specific licences.
Companies in India participating in VEU must pass a rigorous national security review and agree to strict follow-on compliance obligations prior to qualification. Qualification for VEU benefits both the foreign participants and US exporters by limiting the paperwork that must be completed for shipment authorisation, thereby allowing export on demand as well as resource savings.
GE will use its new status to exchange technology with its security, aviation and energy infrastructure businesses in India, the company said in a statement.
"It will not only permit technology exchange on energy and aviation between GE and our research facilities in India, but will also permit the sale of advanced security systems to the India's ministry of defence, Indian police and other Indian security organisations," said Tejpreet Chopra, chief executive of GE India.
Last year, US companies exported $18 billion worth of goods to India, and India shipped $25 billion worth of goods to the United States, Locke said.
The United States wants India to loosen foreign direct investment restrictions in the financial services, retail and cable and satellite television sectors, Locke said.
India also needs to boost its protection of intellectual property rights, he said.