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US sanctions will adversely affect prospects of both countries
The economic sanctions mandated under the Glenn Amendment in the wake of nuclear tests will not preclude all US trade with India but adversely affect the prospects of both countries, said Under Secretary of Commerce for International Trade David Aaron. While he was doubtful the sanctions would cripple India's economy and economic development, he pointed out, they would nevertheless diminish the ability of US companies to pursue projects in India and block new financing by international financial institutions. Testifying before a congressional panel on Asia and the Pacific during its special hearing on India-Pakistan nuclear proliferation, he said the approach had been to implement sanctions in a way that was most likely to influence the affected governments, while minimising to the extent of the impact on US business and labour and the populations of these countries. While the sanctions would allow some trade and commerce with the two countries to continue, he pointed out, they would preclude the export of selected items, and US government financial assistance to American companies for exports and projects in India and Pakistan. With regards to Pakistan, Aaron said the impact of the sanctions, which were identical to those imposed on India had the potential to be much more severe because of its daunting economic problems. He outlined the commerce department's bureau of export administration (BXA) would prohibit the export of dual use goods and technology, subject to export licensing. He said the BXA would deny exports of dual-use items controlled for nuclear or missile non-proliferation reasons under the export administration act to all end-users in India and Pakistan -- with the exception for commercial aircraft safety and maintenance equipment, and for computers above 2,000 mtops which would be controlled under the export administration act for national security purposes. The US would also publish a list of Indian and Pakistani government entities involved in military activities and will require license, with a presumption of denial, for all items controlled by the export administration regulations with the exception of common use item. He said private entities supporting the nuclear or missile programmes under the enhanced proliferation control initiative would also be identified. This will result in a broader licensing requirement for those entities with a case-by-case review of such licenses and a presumption of denial for transactions that would support prohibited activities, he added. The principal exports to India included aircraft and aircraft parts, computers and components, and chemicals. US’s principal imports from India included textiles and apparel, diamonds and jewellery.