The maiden two-day visit of US Secretary of Defence, Lloyd J Austin to New Delhi in March 2021 signified the Biden-Harris administration’s intent to continue bilateral strategic engagement with India, without any significant departure from the previous policy.

Secretary Austin struck the right chord by commending India’s leadership in the Indo-Pacific region and growing engagement with like-minded democracies in the region, to promote shared strategic, political and economic goals. This was an obvious reference to the Quadrilateral Security Dialogue, or Quad, in which India has invested considerable diplomatic and naval capital. He also stressed the importance of the India-US strategic and defence partnership and its impact on the international rules-based order which he claimed would only proliferate.

 

Addressing a select media interaction after talks with Defence Minister Rajnath Singh on March 20, Secretary Austin stated that they had “discussed opportunities to elevate the US-India defense partnership … through regional security cooperation and military-to-military interactions and defense trade”.

Bilateral military commerce has, indeed, been the cornerstone of deepening strategic engagement between the two countries. It now stands at close to $20 billion with recent US equipment buys by India including P-8I Neptune long-range maritime multi-mission aircraft, AH-64E Apache Guardian attack and CH-47F Chinook heavy-lift helicopters, C-17 Globemaster III and C -130J-30 military transport aircraft and BAE Systems M777 155mm/39 calibre howitzers.

 

The two sides are also in advanced negotiations for assorted equipment and weapon systems worth $10-12 billion, like the armed MQ-9 Reaper or Predator-B unmanned aerial vehicles (UAVs) and National Advanced Surface-to-Air Missile System-2 (NASAMS-2), amongst others.

Such thriving unilateral trade, however, seems headed for a moment of truth later this year after Russia begins delivery of first of the five Almaz-Antei S-400E Triumf self-propelled surface-to-air (SAM) systems that India had acquired in October 2018 for $5.5 billion for the Indian Air Force (IAF). For inducting the advanced SAM system renders India vulnerable to being penalised by Washington under the US’ Countering America’s Adversaries Through Sanctions ACT (CAATSA).

 

CAATSA became law in August 2017 after being approved by the US Congress in response to Russia annexing Crimea in 2014 and its alleged meddling in the 2016 US presidential elections. The Act authorises the US Government to impose unilateral sanctions on countries — or specific entities within an offending country — for entering into bilateral contracts with Russia. It also applies to Iran and North Korea because of their respective rogue nuclear programmes.

In 2018 the Act was invoked against the Chinese Defence Ministry’s Equipment Development Department (EDD) and its director, Li Shangfu, for acquiring two S-400 systems as well as Sukhoi Su-35 ‘Flanker-E’ combat aircraft. Thereafter, in December 2020, sanctions were imposed against US’ NATO-ally Turkey also for taking delivery of the first of two S-400 systems, similar to the ones India awaits.

And, faced with the prospect of being sanctioned under CAATSA in March 2020, Indonesia opted to scrap the acquisition of the Russian Su-35 fighters under a barter deal, choosing the Dassault Rafale fighters and Boeing F-15EX Advanced Eagle fighter aircraft instead to upgrade its obsolete fighter profile.

If anything, these precedents do not bode well for India, which has so far shown no signs of terminating the S-400 buy or procurement of other assorted Russian materiel it has contracted to acquire over the past five years. These include four Admiral Grigorovich-class stealth frigates, leasing of a second Project 971 ‘Akula’ class nuclear-powered submarine (SSN) in addition to assorted ammunition and missile systems.

India is also negotiating the licensed production of some 750,000 Russian Kalashnikov AK-203 assault rifles by its state-owned Ordnance Factory Board and 140 Kamov Ka-226T ‘Hoodlum’ light multi-role helicopters — in addition to initially acquiring 60 others in ‘fly away’ condition. India is also in advanced talks with Moscow to import 21 additional second-hand MiG-29 ‘Fulcrum’ fighters and to locally licence-construct the Sukhoi Su-30MKI Flanker multi-role combat aircraft.

Consequently, the Biden-Harris administration, hoist with its own petard, faces a serious dilemma. Having sanctioned other countries for similar Russian military equipment purchases, it simply cannot absolve India from being correspondingly penalised. But inexplicably, the gathering storm is continuously underplayed by both US and Indian officials, as it was during Austin’s visit, even though delivery of the S-400 systems is scheduled for later this year.

In his joint presser in Delhi Austin declared that he had taken up the S-400 issue with Singh, but there was no question of discussing the matter of sanctions because India was yet to take delivery of the system. In an anodyne declaration the US Defence Secretary declared that the US urged all its allies and partners to ‘move away’ from Russian equipment and to ‘avoid any kind of acquisition that would trigger sanctions’ but declined to elaborate.

The expectation of sanctions being imposed surfaced immediately before Austin’s visit. The chairman of the US Senate’s foreign affairs committee Robert Mendez urged Austin to warn India that acquisition of the S-400 systems would render it liable to be sanctioned under CAATSA. The New Jersey senator also urged Austin to raise concerns regarding human rights issues in India and perceived dilution of democratic norms by Prime Minister Narendra Modi’s government.

Eventually, however, all three issues were underplayed by Austin, indicating a realisation at the political level in the US that Washington remains chary of offending a close ally, leave alone imposing sanctions. It also raises the spectre of both sides being in denial over the issue, even when being ostrich-like was simply not an option.

Even so, it’s irrefutable that there can be no escape for Washington from enforcing CAATSA on India, as it remains a law approved by the US Congress and rebutting it is not an option. Some analysts in Delhi, however, believe that Section 231 of the Act could provide a face-saving reprieve for the US, eager to collaborate with India as a ‘frontline’ state in its shadow-boxing with China.

Under this section, sanctions can be waived if the country concerned is ‘taking or will take steps to reduce its inventory of major defence equipment and advanced conventional weapons produced by the defence sector of the Russian Federation…over a specified period’. The case for waiver is further reinforced if the said country cooperates with the US on other security matters critical to its interests.

This could prove fortuitous for India as it more than measures up on both counts. Firstly, according to the Stockholm International Peace Research Institute (SIPRI) India’s share of Russian materiel buys had declined from 70 per cent in 2010-2014 to 58% in 2014-2018, while conversely, between 2008 and 2017 Indian military platforms and defence kit procurements from the US had increased a whopping 557 per cent. Additionally, India had substantially increased defence procurements from the US’ strategic partners France and Israel. And secondly, India-US bilateral and military ties too are robust with the Quad being a most recent instance with regard to China, the common foe.

However, a less charitable view is that the threat of enforcing CAATSA on Delhi is being kept alive to ‘persuade’ India to acquire US combat fighters for the IAF and the Indian Navy (IN) for an estimated US$30 billion. The IAF has long been demanding 114 medium multi-role combat aircraft to make up its depleted fighter squadrons, while the IN is seeking 57 Multi-Role Carrier Borne Fighters for its third aircraft carrier that remains under consideration. The US is a strong contender in this programme.

Whatever the outcome, it is difficult to assess what strategic objective the US will achieve by compelling India to roll back, if not sever, its military commerce with Russia other than pushing Moscow even closer to China and Pakistan. It will be equally challenging for India to parse the sanctions, should they be imposed, as around two-thirds of its military inventory is sourced from Moscow. On the flip side, this could also impact the impending defence deals with the US.

The suspense continues.

– The author is Ex-Financial Advisor (Acquisition), Ministry of Defence