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To impose or not to impose sanctions on India?

India’s $ 5.43 billion surface-to-air missile defense (SAM) S400 Triumf deal with Russia has left a hornet’s nest with the United States. As deliveries of the S-400 began this month, there was much speculation that the United States was imposing the Countering America’s Adversaries through Sanctions Act (CAATSA) on India. While the United States has imposed CAATSA on Turkey (a NATO ally) and China, applying the same to India would require diplomatic and geopolitical tact.

With news circulating that Russia and India are negotiating more deals related to the more advanced S-500 missile system, it is imperative to understand whether the United States will taint its relationship with India. Ironically, this deal comes at a time when US-Indian relations are strong and collaborative.

The CAATSA law was passed in the United States in 2017, in part because of the supposed involvement of Russia in the 2016 American presidential elections. The law advocates sanctions against any country with defense or intelligence ties to the United States. Russia. Ever since the S400 defense deal with India was revealed, US lawmakers have asserted that India should be made aware of the scope of CAATSA before delivery begins. However, with the first delivery made and no sight of sanctions against India, the following factors appear to be holding the United States back.

First, the United States realizes that India has a hostile neighborhood on two fronts with Pakistan to the west and China to the north and east. China and India have already been in a long border standoff in the Ladakh region (the northernmost point of India) since 2020 – recently China has deployed S 400s to air bases along the Tibetan border, a serious security threat to India. What would help the situation is American mediation and a public stance to appease the situation in Indochina – something the Western power is unwilling to do openly. Therefore, the United States must find another compelling argument for India to prevent it from deploying S 400 as a defensive measure.

Another major factor that the United States often overlooks is that Russia has been India’s defense partner for decades. To date, India relies on Russia for various aspects of defense, including training and maintenance. US lawmakers must view this S400 deal in light of India’s decades-long partnership with Russia and the latter’s easy accessibility to products.
In particular, this agreement for the acquisition of five S400 defense systems was signed between Russia and India in 2018 when the framework of CAATSA was not yet well defined. Then, in 2019, India paid the advance to the Russian company Rosnet for the deliveries. During both periods, the United States did not really “warn” or allude to India regarding CAATSA. Despite symbolic threats of sanctions from then-President Donald Trump, the United States largely maintained an “agreed upon” silence during the early stages of the deal.

In addition, sanctions against India by the United States can push the former towards Russian defense acquisitions, which can hamper American defense sales in India. It is a delicate bridge that the United States must cross – it is trying to moderate its reactions so as not to tip bilateral relations to the other side. Currently, the United States views India as a strong defense partner – while United States defense sales to India were insignificant previously, they have reached $ 20 billion in the past 20 years. In 2016, the United States designated India as a strategic defense partner. On the other hand, Russia’s defense trade with India has declined, especially in 5-10 years. Therefore, the United States must carefully weigh its options against India regarding sanctions.

To top it off, the current geopolitical situation has led India and the United States to work closely together to counter China’s growing influence in Asia. The United States needs India’s power and geopolitical tact to counter Chinese growth in the region and recognizes India’s importance in the Quad group.

As recently as September 2021, there was a resumption of discussions around Quad security cooperation, and US President Joe Biden received the leaders (India, Australia, Japan) of the Indo-Pacific Quad at home. White. There was additional support from three Republican senators for an amendment to the National Authorization Act for FY2022 that argues strongly for not applying CAATSA sanctions to Quad members. It was also reported the formation of another cooperation group called West Asia Quad (comprising India, Israel and the United Arab Emirates) whose main focus will be on economic issues (however, details remain vague). In addition to fighting China, India and the United States are engaged in other key areas of activity, including pandemic control and vaccine diplomacy, defense equipment market, Fintech, IT / ITeS, cybersecurity and others. With so many areas of collaboration between India and the United States, it will become difficult for the latter to hamper the relationship based on a chosen defense agreement with Russia.

One week since the start of the first delivery to India and more than three years since the S400 agreement was successful. While India has limited options due to the Chinese threat, the United States also faces a geopolitical dilemma. India is not Turkey or China – the United States realizes that economically and geopolitically, to invoke CAATSA against India would be going back more than twenty years. It took five US presidents and two decades to get US-Indian relations back on track after the Western power imposed sanctions on India over the 1998 nuclear tests in Pokhran. Since then a lot has changed – in the race to “punish” (however small it may be) India for a defense deal with Russia, the United States cannot allow China and the United States. Russia to win geopolitically.

The United States is still pondering the extent of the CAATSA waiver and embargoes on India – officials keep repeating that there is no country-specific waiver provision against CAATSA, and yet they appreciate the strategic alliance with India. However, failing to impose sanctions on India could send the wrong signal against CAATSA to the world; therefore, the US president may have to balance this matter by calibrating the scope of the sanctions. Russian President Putin’s upcoming visit to India with an agenda to table an agreement on the S-500 and S-550 systems will further test how the United States will deal with the imperatives of geopolitics, market forces and security. credibility of their national law.

Shraddha Bhandari is co-founder and CEO of Intelligentsia Risk Advisors, a strategy consulting firm. Opinions expressed are personal


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