The US Secretary of Defense Chuck Hagel has arrived in New Delhi on a three-day visit a day after Union Cabinet approved a cap in foreign direct investment (FDI) from 26 per cent to 49 per cent. This was one of the promises made by Finance Minister Arun Jaitley in his maiden Budget speech.
Besides Jaitley, Hagel will meet Prime Minister Narendra Modi, External Affairs Minister Sushma Swaraj and National Security Advisor Ajit Doval.
Hagel is the third US Secretary after Secretary of State John Kerry and Secretary of Commerce Penny Pritzker to visit India in the last one month. The US seems to be making all-out effort to make the 'environment conducive' before Modi's visit to the US on September 29-30.
Indian functionaries privy to the discussions say Modi is very firm about increasing domestic manufacturing of defence equipment. The US will have to think along this line and co-produce equipment.
The technology transfer norms of the US are one of the toughest but the US authorities are determined to make it easier in certain cases. It is expected that the US may offer 17 technologies.
According to former foreign secretary Kanwar Sibal, it has to be seen what sort of technologies the US wants to transfer and its utility for India. "There are other players in the market like Israel, Russia, France and Germany. Things will have to evaluated accordingly," he says.
Hagel will also meet senior executives of Indian companies like L&T, Tata Sons, Reliance Industries, Mahindra Group, Bharat Forge and Pipavav. He will also meet executives of US companies in India such as Honeywell, Raytheon, BAE Systems and Textron.
Experts say the US may prefer to work with Indian private players over PSUs such as BHEL. Agencies report that defence deals worth over Rs 20,000 crore, which includes move to buy 22 Apache attack helicopters, 15 Chinook heavy-lift choppers and four P-81 anti-submarine aircraft, intelligence sharing on counter-terrorism activities and steps to strengthen military ties are likely to discussed in the visit. India on its part too is looking forward to partner with the US companies in future technologies.
Though nothing concrete is likely to come up out of the meetings, Hagel's visit is largely seen as the US establishment reaching out to the Modi regime. The US laws require details intelligence clearances even for the joint ventures and sub-contracts. The US rules for foreign military sales (FMS), unlike India, does not require bidding.