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January 24, 2011 

BIS Issues Final Rule Implementing Changes to Export Controls on India

The Commerce Department' Bureau of Industry and Security (BIS) will publish a final rule in tomorrow's Federal Register implementing changes to U.S. export controls on India that were announced by President Obama and Indian Prime Minister Singh on November 8, 2010. The changes announced in the final rule will go into effect on January 25, 2010.

As expected, the final rule amends the Export Administration Regulations (EAR) as follows:

Removal From Certain Indian Organizations From Entity List
The final rule removes the following Indian entities from the Entity List:

A. Bharat Dynamics Limited
B. Four remaining subordinates of the Defense Research and Development Organization (DRDO):

  • Armament Research and Development Establishment (ARDE)
  • Defense Research and Development Lab (DRDL)
  • Missile Research and Development Complex
  • Solid State Physics Laboratory
C. Four remaining subordinates of the Indian Space Research Organization (ISRO):
  • Liquid Propulsion Systems Center
  • Solid Propellant Space Booster Plant (SPROB)
  • Sriharikota Space Center (SHAR), and
  • Vikram Sarabhai Space Center (VSSC).
The removal of these nine Indian entities from the Entity List eliminates the existing
license requirements for exports, reexports, and in-country transfers to these entities.

The parties named on the Entity List associated with India's Department of Atomic Energy, including India's nuclear reactors, will remain on the Entity List for the foreseeable future and an export license is required to export or reexport all items subject to the EAR to such entities. BIS has a case-by-case licensing approval policy for controlled items and a presumption of approval for EAR99 items.

India Moves to Country Group A:2 From Country Groups D:2, D:3 and D:4

The final rule removes India from Country Groups D:2, D:3, and D:4 in Supplement No. 1 to part 740 of the EAR and adds India to Country Group A:2, the group consisting of countries adhering to the Missile Technology Control Regime.

While this change will result in the elimination of license requirements to export or reexport certain controlled products to India, this change will not change licensing policy toward India for items included in the Commerce Control List that are controlled for nuclear nonproliferation reasons (NP1). As a result, a license will still be required to export or reexport NP1 controlled items to all destinations in India. In addition, an export license to India will still be required for items controlled for missile technology (MT) reasons.

Exports to India of items classified as EAR99 (the designation for items not on the Commerce Control List) can take place without having to obtain an export license from BIS. Of course, no unlicensed exports can be made to prohibited parties or for prohibited end-uses.

It is important to note that these changes have no impact on the export of defense articles to India subject to the jurisdiction of the International Traffic in Arms Regulations (ITAR). An export license from the Directorate of Defense Trade Controls is required to export all items to India that are subject to the jurisdiction of the ITAR and the Arms Export Control Act.

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