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India-Russia Agreement and The Possible CAATSA Sanctions

Relations between the United States and India have come a long way since the Clinton Administration placed sanctions on India for the nuclear tests that it carried out in 1998. In recent times we have seen a further strengthening of relations between the two economic giants in the field of defence cooperation, specifically in the Indo-Pacific. This is the result of the stance that India adopted against the People's Republic of China and its efforts along with other Quad countries to ensure the creation of a free and fair Indo-Pacific. While we have focused on India’s burgeoning naval presence, there seems to be another diplomatic war waging between the Americans and the Indians, as the Indian government signed a contract with the Russian Federation to buy the Russian Triumf missile system, concluding negotiation that began in 2015. However, during the time of the signing of the agreement the United States Congress passed the, ‘Countering America’s Adversaries Through Sanctions Act’ or CAATSA, which essentially transformed the deal between the Russian Federation and the Indian Republic into a complex trilateral balancing game.

The Countering America’s Adversaries Through Sanctions Act was passed overwhelmingly by the United States Congress, however, it was signed reluctantly by the Republican President Donald Trump. As the name suggests the act aims at countering the threat to American interest through the use of sanctions. In particular, it aims to counter aggression by Iran, Russia, and North Korea through punitive measures. The area of interest within the act is Title II, which imposes sanctions on Russian interests dealing with sectors such as defence, security, and financial institutions. The major rationale behind introducing these provisions was two-fold. The first being, Russia’s alleged interference in the 2016 US elections, and the second being its military intervention in Ukraine. In light of the act, Indian agreement with the Russian government hangs by a thread as the Indian administration awaits to see if the US President who is granted powers by section 231 of the act to impose at least five out of the twelve listed sanctions, against those engaged in a ‘significant transaction’ with the Russian defence and intelligence sectors', will do so or not.

Following the events of the last decade and a half, there remains no doubt that India is located in one of the most security-sensitive regions of the world. It is one of the only countries or regions in the world that hosts the full spectrum of conflict that ranges from nuclear to sub-conventional war. The country’s security is challenged on two fronts, on the West it has its long-lost brother Pakistan and on the East, it is all-weather friend China. China’s increasing military presence in the regions surrounding the Indian subcontinent and the unprecedented increase in the county’s defence spending has increased India’s concerns about its geographical security. To deal with the perennial security threat that India faces, India has adopted a strategy that strengthens its defence preparedness, by developing defence technologies to meet the gap that exists in its security apparatus. The country has also turned to other nations by reinforcing its strategic partnerships to equip its armed forces with the state of the art arms. The India-Russia agreement was a step in this direction while also an effort on India’s end to bridge the yawning gap that was created over the years between the Russian federation which was India’s traditional arms supplier and had come to be replaced by the United States and Israel.

India, however, is not the only country to have faced the brunt of the CAATSA act as the United States has already invoked the CAATSA twice. The first such incident involved the Red Dragon that has been a constant thorn in the flesh of the Trump Administration. The US State Department and Treasury Department placed sanctions on China’s Equipment Development Department after the purchase and delivery of the S-400 Triumf air defence system and Sukhoi S-35 aircraft. The second incident in regards to the CAATSA, saw the expulsion of the Turkish Republic from the S-35 fighter jet program, after Erdagon’s government received the first delivery of S-400 missiles from Russia. Even though the Indian

case involves the S-400 missiles that led to the sanction against both China and Turkey, there exists an understanding within the Indian government that in this particular situation, the Trump administration would adopt a different approach as India’s relationship with the Americans is very different as compared to the other two countries under consideration. India unlike China does not have an inimical relationship with the US, which means that it is not bound by its wishes. On the other hand, India is not a NATO ally like Turkey, which means that it is not expected to comply with Washington’s diktats.

This brings us to the more important question, ‘Is it possible for India to skip the sanction altogether?’ The CAATSA Act grants the President of the United States powers to waive sanctions under the Act in two specific cases. A waiver by the President is permissible if he determines that waiver would be in the interest of the National Security of the country. In 2018, the US Congress modified the waiver clause by adding that the President also has the power of waiving the sanctions on a particular country, if the country under consideration is, “cooperating with the United States Government on other matters that are critical to the United States’ strategic national security interests”. The Indian government has expressed the hope that the White House would soon decide in favour of waving off sanction on the Indian agreement with Russia for the S-400 missiles, on the grounds that a strong Indian military is beneficial for the United States, and the fact that the country cannot be expected to cut off defence ties with the Russian Federation, without weakening the capabilities of its armed forces.

In case India is not granted the waiver to the sanctions under the CAATSA, we expect section 235 of the legislation to kick in. The section under which the US president places a minimum of five sanctions out of the total twelve. This could include export sanctions, cancellation of loans from the U.S., or a ban on loans from international financial institutions. As a sovereign nation, India enjoys the right to deal with any nation of its choosing and cannot be ordered to slow or suspend its existing cooperation with Russia. It is unlikely that the CAATSA would be used against India, it has nevertheless the capability of souring future relations between the two countries. Termination of defence cooperation with Russia is highly unlikely and could be disastrous for the country, owing to the immediate need for defence hardware to meet the demand by the Indian armed forces and to maintain the huge share of Russian weaponry in the Indian arms inventory. Seeing this, it is imperative for New Delhi to come to terms with reality, and focus its attention on creating a strategy that prepares the country for possible CAATSA sanctions.


1. statement-raises-constitutional-issues/534099001/

2. 3. case-india-waiver/

4. ties/article29606117.ece

5. buy/

6. chinese-arms-but-india-safe-says-us/569406/


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