End-use monitoring woes for India

(the hindu ,29 Jul 09)
The U.S. has hailed the End-Use Monitoring Agreement (EUMA) with New Delhi as a “landmark event” and “a very significant agreement” — one that brings India into the “nonproliferation mainstream” and “is part of the fulfilment” of the nuclear deal. U.S. officials say the accord opens the path to mega deals on arms supplies to India. By contrast, New Delhi assiduously has sought to downplay EUMA’s importance and sidestepped its linkage to the nuclear deal, given that the Prime Minister had twice told Parliament — the last time on July 22, 2008 — that there are “no secret or hidden” understandings “over and above the documents made public.”

But EUMA is no insignificant accord: It imposes on India conditions that no other arms-supplying state has ever sought. Yet, the arms the U.S. is selling India are not the top-of-the-line weapons — a reality EUMA’s conclusion is unlikely to change. In fact, the U.S. has transferred to Pakistan weapon systems matching those on sale or offer to India, especially big-ticket items like maritime reconnaissance aircraft, military transport planes and fighter-jets. Today, while Washington seeks to sell India 1970s-era F-16s or F-18s in an $11-billion deal, Japan debates the merits of F-22s versus F-35s for air superiority.

To be sure, India has sought to cement its strategic relationship with the U.S. by buying some American arms. Money, after all, matters a lot to U.S. diplomacy. Buying U.S. arms may jibe with India’s arms-diversification policy, but such imports, by no stretch of imagination, are critical to India’s defence. In fact, much of India’s imported weaponry in the approaching years will continue to come from other suppliers, principally Russia, Israel and France, in that order. But if the U.S. can inflict restrictive and invasive conditions, despite being a new supplier, will it embolden other suppliers to seek end-use rights in India and emulate U.S.-style sales to rivals?

Let’s be clear: EUMA is rooted in the extraterritorial application of U.S. law, which demands “reasonable assurance” that the recipient state is complying with American regulations regarding the use and security of defence articles and services. The avowed aim is to enhance American national-security and foreign-policy objectives.

There are three separate end-use monitoring (EUM) programmes. The Pentagon-administered EUM — known in U.S. parlance as the “Golden Sentry” programme — applies only to government-to-government defence contracts (like the ones signed with India in recent years) and imposes stringent “cradle-to-grave” obligations on the recipient state covering the use and final disposition of transferred items, with the U.S. holding “reversionary rights” to take back equipment no longer needed. Direct commercial sales fall under the State Department’s “Blue Lantern” programme. The Commerce Department’s “Extrancheck” monitors dual-use items exported by U.S. industry via the Export Administration Regulation (EAR).

Negotiated with New Delhi over a three-year period, the all-embracing EUMA has some clauses that few can object to, such as a prohibition on second-hand sales. But it also has several controversial provisions that arm Washington with considerable leverage. EUMA explicitly restricts what India can do with the U.S.-origin defence equipment. Under its terms, India cannot modify the imported weapon system in any form. Also, to keep the importing state dependent on the U.S., EUMA restricts India from getting U.S.-sold defence equipment serviced by any another country without prior American permission. Even spare parts need to be sourced only from America.

More importantly, the U.S. has been granted the right to periodically carry out an inspection and physical inventory of all articles transferred to India. A EUMA provision mandates that “the U.S. government will be permitted, at its discretion, to conduct an inspection and physical inventory of all articles and services transferred” and that, upon request, “the inventory and accountability records maintained by the purchaser will be made available to the U.S. personnel” conducting the inspection.

In the negotiations, India had strenuously objected to physical inspection and instead sought a scrutiny of the records and other accountability measures in place. After all, EUMA requires India to maintain good internal accountability and keep records of inventories and items consumed, expended and damaged. In the end, the Americans had their way, but it was agreed the physical inspection would be done at a time and place granted by India. To carry out an inspection, U.S. officials would need the recipient state’s assistance, including on the equipment’s location. So surprise inspections are precluded anyway. To prevent U.S. personnel from visiting sensitive military sites, the Indian government intends to move U.S.-origin defence equipment to a non-sensitive place before any inspection — an onerous task that at times may involve removing a U.S.-sold system from the platform into which it has been integrated.

No less significant is America’s right to check that India is using any purchased weapon for the purpose for which it was intended. This may mean that a system bought by India to bolster defences against China cannot be deployed against Pakistan, still a valued strategic pawn for U.S. policy. EUMA gives the U.S. the “right to verify” that a transferred system was not being used for purposes other than those agreed upon. Change in the end-use of any U.S.-origin component or system without Washington’s authorisation will constitute a EUMA violation.

It is such restrictions that had prompted the Indian Navy chief last year to publicly reject EUMA as too “intrusive.” The U.S., on an ad hoc basis, already has included end-use rights for itself in the recent defence contracts. In a March 2008 report, the CAG had castigated the grant of such rights, pointing out that the contract for USS Trenton — a 1971-vintage, problem-plagued amphibious transport ship bought by India in 2007 for $50 million — contains even “restrictions on the offensive deployment of the ship.” Now, EUMA, with its comprehensive end-use stipulations, will serve as the umbrella arrangement covering all future defence deals.

Yet, despite the misgivings expressed within and outside the officialdom, a tongue-tied Indian government has shied away from taking Parliament into confidence, with the External Affairs Minister’s July 21 statement in both Houses containing just two sentences on EUMA. Shouldn’t the Prime Minister explain to Parliament how an agreement designed by the U.S. for client states meshes with India’s strategic autonomy and its right of unfettered deployment and use of weapons bought with hard cash? The government bill proposing that Indian taxpayers assume main nuclear-accident liability, with foreign vendors’ maximum liability limited to a mere $62 million, will give Parliament finally a chance to examine the nuclear deal and its connection to accords like EUMA.

Although India is America’s strategic partner, not an ally that is supposed to follow the alliance leader, the U.S. is attempting to co-opt India in a “soft alliance” through assorted arrangements. The 2005 defence framework accord, with its emphasis on U.S. arms sales, force interoperability and intelligence sharing, was designed to build India as a new junior partner (or spoke) in a web of interlocking bilateral arrangements that fit together with America’s hub-and-spoke global alliance system. The subsequent nuclear deal, with its elaborate terms extending beyond the nuclear realm, was an initiative in the same direction that helped give birth to EUMA, which incorporates both routine inspections and “enhanced” end-use monitoring. It seems odd, though, that U.S. policy should attempt to mould India into a “soft” ally in a world in which some of America’s old allies are seeking to discreetly reclaim their foreign-policy autonomy.

Make no mistake: The U.S. has imposed EUMA on states that are under its security protection or classified as allies. But India is a notable exception as the only EUMA-accepting country that has a special defence relationship with Russia, which is transferring to India strategic systems America will not even consider selling — from a nuclear attack submarine to an aircraft carrier. China complains Russia won’t sell it the same class or quality of weapons it gives India.

A close, mutually beneficial relationship with the U.S. is in India’s interest. But as India gets sucked into the U.S. strategic dominion through EUMA and other arrangements — with the Communications Interoperability and Security Memorandum of Agreement (CIS MoA) next on Washington’s list, along with the Mutual Logistic Support Agreement (MLSA) — its special relationship with Moscow is bound to change. If America can merrily sell growing quantities of arms on both sides of the subcontinental divide and yet get New Delhi to accept restrictive measures, an economically struggling Russia has little incentive to stick to its traditional policy of not exporting arms to Pakistan. And with India hopelessly dependent on conventional-arms imports to meet basic defence meets, this means a rougher Indian defence-procurement trajectory in the years ahead. After all, as the pattern of current arms sales and offers underscores, American transfers are intended not to help India gain a combat edge but to promote regional military balance and U.S. leverage.