Wednesday, 29 July 2009

India had signed two earlier End User Agreements

(Photos: Nehru and Vijaya Laxmi Pandit with President Eisenhower in the United States. Two End User Monitoring (EUM) Agreements were signed in the 1950s between India and the US)

by Ajai Shukla
Business Standard, 29th July 09

The furore over the recently announced End User Monitoring (EUM) Agreement between and the United States provides the reason why EUM agreements have always been kept out of public view. The text of this one remains secret. Business Standard has learned that it was the US State Department that insisted on secrecy.

This agreement is the third “standard” US-India EUM Agreement, which will apply to all defence equipment sourced from the US. The first was concluded in 1951, followed by a second in 1958. Both of those were formalised through an exchange of secret diplomatic notes. This time, too, there is no signed agreement, only an exchange of diplomatic notes in which India accepts and confirms the agreement.

The first EUM Agreement was finalised in 1951, when the US considered India a useful ally against communism, particularly that emanating from China. India needed weaponry; the US agreed to supply it under the Mutual Defense Assistance Agreement of 1949.

On 7th March 1951, the US State Department wrote to Vijaya Laxmi Pandit, then India’s ambassador to Washington, seeking confirmation that US permission would be obtained before transferring US equipment to a third party, and also “retaining the privilege of diverting items of equipment or of not completing services undertaken if such action is dictated by considerations of United States national interest.”

The State Department letter noted that “A reply to the effect that these understandings are correct will be considered as constituting an agreement between the Government of the United States of America and the Government of India, which shall come into force on the date of the note in reply from the Government of India.”

Nine days later, on 16th March 1951, Vijaya Laxmi Pandit confirmed that India was “in agreement with the terms, conditions and assurances proposed.”

The second EUM Agreement followed a similar process, after a new channel for American military aid, the Mutual Defense Agreement of 1954, superseded the earlier Mutual Defense Assistance Agreement, 1949. On 16th April 1958, America’s officiating ambassador in New Delhi, Winthrop Brown, wrote to Jawaharlal Nehru (who was Foreign Minister as well as PM) proposing that the agreements signed by Vijaya Laxmi Pandit be extended to this pact. On 17th December 1958, Foreign Secretary, S Dutt, wrote to the US ambassador conveying India’s acceptance.

Like both those EUMs, the current agreement too exists only in the form of an exchange of notes between India and the US. But the Indian negotiators of the latest agreement have apparently managed to strike off the earlier draconian provisions.

Senior government officials who were party to the negotiations recount that the biggest hurdle was India’s insistence on “verification” of US equipment, rather than “physical verification”. This would allow India to present photos or videos of the equipment, instead of the equipment itself. Washington, however, refused to accept anything less than “physical verification”, which US law mandated. The deal was struck when the US conceded that physical verification need not take place in forward operational locations, and that the date and time would be mutually settled.

During the negotiations, the US argued forcefully that it would never be asking India for inspections anyway. Indian MoD officials pointed to the intrusive inspections the US regularly carries out in Peshawar of night vision equipment supplied to the Pakistan Army. But the US negotiators responded, “This is not what we do with democracies. We trust democracies”.

The final stumbling block was over the phrase “legitimate self-defence”, which is the only circumstance in which India can use US-supplied weaponry. Indian negotiators were concerned that, if India used US-supplied C-130J aircraft to drop paratroopers into another country, in a Maldives-type operation, would it qualify as “legitimate self-defence”? The US side pointed out that it was using aircraft in Afghanistan and Iraq in what it considers legitimate self-defence.

Indian officials are triumphant at having removed a clause in the draft that would have applied future US legislation to sales made to India. The 1958 agreement, for example, applied to, “the Mutual Security Act of 1954, that Act as amended from time to time, and such other applicable United States laws as may come into effect.” This time around, retrospective applicability will not apply.


Rafale said...

Hi Ajai,
I came across your blog a few days ago. I have been hooked to it ever since.I love reading about weapon systems & defense related stuff.Any chance you could bring out a blog covering the Indian MRCA contenders,& your own take on who should emerge the victor keeping in mind the operational needs of the IAF & the needs of the indian aerospace industry.

Ajai said...

Rafale, would have loved to do that, but I'm too busy already with my regular reporting. And all of that comes out on the blog.
However, I will be writing on the MMRCA during the course of my regular reportage.

Ju² said...

Hi Ajai,
Thanks for this perspective and the precision about the recent negotiations.
One thing sounds curious however. How can we explain the terms of the EUMA has taken so much time to be officially agreed, while the government has already bought 8 P-8I maritime patrol aircraft (ok, it was a direct commercial agreement with Boeing, that let some time to negotiate the EUMA), 6 C-130J, 3 B737 VVIP and the USS Trenton amphibious ship?
Maybe am I wrong, but usually we buy such equipment after being informed of the use that can be done... not before.
BTW, by agreeing these new terms, the US are now allowed to "really" participate in the MMRCA tender.

Anonymous said...

My personal opinion is that India shouldn't sign any end-user agreement. Once sold, it's sold... how can the US seek to tell another sovereign nation how and when it can use US equipment after it's been paid for? Ridiculous. Such an agreement should only apply to WMDs, or genocide, or cases where human rights violations occur...

Why should India be shackled by US laws? We're so foolish to let other nations undermine our independence in this way. Successive Indian governments have been happily selling out, and the reason they do it is because our our nation is unwilling to build and fight with our own indigenous equipment.

Anonymous said...

रफाल जीतेगा अगर यह बहुत मँहगा भी है,मानो चाहे ना मानो

Anonymous said...

This is not what we do with democracies. We trust democracies”.
when did americans trusted india in last 45 years?

they don't even trust their own allies

Broadsword said...

Juju, each of the recent deals had a deal-specific EUM Agreement that was negotiated --- with great difficulty --- between India and the US.

Ju² said...

Yes Broadsword, you are totally right. EUM conditions are, each time, enclosed in FMS deals (so not the P-8I contract). You sign the deal, so you agree with verification clauses.
A priori, the US have not been specially generous during the last EUMA negotiations because, if what we can read in the press is right, they have already agreed with a slight-verification regime since June 2008 when the 3 Boeing 737 VVIP sale has been unblocked. It seems that the US agreed this time not to set any verification in peace time. I think we can see the agreement reached with Obama Administration in the wake of this previous arrangement. I don't think the last agreement contains many new features except, maybe, the fact that the date of verifications will be scheduled by the two sides. But maybe this poit was also negotiated previously, since the sale of the former USS Trenton (INS Jalashwa now). Am I wrong?

Anonymous said...

LCA Tejas Updates & Pictures PLEASE

Anonymous said...

Good post.

Really good facts bought out at the time of commotion.

Further about the articles, we know the LCH flight was delayed, I guess it's more than 5 months for that news, any reports on the same?

deepak induraj said...

hi Ajay,

The prob;em in USA is the job loss.
The obama administration wants to stem the jobloss by any means.I am presently in US.The banks are cosing @2 per week, the economic situation is critical, we should have bargained harder for the EUMA. If not, we should bargain for the prices during the selection of dealer for the purchase.

Look at France wooing India to get a slice of the deals.We as a country should hold the French and others accountable for the delays in Scorpene deals and seek a profitable end state.We should be business minded in our approach and take advantage of the global necessities!!