Identifier
Created
Classification
Origin
07CHENNAI565
2007-09-13 11:34:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Chennai
Cable title:  

INDIAN AEROSPACE ORGANIZATIONS TIE "RESTRICTIVE" LICENSING

Tags:  PREL CVIS ETTC KFPC ETRD ESTH BEXP EIND IN 
pdf how-to read a cable
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RR RUEHBI RUEHCI
DE RUEHCG #0565/01 2561134
ZNR UUUUU ZZH
R 131134Z SEP 07
FM AMCONSUL CHENNAI
TO RUEHC/SECSTATE WASHDC 1200
INFO RUEHNE/AMEMBASSY NEW DELHI 2759
RUEHBI/AMCONSUL MUMBAI 5107
RUEHCI/AMCONSUL KOLKATA 0837
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEKJCS/SECDEF WASHDC
UNCLAS SECTION 01 OF 02 CHENNAI 000565 

SIPDIS

STATE FOR T/ISN/CATR
STATE PASS TO USTR ADINA ADLER AND CLAUDIO LILIENFELD
STATE PASS TO COMMERCE ART STERN AND MICHAEL DIPAULO-COYLE

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PREL CVIS ETTC KFPC ETRD ESTH BEXP EIND IN
SUBJECT: INDIAN AEROSPACE ORGANIZATIONS TIE "RESTRICTIVE" LICENSING
AND VISA PROCEDURES TO MRCA

UNCLAS SECTION 01 OF 02 CHENNAI 000565

SIPDIS

STATE FOR T/ISN/CATR
STATE PASS TO USTR ADINA ADLER AND CLAUDIO LILIENFELD
STATE PASS TO COMMERCE ART STERN AND MICHAEL DIPAULO-COYLE

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PREL CVIS ETTC KFPC ETRD ESTH BEXP EIND IN
SUBJECT: INDIAN AEROSPACE ORGANIZATIONS TIE "RESTRICTIVE" LICENSING
AND VISA PROCEDURES TO MRCA


1. (SBU) Summary: High-level representatives of the Indian Space
Research Organization (ISRO) and Hindustan Aeronautics Limited (HAL)
recently complained to us about delays in receiving visas and in
obtaining export licenses for equipment purchased from the United
States. HAL told us that it will play the lead role in evaluating
bids for the Indian Air Force's (IAF) recent tender for the
multi-role combat aircraft (MRCA). Both Boeing and Lockheed Martin
will compete for this USD 10.4 billion contract, reportedly the
world's most lucrative defense sales contract since the 1990s.
Local perceptions that U.S. export controls and visa rules
unnecessarily restrict the business operations of these elite Indian
institutions may hamper U.S. companies' chances of winning this
contract. End Summary

HAL lets us know what's at stake
--------------


2. (SBU) Consulate General staff visited HAL on August 30 and spoke
with Ashok Nayak, a HAL board member and Managing Director of its
Bangalore Headquarters. (Note: HAL is a government-owned company
that designs and produces aircraft for India's military. End Note.)
Nayak said HAL was growing increasingly frustrated with the
unpredictability of the U.S. export licensing system. He complained
that some orders received licenses quickly while others languished,
disrupting HAL's assembly lines. "This is no way to run a
business," he said.


3. (SBU) Nayak also complained about delays in issuing visas to
members of his staff who need to make business trips to the United
States on short notice to meet with HAL's partners. He mentioned
two staff members who are currently waiting for a visa to conduct
urgent business in Houston. (Note: Nayak was referring to delays

associated with VISAS MANTIS security advisory opinion (SAO)
procedures -- required of practically all HAL employees -- not
delays in obtaining interview appointments. We asked Nayak to
e-mail Consulate Chennai the names of these applicants. After not
hearing from Nayak for nearly a week, we contacted his staff, who
told us that there were no pending visa applications for HAL
employees. End Note.)


4. (SBU) Nayak, armed with talking points carefully laid out in
front of him, emphasized that HAL will play the key role for the
Indian government in assessing the MRCA bids. While unfailingly
polite, he was not interested in hearing our explanations about the
complexity and time-intensive work that goes into processing visas
and export licenses. (Note: As if to emphasize how he believes
"strategic partners" should treat each other, he ordered the literal
red-carpet treatment for us as we visited the production lines for
both fixed- and rotary-wing aircraft at HAL's Bangalore complex.
End Note.)

ISRO has other options, too
--------------


5. (SBU) We also met with Jacob Ninan, the Director of International
Cooperation for ISRO, India's version of NASA. During our August 28
meeting, Ninan also complained about delays in obtaining export
licenses for electronic components used on satellite systems. He
said that ISRO considered the delays and unpredictability of license
issuance as a "broken commitment" on the part of the USG. He said
that the "Next Steps to Strategic Partnership" agreement clearly
laid out a framework that ensured expeditious clearance, but ISRO
saw no changes on the ground. He also said that ISRO had a
commercial launch services agreement (CLSA) with the EU, and asked,
"Why did the U.S. Trade Representative kill our CLSA with the United
States?" Ninan said that the USG "needs to know us better," which
would make U.S. institutions more comfortable in working with their
Indian counterparts and facilitate the issuance of export licenses.

Comment
--------------


6. (SBU) HAL's Nayak did not directly link his complaints with the
MRCA tender, but his message was clear: "partners" do not treat
each other like this. Both HAL and ISRO feel that they ought to be
seeing more benefits from the deepening U.S.-India relationship and
are irked that they are still being treated like everybody else.
Nayak may also bear something of a personal grudge against the
visa-processing system, as he had to wait for a couple of weeks for
his SAO to come through when he applied for a visa two years ago.
Contacts tell us he took this delay as a personal slight (even
though the adjudicating officer explained the situation and the

CHENNAI 00000565 002 OF 002


procedures involved).


7. (SBU) We recognize that there is little chance that either visa
or export control procedures can (or should) be altered because of
these complaints, but we need to be aware that these important
Indian institutions believe that they should be treated differently
than in the past. We also need to remain aware of these perceptions
as the bidding process for the MRCA begins in earnest, as these
perceptions are likely to impact bidding U.S. companies Boeing and
Lockheed Martin as well as other U.S. businesses seeking defense,
technology, and aerospace deals. We should look for other ways to
engage HAL and ISRO to demonstrate our recognition of the talents of
these elite institutions, perhaps by encouraging reciprocal visits.

HOPPER