By Karen Parrish
American Forces Press Service
HYDERABAD, India, July 25, 2012 - A visit here yesterday for talks and tours
proved "very instructive," Deputy Defense Secretary Ashton B. Carter
told Indian defense industry leaders.
U.S. Deputy Defense Secretary Ashton B. Carter, right, and David W.
Tucker, chief operating officer of Tata Lockheed Martin Aerostructures,
tours a Lockheed plant that manufactures parts for the C-130 Hercules in
Hyderabad, India, July 24, 2012. Carter is on a 10-day Asia Pacific trip to
meet with partners in Hawaii, Guam, Japan Thailand, India and South Korea.
DOD photo by U.S. Navy Petty Officer 1st Class Chad J. McNeeley
(Click
photo for screen-resolution image);high-resolution image
available.
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Carter
said the daylong visit was a chance to take "practical steps" to
further U.S.-India defense cooperation. In a New Delhi speech to Indian defense
industry representatives earlier this week, the deputy secretary stressed the
U.S. desire for closer military cooperation between the United States and
India.
The main event here for Carter was a roundtable discussion in which six
senior Indian defense industry leaders provided their perspectives on
U.S.-India cooperation.
Defense cooperation issues between the two nations reach into the
government, military and business sectors of both countries, the deputy
secretary said.
"It's not enough when arrangements -- cooperative [research and
development], cooperative production arrangements -- make governmental sense,"
he said. "They have to make strategic sense, then they have to be
bureaucratically nonimpaired. But they also have to be economical."
Carter said the United States, with the world's most advanced military, and
India, which has perhaps the most accelerated timeline for military
modernization of any nation, must work to advance progress in all three areas
if they are to realize the full potential of their possible defense
cooperation.
"My own thinking about this ... is that you have to work in parallel on
the practical, individual project [level] and the big bureaucratic front,"
the deputy secretary said. And the notion that the United States must change
its acquisition system and export controls and India must change its defense
procurement system before companies in the two nations launch more partnership
ventures doesn't hold water, he added.
"It's not going to happen that way," Carter said. The realistic
view of defense cooperation, he added, is that concrete progress will encourage
the two governments to make systemic changes in areas such as technology
transfer and export controls.
The delegation to Hyderabad included the senior U.S. diplomat in India,
Ambassador Nancy Powell, U.S. Consul General in Hyderabad Katherine S. Dhanani,
and regional and industry policy experts from the departments of Defense and
State.
The conversation here between the deputy secretary's delegation and the
half-dozen Indian defense industry leaders made clear how complicated the nexus
of government regulations and restrictions, defense acquisition timelines and
industry ramp-up processes can be. When partnered U.S.-India production efforts
are involved, as they increasingly are here, six different sets of rules and
regulations may apply.
Carter said he got that message "loud and clear" during his visit.
The two nations' business and security regulations, he said, include rules that
are well-intended, but have unintended consequences. The United States is
working to simplify and streamline bureaucratic guidelines, he noted, and he's
encouraged that India also is adjusting its regulations and restrictions to
further its cooperation with the United States.
The Hyderabad discussions explored several of the topics Carter raised in
his New Delhi speech, including limits to foreign direct investment in Indian
companies, and offset requirements under which companies supplying military
equipment to India must, in return, invest a certain amount in particular
Indian industrial sectors.
Indian industry leaders here noted their government and Defense Ministry
either are discussing or already are making changes in both foreign direct
investment caps and offset restrictions, which will increase incentives for
American companies seeking to do business in India.
The business leaders urged Carter to help loosen U.S. defense acquisition
timelines and technology export regulations to better allow Indian firms to
compete in the U.S. defense arena. They said Indian companies seek
"clarity, stability and predictability" in their dealings with the
United States.
"We have to earn progress in that area," the deputy secretary
responded. "That is, there has to be enough volume and promise and real
activity that is being impeded ... to make the case that it is unacceptably
detrimental to us to retain those restrictions."
Increased defense cooperation will drive regulation reform, which in turn
will lead to additional partnered opportunities, Carter noted.
"The more we do together the easier it becomes to do more. ... It's
something that exponentiates," he added.
Carter also toured three facilities where Indian and U.S. companies are
jointly producing and assembling parts for U.S. military and commercial
aircraft that are used in India and around the world.
Carter said repeatedly during his visit that such joint efforts can and
should expand further, and that U.S defense leaders want to move beyond a
buyer-seller relationship and increase cooperation with India on high-value
technologies.
The deputy secretary's central message in this country, he said July 23, is
that the United States considers partnership with India critical to its
strategic rebalance to the Asia-Pacific region.
"We want to knock down any remaining bureaucratic barriers in our
defense relationship, and strip away the impediments," Carter said during
his New Delhi speech. "And we want to set big goals to achieve."
The insights Indian industry leaders shared with him here, Carter said, are
helpful in understanding how "we can structure defense cooperation so that
it is successful in business terms."
The deputy secretary left India earlier today en
route to South Korea, the final stop on a 10-day Asia-Pacific tour that has
also included visits to Hawaii, Guam, Japan and Thailand.