For India, getting a presidential waiver from the biting CAATSA sanctions might not be that easy, some American experts believe referring to the changing political dynamics within the administration and President Donald Trump’s personal strong views against New Delhi’s trade and tariff policies and calling it a “tariff king”.
Under the CAATSA which was signed into law last year, India is subject to sanctions now that it has entered into an agreement with Russia to purchase S-400 Triumf missile defence system in $5.4 billion, which is considered by the U.S. as a significant purchase.
The Countering America’s Adversaries Through Sanctions Act or CAATSA gives the Trump administration more ways to target Russia, Iran and North Korea with economic and political sanctions.
'Major defence partner'
Only last month, U.S. had used CAATSA to impose sanctions on Chinese entities for purchase of S-400. Friends of India in the U.S. hope that New Delhi will receive a presidential waiver, given that Trump Administration has recognised India as a major defence partner and is in advance stage of selling billions of dollars’ worth of equipment to India in the next few years.
Congressional sources say that both Defence Secretary Jim Mattis and Secretary of State Mike Pompeo pushed for a presidential CAATSA waiver keeping India in mind. But the final decision will be taken by Mr. Trump, who in the last several weeks has been very critical of India’s trade and tariff policies.
Last week, Mr. Trump described India as a “tariff king” and said India wants to have a trade deal with the U.S. after he warned them of imposing additional tariffs on their imports. His latest statements have made some experts feel that the presidential waiver might not be that easy.
“At the very least, the administration will likely use the possibility of a sanctions waiver as leverage over India in other trade disputes. India may get the waiver in the end, but the administration will likely extract something for it. We just don’t know what yet,” a Republican Congressional watcher told PTI .
'Decision up to the administration'
Anish Goel, who served in the Obama White House and was a key staffer of the Senate Armed Services Committee for several years, said that National Defence Authorisation Act (NDAA) 2019 does not automatically grant a waiver from sanctions for India’s defence purchases from Russia.
“The language is non-country specific and merely gives the Administration the authority to grant a waiver if it desires. The ultimate decision is up to the administration,” said Mr. Goel, senior fellow at New America think tank.
“In this case, obtaining such a waiver is not a foregone conclusion. While Mattis is likely a strong supporter of granting one, and many believe he advocated for the legislation because of India’s unique situation, there are others in the administration who will oppose giving India special treatment, particularly when it comes to the proliferation of the S-400. It is hard to predict whose arguments will win out,” Mr. Goel told PTI in response to a question.
Bharat Gopalaswamy from Atlantic Council think tank hoped that India will finally get the presidential waiver given the strong relationship that the two countries have.
“I am hopeful that the U.S. would grant India the necessary waiver acknowledging the fact that India is on a positive trajectory towards getting closer to the U.S. and these issues are just a ‘passing cloud’,” he told PTI .
“As we are all aware, India has had a path dependency with Russia for the supply of their military hardware. While India is diversifying their sources of military supplies, in the short run, it is resorting to systems from Russia to ensure that its security is not compromised,” he said.
“We have to remind ourselves that U.S.-India relationship in this sphere is less than two decades because in 1998 India was a target of U.S. sanctions. I also understand that India had fewer alternatives,” he noted.
'Administration will not look too kindly on India's actions'
But some Congressional sources who closely follow the Trump Administration are quick to point towards the changing dynamics inside the administration.
Based on Mr. Mattis’s strong advocacy for the CAATSA waiver authority in this year’s NDAA, the Indian government likely believes that obtaining a waiver from the sanctions will be relatively straightforward, an informed Congressional source said.
“I don’t know if this played any role in India’s decision to move ahead with the S-400 purchase, but it’s possible that India felt safe that the purchase would not harm U.S.-India relations or incur CAATSA-related sanctions,” said the source.
“However, whether India actually gets the waiver will largely be up to National Security Advisor [John] Bolton, who has long been against giving India any special treatment,” sources told PTI .
“In addition, the Trump administration has stated that limiting proliferation of the S-400 missile system is one of their strategic priorities, and recently levied sanctions against China for its purchase of the S-400. It is certainly within the realm of possibilities that the administration will not look too kindly on India’s actions and decide to levy sanctions against India,” the Congressional source said.
“In the end, I think it will come down to who has more influence in this debate — Mattis or Bolton. [Pompeo’s personal position is a bit unclear.] I don’t know the answer to that question — Mattis’s star seems to be fading just a touch and Bolton seems to be ascendant and taking over foreign policy formulation. So it’s quite possible that India’s faith in getting a waiver is mistaken,” the sources said.
