India’s Upgrade in Export Control Status and Bid to Enter ‘Dual Use’ Controls Club Point to Expansion of Non-Proliferation Efforts

February 2, 2017
By: Anna Sayre, Legal Content Writer,

On January 19, 2017, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to implement a new phase of export control cooperation between the U.S. and India.

The new rule marked the first major change to India’s “Validated End User” (VEU) status since July 2009 and follows recognition of India by BIS as a “Major Defense Partner” on June 7, 2016.

This upgrade in export controls status is in line with India’s approach to the broader non-proliferation cooperation effort that started in November 2010 when then-President Barack Obama announced U.S. support for India’s bid to join the Wassenaar Arrangement (WA), as well as the Nuclear Suppliers Group (NSG), and Australia Group (AG).

VEU Program

BIS’ recent amendment to the EAR expanded the scope of its export licensing policy by applying general license approval for exports, re-exports, and transfers within India of certain items subject to the EAR as well as by allowing military end uses for the first time under the “Validated End-User” (VEU) authorization program.

VEU status for India reduces the licensing burden on the industry by allowing U.S. exporters to ship designated items to pre-approved entities under a general authorization instead of under multiple individual export licenses. Being approved for VEU status enables entities in VEU-approved countries to receive U.S.-controlled products and technologies more easily, quickly, and reliably.

Entities that will benefit the most from participation in the VEU program typically are those that place orders for dual-use items classified on BIS’ Commerce Control List (CCL), such as chemicals and electronic components, on a regular basis with U.S. exporters. Normally, VEU status is most easily obtained by entities that already maintain export compliance systems and are experienced in complying with U.S. export control laws and regulations.

Under the new rule, items obtained under VEU authorization in India may be used for either civil or military uses, as long as those uses do not involve nuclear, missile, chemical, or biological weapons.

Bid To Join Wassenaar

The WA is set up to promote transparency in transfers of conventional arms and dual-use goods and technologies, like computers and telecommunications equipment, to countries like Iran, Iraq, Libya and North Korea.

Since its bid for membership to the WA, India has endeavored to shift its laws and export control policies to match the international community. If the bid to enter the WA is successful, India would be the first South Asian or Southeast Asian country to join the global group.

The Wassenaar Arrangement Explained

The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies came into operation two decades ago, in 1996.

According to its founding document, the WA was “established in order to contribute to regional and international security and stability, by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies”, namely in order to keep such items out of the hands of terrorists.

A ‘dual-use’ item is usually termed as such because it can have both non-military ‘innocent’ applications, as well as military applications. For example, a radio frequency module, or piece of equipment used to transmit signals between two devices, could be used in a mobile phone, however, it is identified as ‘dual use’ because of its equal ability to detonate a bomb. More often than not, dual use items cannot be exported without the permission of the government.


In addition to the 33 founding members, among which the U.S., there have been eight member countries allowed to join the WA in the last two decades, the last being Mexico in 2012. China is not a member.

To be admitted to the WA, a state must:

  • Be a producer/exporter of arms or industrial equipment respectively;
  • Maintain non-proliferation policies and appropriate national policies, including adherence to relevant non-proliferation regimes and treaties; and
  • Maintain fully effective export controls.

In a joint statement by the U.S. and India on June 7, 2016, the countries reaffirmed their commitment to prevent proliferation of weapons of mass destruction. In addition, the U.S. re-affirmed its support for India’s membership to the WA.

For more background on the WA, its inception, and its 41 members in an earlier article, click here.

India’s “Big Shift”

According to Junior and Senior Fellows at the Observer Research Foundation, Arka Biswas and Dr. Rajeswari Pillai Rajagopalan, in their paper entitled ‘Wassenaar Arrangement: The Case of India’s Membership’, “India’s own approach to technology export control regimes has undergone a big shift in recent years. As India’s international interests have grown, so has its interest in becoming a member of the four main non-proliferation groups.”

Accordingly, India has begun making serious efforts at meeting the technical requirements of each of these regimes. It has already implemented the guidelines of these regimes in so far as domestic legislations are concerned, and is now in the process of harmonizing its control list, or SCOMET list, with the control lists of these regimes.

India has also made efforts to match its domestic export control policies with that of the WA. In August 2015, India announced a list of 16 categories of defense equipment on which the export control regulations will be applicable. In June 2016, India was formally recognized as the 35th member of the MTCR, the international export control regime that focuses on the prevention of missile proliferation. India has also signed and ratified the Biological and Toxicological Weapons Convention (BTWC) and Chemical Weapons Convention (CWC). Though it has yet to become a member of the Non-Proliferation Treaty (NPT), India has continually adhered to its principles and has fulfilled all commitments that other nuclear weapon states under the Treaty have met.

In addition to WA, India is also seeking membership in three other Non-proliferation export control regimes: Australia Group (AG), Missile Technology Control Regime (MTCR), and Nuclear Suppliers Group (NSG).

Trading Possibilities

The recent amendments to the EAR, and – subject to approval – membership in the WA would open up India’s access to and trading possibilities regarding dual-use technologies within: aerospace, telecommunications, navigation, computing, electronics, sensors and lasers.

According to Kevin Wolf, former Assistant Secretary of Commerce for Export Administration and Partner at Akin Gump Strauss Hauer & Feld LLP, “the new rule concluded the Obama administration’s steady efforts toward enhancing defense and security cooperation with India. Although the preparation and submission of an application to become a VEU takes some effort, becoming a VEU can significantly reduce regulatory burdens and delays for those entities that have, or expect to have, a significant volume or regular trade with the United States in controlled items. Expanding the VEU program to include the production of military and other items in India will encourage Indian companies to participate in the program and, thus, further enhance the defense, aerospace, satellite and other trade relationships with the United States.”

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