After trade war, Trump wants to punish India for Russian defence purchases

The US is not just “frustrated” with New Delhi on troubled defence ties, but it is also planning sanctions on India under CAATSA (Countering American Adversaries Through Sanctions Act) legislation, a top American government official told ThePrint.

“Not just Turkey, the Trump administration is closely monitoring India also. India’s decision to purchase the S-400 system and its recent plans for more defence purchases from Moscow has become a serious cause of concern…India is now being considered for sanctions under the CAATSA legislation,” said the official who did not wish to be named.

The official, however, said the sanctions would not be imposed immediately since it would take some time for Russia to deliver the S-400 Triumf air defense missile systems to New Delhi, but Washington DC is “extremely frustrated and unhappy” with India on how defence ties have shaped up in the last couple of years.

“The US is especially irked that in the last three years no major big-ticket defence deal has been signed while talks are on with Russia for several large-scale deals. The only saviour can be if India places orders for the US advanced stealth fighters,” the official said.

India-Russia defence ties ::

CAATSA was enacted on 2 August 2017. Last year, the US had imposed sanctions on China under CAATSA for buying Russian warplanes and S-400 systems. On 17 July this year, President Donald Trump has said the US will block the sale of F-35 fighter jets to Turkey for buying Russian S-400.

Despite threats from the US, India is planning to sign a defence pact with Russia in order to boost military sales between both the countries. The pact could be signed during Prime Minister Narendra Modi’s visit to Vladivostok, Russia, for the Eastern Economic Forum, which will be held from 4 September to 6 September.

Additionally, India is also planning to buy two guided-missile frigates from Russia for the Navy. India plans to buy the frigates by paying in Euros to avoid CAATSA sanctions. Moscow might also help New Delhi in developing two additional frigates. Talks are also on with Russia to help develop India’s next batch of submarines through transfer of technology.

“The call that the US makes on CAATSA with India represents one of the most pivotal decisions for the US-India relationship in recent memory. Should it go through with the sanctions, the relationship could plunge into a major crisis. That said, despite his tariff policies on India, I don’t believe Trump would actually pull the trigger and slap sanctions on India,” said Michael Kugelman, Deputy Director of Asia Programme and Senior Associate for South Asia at the Washington-based think tank Wilson Centre.

Tensed US-India relations ::

During the visit of US Secretary of State Mike Pompeo to India last month, External Affairs Minister S. Jaishankar was believed to have told him that India will go ahead with the S-400 deal.

In 2018, it was the Trump administration that had granted India the coveted ‘Strategic Trade Authorisation 1’ or STA-1 Status for smoother and efficient transfer of sensitive goods and integration of suppliers in both countries.

Notwithstanding the differences that both countries are facing on bilateral trade, the Trump administration had hoped that it would be able to reduce the trade deficit with India by selling more of its weaponry to New Delhi.

Earlier this year, the US government moved a legislation in the Senate, seeking to upgrade India’s status at par with its NATO allies for sale of high-tech defence armaments by amending its Arms Export Control Act.

The US had also granted India the designation of a ‘Major Defense Partner’ in an effort to boost defence and military sales between both the countries, including transfer of sensitive and encrypted technology.

‘US disappointed that Russian armaments are growing in India’ ::

Benjamin Schwartz, head of Aerospace and Defence at the Washington-based US-India Business Council, said: “The US military is disappointed that with Russian armaments growing in India, it may impact interoperability between Indian and US platforms in the context of combined operations. It might also become an impediment for easier transfer of technology.”

“While defense trade continues to grow, the new big ticket deals for UAVs and fighters are still pending. This is disappointing given the time and effort particularly with the Russian deals occurring in the background. Progress on the commercial deals would help when and if CAATSA gets triggered and has to be managed,” he added.

India and the US have already signed two major defence foundational pacts – LEMOA (Logistics Exchange Memorandum of Agreement) and COMCASA (Communications, Compatibility and Security Agreement).

“A government-to-government deal on the F-21 fighters will solve all problems, including CAATSA and trade disputes, because the US doesn’t really want to spoil relationship with India as it views New Delhi as counter to China. So unless that happens, the posturing will continue,” said a representative of US defence industry, who did not wish to be named.

India has plans to buy 114 warplanes under a $18-billion deal. The initial tender was issued by the Indian Air Force in April. Some of the top contenders are US’ F-21 by Lockheed Martin and Boeing’s F/A-18, among others.

The second round of ‘2+2 Ministerial’ meeting will take place in September this year in Washington. PM Modi may also be visiting the US in September to attend the annual UN General Assembly meeting.