The US has submitted a draft ISA to the defence ministry and is waiting for India to respond, said one of the officials

The two sides announced their readiness to start negotiations on an Industrial Security Annex (ISA) to shore up defence cooperation during the inaugural 2+2 dialogue last September.

After concluding two foundational agreements to strengthen military cooperation in the past three years, India and the United States are inching closer to finalising a new pact to deepen defence industry collaboration, two officials said on condition of anonymity.

The two sides announced their readiness to start negotiations on an Industrial Security Annex (ISA) to shore up defence cooperation during the inaugural 2+2 dialogue last September.

The US has submitted a draft ISA to the defence ministry and is waiting for India to respond, said one of the officials. The conclusion of the ISA will allow the US government and American original equipment manufacturers (OEMs) to share classified information with local private defence firms.

Currently, the US can share such information only with the Indian government and public sector undertakings under the General Security of Military Information Agreement (Gsomia) signed 17 years ago.

“Signing an annexure to Gsomia will allow the US government and American companies to share classified information with the Indian private sector. It is expected to provide impetus to the Make in India programme,” said the second official.

India is looking at building fighter jets, next-generation submarines, helicopters and armoured vehicles locally under the strategic partnership (SP) model that seeks to provide a boost to the Make in India programme. The SP model envisages local manufacturing of major defence platforms by Indian strategic partners who will collaborate with foreign OEMs to set up production facilities in the country. US firms are competing for projects to build fighter jets and helicopters in the country.

“The ISA will be a step forward towards transfer of sensitive technology from the US to the Indian private sector while ensuring it remains protected. It will help improve the technology level of the local industry,” said Air Vice Marshal Manmohan Bahadur (Retd), additional director general, Centre for Air Power Studies.

India and the US signed the Logistics Exchange Memorandum of Agreement (LEMOA) in August 2016, allowing the two countries to provide logistics support to each other’s fighter planes, warships and personnel. Another key pact, the Communications Compatibility and Security Agreement (COMCASA), was signed by India and the US last September at the 2+2 dialogue.

Both LEMOA and COMCASA were delayed for years as New Delhi bargained hard for getting its concerns addressed before inking the sensitive pacts. The India-specific COMCASA has in-built safeguards to secure India’s national interests with complete access to equipment to make sure there is no disruption.