India-US defence trade gets a boost as new agreements set the stage for enhanced collaboration
India and the US have signed two crucial defense agreements—the Security of Supply Agreement (SOSA) and the Assignment of Liaison Officers Agreement (ALO)—during Defence Minister Rajnath Singh's visit to Washington.
In a major step to strengthen defense relations, India and the United States have finalized two pivotal defense agreements during Defence Minister Rajnath Singh's visit to Washington. These agreements are set to boost the integration of the defense industries in both countries and enhance their supply chains, ensuring a more secure and resilient flow of defense components. The agreements, the Security of Supply Agreement (SOSA) and the Assignment of Liaison Officers Agreement (ALO), were initially proposed during Prime Minister Narendra Modi's visit to Washington DC last year. With their formalization during Singh's visit, they are expected to improve cooperation and readiness between the two nations' defense sectors.
The Security of Supply Agreement stands out as it provides reciprocal priority support for defense goods and services. This arrangement will enable both countries to efficiently acquire essential resources from each other, reducing the risk of disruptions in the defense supply chain. The US Department of Defense has emphasized that this agreement will be vital in ensuring rapid access to critical defense components when needed, with companies on both sides pledging to prioritize national security interests.
The second agreement, the Memorandum of Agreement on Assignment of Liaison Officers, aims to enhance joint service cooperation and real-time information sharing between the US and India. This will lead to better coordination and operational synergy between the defense forces of both nations, further strengthening their strategic partnership.
The significance of these agreements is highlighted by the fact that the US is now the leading destination for India's defense exports. Recent data shows that 50% of India's defense exports, including small components, are directed to the US.
Over the past five years, India's defense exports to the US have exceeded $2.8 billion, reflecting a strong and expanding defense trade relationship. The new agreements are expected to further open up opportunities in this sector.
Additionally, Rajnath Singh is advancing discussions on a major $1.8 billion deal for manufacturing GE F414 engines in India. This initiative, anticipated to gain traction during his visit, represents a key move in bolstering India's defense manufacturing capabilities and deepening the integration of the defense industries of both countries.
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