Barack Obama’s visit to India is marked by two rare distinctions — he will be the first US president to be chief guest at India’s Republic Day parade and also the first president to visit India twice.

Both these aspects are significant and give a clear indication of the potential of the India-US relationship, particularly in defence.

Higher potential

Defence and strategic security are a major area. From a regime of mistrust and stagnation two decades ago, we have arrived at a situation of healthy engagement. Ten years after the Framework Agreement signed in 2005 (dealing with bilateral defence relations), now due for renewal, much has changed.

The ministry of defence has purchased equipment worth $10 billion from US companies, joint exercises across the three services have become routine, strategic visits have increased and the much feared US defence weapons licensing system has worked well for Indian purchases, with minimal delays and only the occasional exceptions.

US defence corporations have started orienting themselves to India’s competitive procurement system whereby the focus on ‘Make’ and ‘Buy and Make Indian’ under India’s Defence Procurement Procedures (DPP) has been factored in. While the canvas of procurements has expanded from routine defence equipment to dual use and homeland security items, emerging strategic areas like cyber security cooperation are gaining ground.

Narendra Modi’s government is focused on bolstering defence capability as well as on enhancing the ‘Make in India’ dimension.

As India seeks to modernise and indigenise , US can offer the best and latest in military technologies.

Another significant enabler is the Defence Technology and Trade Initiative (DTTI) announced in September 2013 whose key architect Aston Carter is now the US defence secretary.

Further, the relaxation of FDI norms from 26 per cent to 49 per cent is an advantage, although it is not the most rosy scenario for foreign companies. Added to that is the relaxation of defence production licences to Indian entities with many items shifted to the automatic route.

With the defence ministry’s focus on indigenisation,, US companies can play a major role. Manufacturing potential in India has not been realised except in the automobile and pharma sectors.

Unrealised potential Defence manufacturing involves long gestation periods and any company that invests will have to be confident that there is genuine business potential.

The transfer of technology will take place when matching partners are available to absorb technology and work on the next stages of co-development and co-production. India’s technology requirements should not be restricted to the DRDO’s wish list.

Homeland security solutions need a push. Data fusion technologies from the US can be a game-changer. Related to this is the need for better cooperation between intelligence agencies. Sharing of terrorism databases on real-time basis will be a crucial first step in this direction.

India sees the electronics and semi-conductor industry as a priority, and technology support for the chip manufacturing and fabrication industry will be a big help. Cyber monitoring and managed security solutions for network security require handholding and support. The scope for the US to help build the ecosystem is immense.

The writer is the former head of General Dynamics in India