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The sanctions cloud over India-U.S. ties

S-400 anti-aircraft missile launching system is displayed at the exposition field in Kubinka Patriot Park outside Moscow. File   | Photo Credit: AFP

The Chief of the Air Staff, Air Chief Marshal V.R. Chaudhari, recently said that the delivery of the S-400 Triumf air defence systems from Russia is expected according to schedule. In response, U.S. Deputy Secretary of State Wendy Sherman hoped that both the U.S. and India could resolve the issue. The “issue” here is that receiving the missile systems could attract for India sanctions under the Countering America’s Adversaries through Sanctions Act (CAATSA), enacted by the U.S. Congress. Ms. Sherman emphasised that the U.S. thinks it’s “dangerous” for “any country that decides to use the S-400”. India is scheduled to receive five squadrons of the surface-to-air missile systems under the $5.43 billion (₹40,000 crore) agreement it signed three years ago.

Enactment of CAATSA

Even though CAATSA was signed into law by then President Donald Trump in 2017, India stuck to its guns, signed the agreement with Russia a year later, and paid an advance in 2019. The missile systems were originally scheduled to be delivered between 2020 and 2023 and the supplies are expected to commence now. Both New Delhi and Washington have been in conversations over the deal. India has stressed on the tactical importance of the defence missile systems considering the environment in the Indian subcontinent.

 

The CAATSA was passed when the U.S. sought to discourage trade in the defence and intelligence sectors of Russia, a country perceived to have interfered with the 2016 U.S. presidential election. The Act mandates the President to impose at least five of the 12 sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors. These sanctions include suspending export licence, banning American equity/debt investments in entities, prohibiting loans from U.S. financial institutions and opposing loans from international finance institutions.

The Act also built in a safety valve in the form of a presidential waiver. This was written into the law after much persuasion and is interpreted as one crafted to accommodate countries like India. Policy planners on either side are aware of the law and the provisions to work around it. Ms. Sherman and Secretary of State Antony Blinken, who came to India earlier this year, cannot be expected to announce whether India can secure a waiver from President Joe Biden when the time comes for the White House to make a decision.

The “modified waiver authority” allows the President to waive sanctions in certain circumstances. He has to decide whether the move is in American interest; does not endanger the country’s national security; and affect its military operations in an adverse manner. In addition, he has to determine whether the country in question is taking steps to bring down its inventory of defence equipment from Russia and cooperating with Washington on matters of critical security. There are a few more provisions including one that allows for sanctions waivers for 180 days, provided the administration certifies that the country in question is scaling back its ties with Russia.

 

The debate in the U.S. hovers around the efficacy of such sanctions against India when the geopolitical situation in the region is undergoing a change. Today, there is a growing relationship between China and Russia with both countries seeking to expand engagement in Afghanistan from where the U.S. withdrew its military after two decades of war. India turned sullen over the manner in which the U.S. negotiated the exit deal with the Taliban. Yet, on the strategic plane, India remained on course by agreeing to the upgrading of the Quadrilateral Security Dialogue and sharing the same vision as the U.S. on the Indo-Pacific construct.

Sanctions have the tremendous potential of pulling down the upward trajectory of the bilateral relationship between the U.S. and India, which now spans 50 sectors, especially in the field of defence. The U.S.’s apprehension is that bringing India under a sanctions regime could push New Delhi towards its traditional military hardware supplier, Russia. Till about a decade ago, an influential segment of the Indian political leadership and top bureaucracy remained wary of deeper engagement with the U.S. Sanctions can stir up the latent belief that Washington cannot be relied upon as a partner.

 

Decrease in imports

Over the last decade, India’s military purchase from Russia has steadily declined. India’s import of arms decreased by 33% between 2011-15 and 2016-20 and Russia was the most affected supplier, according to a report by the Stockholm-based defence think-tank SIPRI. In recent years, though, there have been some big-ticket deals worth $15 billion including S400, Ka-226-T utility helicopters, BrahMos missiles and production of AK-203 assault rifles.

On the other hand, over the past decade, government-to-government deals with the U.S. touched $20 billion and deals worth nearly $10 billion are under negotiation. The U.S. designated India as a Major Defence Partner in 2016. It later gave India Strategic Trade Authorisation-1 which allows access to critical technologies. Today, manufacturers in both countries are exploring ways to co-develop and co-produce military equipment.

What next?

There are advocates in the U.S. who strongly favour imposing sanctions on India following the U.S.’s decision to impose restrictions on its NATO ally, Turkey. China was the first country to attract the provision after it procured the S-400. Should India be treated with a different yardstick? A section of influential lawmakers in the Democratic Party hold a different view.

There are three clear steps in this regard. The first is the presidential determination on waiver; the second is the referral to the Congressional Committees; and the third is clearance by these panels. While referral to the Armed Services is spelled out, it is a distinct possibility that this will be sent to the Senate Foreign Relations Committees. This powerful committee, headed by Senator Bob Menendez, wrote to Defence Secretary Lloyd Austin ahead of his visit to New Delhi in March this year that he must inform India of the perils of the deal, while a Republican, Todd Young, on the panel argued against it.

The CAATSA test will determine the course of the India-U.S. strategic partnership. Will the Biden administration sail through opposition within his party in allowing India a clear passage? While the administration will have to do the heavy lifting, the role of Indian-Americans should be significant just as they rallied around to support the historic Civil Nuclear Deal in the face of stiff resistance from Democrats opposed to nuclear proliferation.

K.V. Prasad is a journalist and former Fulbright-APSA Fellow with the U.S. Congress


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Printable version | Oct 21, 2021 1:31:41 AM | https://www.thehindu.com/opinion/op-ed/the-sanctions-cloud-over-india-us-ties/article36973011.ece

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