India and the United States are zeroing in on an industrial security agreement that will allow the transfer of defence technology, sources said on Monday, ahead of US Secretary of State Mike Pompeo’s talks in New Delhi this week to promote strategic ties.
There have been disputes over trade and protectionist moves have increased between the two countries in recent months, but defence ties remain strong with Washington looking to build Indian capabilities as a counterweight to China.
India has purchased weapons worth more than $15 billion from the United States over the last decade as it seeks to replace its Russian-origin military and is in talks for helicopters, armed drones and a bigger Indian plan for local production of combat planes together worth billions of dollars.
To allow for transfer of technology for building combat jets locally and other joint ventures, the United States had sought guarantees for the protection of classified information and technology.
A draft of the agreement called Industrial Security Annex is drafted and will go up before the Indian cabinet for approval in the next few weeks, sources aware of the India-US defence negotiations said.
It would be a first for New Delhi has entered into such a pact with any country, although the United States has such agreements in place with several countries, one of the sources said.
Lockheed Martin and Boeing are heading in a race for a deal estimated at over $15 billion to supply the Indian Air Force with 114 fighter planes to replace its ageing fleet of Mig 21 jets.
The planes have to be built in the country as part of Prime Minister Narendra Modi’s Make in India drive to reduce expensive imports and build a domestic industry.
Pompeo will arrive in New Delhi on Tuesday and will hold talks with Modi and his Indian counterpart Subrahmanyan Jaishankar the following day.
After years of hesitation, India signed an agreement in 2016 to allow both countries to access each other’s military bases and a second one last year to secure military communications.
A third accord on sharing geospatial information is still in its nascent stages, the source said. These are all foundational agreements designed for closer military cooperation, the source said.
