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US unlikely to impose CAATSA sanctions on India for S-400, but other Russian deals won’t be easy

The $5.43-bn S-400 ‘Triumf’ missile systems deal is going to be at the centre of the upcoming India visit of Russian President Vladimir Putin.

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PM Narendra Modi with US President Joe Biden during their bilateral meeting in Washington on 24 September 2021| Twitter /@narendramodi
PM Narendra Modi with US President Joe Biden during their bilateral meeting in Washington on 24 September 2021| Twitter /@narendramodi

New Delhi: President Joe Biden’s administration is unlikely to sanction India under the Countering America’s Adversaries Through Sanctions Act (CAATSA) for procuring the Russian S-400 air defence systems, sources told ThePrint.

The $5.43-billion S-400 ‘Triumf’ missile systems deal will be in the spotlight during the India visit of Russian President Vladimir Putin on 6 December during which he will hold summit talks with Prime Minister Narendra Modi.

The India-Russia Annual Summit will also see the coming together for the first time of the foreign and defence ministers of the two nations this year as they plan to accord a special tag to the relationship, similar to what New Delhi has done with its Quad partners (US, Japan and Australia).

The two sides are expected to sign a 10-year military technical agreement. The Reciprocal Exchange of Logistics Agreement is also ready to be inked, all red rags for Washington.

While the US hasn’t yet made its stand public on how it will deal with India on CAATSA as far as S-400 is concerned, the Biden administration has told New Delhi during diplomatic dialogues that it is “willing” to grant a presidential waiver to India “only” for the S-400 deal as a one-time exception, the source said.

Passed in August 2017, the CAATSA provides for sanctions by the US against countries that do business with Moscow.

However, the US expects India to continue working towards reducing its import dependence on Russia as far as procuring arms and equipment is concerned, the source said.

According to this source, India was able to convince the US during the previous Donald Trump administration that it would go ahead with the S-400 deal. New Delhi was then “assured” of a waiver when then defence minister Nirmala Sitharaman met her American counterpart Jim Mattis during their inaugural round of India-US 2+2 talks held in September 2018, diplomatic sources said.

Subsequently in October 2018, India and Russia inked the S-400 deal.

Sources in the Indian defence and security establishment said the CAATSA issue has since come up for discussions with the US at multiple levels on several occasions — the last being the visit of US Defense Secretary Llyod Austin in March this year.

During these discussions, the Modi government “explicitly” told the Americans that not only does the deal predate CAATSA, but also highlighted that this was an “American law” and not of the UN.


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Growing India-US ties as ‘strategic allies’

The US has so far not made any official statement on imposing CAATSA on India, sources said the Biden administration won’t jeopardise the growing India-US relations with such a move.

According to sources, India has diversified its defence sourcing and a large number of American systems are also in service with the Indian forces, several in the pipeline. The big-ticket defence deals that the US is eyeing include the nearly $3 billion deal for armed drones and new fighters for both the Indian Air Force and the Navy.

The Biden administration “recognises” the fact that India is now one of its “strategic allies” and hence it will not rush into invoking CAATSA for the S-400 deal, under which the first system is already getting delivered, said a second source.

Last month, Russia’s Federal Service for Military-Technical Cooperation (FSMTC) Director Dmitry Shugaev told news agency Sputnik that the deliveries of the missiles are “proceeding on schedule”.

“We have been very clear with our Indian partners about our concern over this system,” Pentagon spokesperson John Kirby said at a press briefing in November.

During her maiden visit to India in October, US Deputy Secretary of State Wendy Sherman said that the S-400 is “dangerous” for any nation’s security interests.

Between 2011-15 and 2016-20, India’s arms imports saw a 33 per cent drop, with sales from Russia hit the hardest. Moscow witnessed a 53 per cent fall in its arms exports to India even as the latter’s imports from France saw an upswing, according to the latest data published by Swedish think-tank SIPRI.


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‘Legislation in the works to exempt Quad countries’

P.S. Raghavan, former Indian Ambassador to Russia, told ThePrint that the Biden administration “thinks quite differently” on CAATSA compared to the previous Trump regime. This could be seen in the case of Russia-Germany energy partnership under the Nord Stream 2 deal, where the US “found a way to waive sanctions on Germany”.

“In various parts of the US establishment there is now a realisation that CAATSA has the potential to harm relationships and they don’t want to jeopardise those ties that have a strategic aspect to it,” said Raghavan, who is also a former chairman of the National Security Advisory Board.

The S-400 deal is “done and dusted”. “There are reports that some demonstrative deliveries will happen before the summit,” he said.

“There are reports of legislation in the works to exempt the Quad countries from CAATSA sanctions. This would in effect be a waiver through the backdoor, if it goes through. Because imposing sanctions means it stops the US from doing business with these countries and they don’t want to do that,” Raghavan added.

“Most importantly, the US legislation (National Defence Authorization Act 2019) gives the US administration the power to waive sanctions on a number of strategic and national security considerations, which Biden can use,” he added.

On defence procurement, the US has invoked CAATSA only against China and Turkey so far. But it has not been implemented against Turkey because the US “can’t stop doing business with a NATO partner”, Raghavan said.

At this stage, the discourse is not about a waiver of CAATSA as a whole but it is about not invoking CAATSA for the S-400, he said, adding that larger issue of how we deal with the law, when other significant defence transactions with Russia are contemplated, “will still have to be resolved”.

(Edited by Amit Upadhyaya)


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