A great American arms bazaar

A great American arms bazaar

Context:

U.S. President’s attempt to rework arms transfer policy provides for an opportunity for India

What is the existing policy on arms sale in U.S.?

• Arms transfers by U.S. happen primarily through Foreign Military Sales, Direct Commercial Sales, and Foreign Military Financing
• These are controlled by stringent laws like Arms Export Control Act
• Sale of arms is guided less by commercial considerations rather than strategic ones

Why is arms transfer important for U.S.?

• It is a key leverage of global influence
• It reduces the cost of procurement for the U.S. military by spreading the cost, and by employing 1.7 million people
• the defence industry is a key component in U.S. economy and politics

What changes do President Trump want to bring?

• Trump emphasizes commercial benefits of arms sale and de-emphasize the strategic angle
• He wants to reduce the Foreign Military Financing to the least, except for Israel.
• Further, he wants American partners to buy more weapons from it.
• This is also a move towards reducing trade deficits with key partners such as South Korea and Japan.

How would this benefit India?

• Change in U.S. arms policy is expected to change dynamics of India-U.S. defence trade
• India is expected to be more comfortable with weapons purchases as commercial deals
• For U.S. India could emerge as a reliable, non-proliferating buyer of its arms