Progress on the deal to jointly manufacture jet engines in India, purchase of MQ-9B armed drones, agreement on civil nuclear liability and trade are expected to be the top issues on the agenda as Prime Minister Narendra Modi and U.S. President Joe Biden hold bilateral talks late on Friday, a day before the G-20 summit. Further discussions as well as some of the deals are expected in January when Mr. Biden is likely to visit India and officials said India is looking to have the Quad leaders summit on January 26 or a day before possibly with the leaders as chief guests.
High technology cooperation under the Initiative on Critical and Emerging Technology (iCET) will also be reviewed following up on the announcements from Mr. Modi’s state visit to Washington D.C. in June, official sources said
Talks on global issues
The meeting is an opportunity for the two leaders to discuss the situation in Ukraine, US-China relations, as well as India-China relations and the situation along the Line of Actual Control (LAC), a source said. The India-U.S. nuclear deal and civil nuclear liability agreement will be discussed as well as announcements on new investments, sources added.
The leaders are likely to discuss outstanding trade issues, given that the U.S. has dropped most World Trade Organisation (WTO) cases against India in the past few months and India has moved on dropping tariff increases against the U.S. on certain commodities. In particular, Mr. Biden has been keen to see India join the Indo-Pacific Economic Forum’s ‘Trade’ pillar launched in May 2022, which India has so far stayed away from.
“I think there’s a desire and a good possibility [of India joining IPEF trade pillar]. But we shouldn’t settle for bringing it back to where it was four or five years ago…I think we have a higher ambition for where we can go. And you’ll see record trade, I believe, in the next 12 months, given the reduction in tariffs,” U.S. Ambassador to India Eric Garcetti told The Hindu ahead of the summit. However, he didn’t hold out much hope that the U.S. would restore India’s GSP special status for exports, that was revoked in 2019, as it needs congressional approval.
Purchase of drones
The Defence Ministry is all set to issue a Letter of Request (LoR) for the purchase of 31 General Atomic MQ-9B armed drones, 15 for the Navy and eight each for the Army and Air Force. This is likely to be issued coinciding with bilateral talks. The Acceptance of Necessity (AoN) was issued by the Defence Acquisition Council as PM Modi landed in the U.S. The cost is estimated at $3,072 million and the deal will happen through the U.S. Foreign Military Sales route.
Based on the LOR, the U.S. Government and MoD will finalise the Letter of Offer and Acceptance (LOA) where details of equipment and terms of the procurement would be negotiated and finalised. A deal could be finalised in January when Mr. Biden is expected to visit India, officials stated.
Eight years since the civil nuclear deal which brought India into the global civil nuclear energy fold, cooperation between the two countries remains stuck over U.S. concerns on India’s nuclear liability law. Keeping this in mind, the two countries recently announced cooperation on Small Modular Reactors.
During the PM’s visit to the U.S. in June, General Electric (GE) and Hindustan Aeronautics Limited (HAL) signed a memorandum of understanding to license manufacture the 414 jet engine in India which has been chosen to power India’s indigenous Light Combat Aircraft (LCA)-MK2. As reported by The Hindu earlier, defence officials had stated that the jet engine deal would see 80% technology transfer for manufacturing including some critical technologies by GE to HAL and the first engine is expected to be ready three years after the contract conclusion.
End August, the proposal to license manufacture the General Electric F-414 jet engine cleared the U.S. Congress as there were no objections raised. Officials explained that since Congress has been already notified, which happened end July, and since there have been no objections inside 30 days, the deal is considered cleared.
While stating that an agreement on this is not expected to be concluded this week, an official in the know said that it is “under progress” and should be done soon.
