VEU programme to enhance Indo-US trade ties

Washington: The US Government has announced the Validated End-User (VEU) programme aimed at facilitating and increasing high-technology trade with India. According to Mario Mancuso, under secretary of commerce for industry and security, the programme is a sign of improving economic engagement between New Delhi and the United States over the last several years. In effect, the programme will allow US exporters of high-tech equipment to sell to Indian customers without licenses.

The senior Commerce Department official also said that the Validated End-User (VEU) programme will enable US companies to capitalise business opportunities by eliminating individual license requirements on exports of US-controlled items to certain customers in India.

"In 1999 roughly a quarter of US exports to India required a license. Today that figure is around one per cent," said Mancuso.

"It (VEU) will enable US companies to sell certain items to select pre-identified customers who have a demonstrable track record of using sensitive US technology responsibly," Mancuso said here.

"The announcement takes place against the backdrop of a pretty impressively and progressively improving economic engagement over the last several years with India.

"The extension of VEU to India supports the Bureau of Industry and Security''s most important policy to proactively accelerate and elevate our engagement with the most important markets of the world," he said.

"VEU will facilitate high tech trade while at the same time maintain secure export control system and will create a lot of market opportunities to exporters particularly in electronics, avionics, aerospace and life sciences sectors," Mancuso said.

According to some, the high tech equipment could have possible military applications. The initiation of this step almost certainly paves the way for increased sales of avionics and aerospace equipment by US companies to India. This holds a certain amount of significance in the defence sector, given the increasing number of contracts currently being issued by the Indian Armed Forces.

It also holds considerable significance for the civilian sector given the fact that India would like to enhance and consolidate its presence in the aerospace manufacturing sector.