From UPSC perspective, the following things are important :
Prelims level : CAATSA, S-400
Mains level : Implications of India's defense purchase from Russia
- Exactly a year ago India and Russia signed a contract to buy the Russian Triumf missile system, concluding negotiations that began in 2015.
- During that time, however, a new U.S. law, called “Countering America’s Adversaries Through Sanctions Act” or CAATSA was passed by the U.S. Congress.
- This transformed what should have been a straightforward bilateral deal into a complex trilateral balancing game for India.
About S-400 Triumf
- The S-400 is known as Russia’s most advanced long-range surface-to-air missile defence system, capable of destroying hostile strategic bombers, jets, missiles and drones at a range of 380-km.
How significant is the deal for New Delhi?
- A year after PM Modi and Russian President Putin signed an agreement, the deal continues to cast a cloud over India-U.S. ties.
- The agreement to purchase the Triumf missile system boosted India-Russia defence ties at a point of inflection last year.
- Russia has traditionally been India’s biggest defence supplier, but was surpassed by the U.S. in the last few years, a fact that had added to a perceptible drift in bilateral ties.
- The Indian Air Force has also backed the superior air defence system in that it will fill the gap in India’s particular needs: countering its main adversaries and neighbours, China and Pakistan’s growing air power, while dealing with a depleting stock of fighter aircraft.
Is India the only country facing CAATSA sanctions?
- By coincidence, CAATSA has now been invoked by the US twice already, and both times for countries buying the Triumf system from Russia.
- In September 2018, US announced sanctions for the procurement of the S-400 Triumf air defence system and Sukhoi S-35 fighter aircraft.
- Washington expelled Turkey from the F-35 fighter jet programme in July this year after the first delivery of S-400s was received.
- India is neither like China, which has an inimical relationship with the U.S., and hence not bound by its diktats, nor like Turkey which is a NATO ally of the US.
Is a sanctions waiver possible for India?
- There is also an exit clause in CAATSA which states that the US President may waive the application of sanctions if the he/she determines such a waiver is in the national security interest of the US.
- The U.S. Congress also modified the waiver clause to allow the President to certify that a country is cooperating with the US on other matters that are critical to its strategic national security interests.
- It is no secret that US has misgivings about the CAATSA sanctions which were meant to curtail its own powers to deal with Russia, and the other countries included in the act — Iran and North Korea.
- It is hoped that Mr. Trump will grant India a waiver on the deal, thanks to good bilateral relations with India and the fact that it is a “major defence partner” of the U.S.
- Hence India expects to comply with Washington’s demands, and hence hopes to escape CAATSA sanctions.
What happens if a waiver is not granted?
- Section 235 of the CAATSA stipulates 12 kinds of punitive sanctions against transactions in defence, energy, oil pipelines and cybersecurity technology with any of the U.S.’s “adversaries”.
- According to the Act, the US may impose “five or more of the sanctions described”.
- These measures include export sanctions, cancellation of loans from U.S. and international financial institutions, ban on investments and procurement, restrictions on forex and banking transactions, and a visa and travel ban on officials associated with any entity carrying out the sanctioned transactions.
- None of these is expected to go into process until India takes delivery of the five S-400 systems it has paid an advance on, which are expected to begin in about 20 months and conclude by 2023.
Has India given the U.S. a fait accompli on the S-400?
- India’s firm-footed response to the U.S. threat of sanctions on the Russian S-400 is in sharp contrast to its decision to “zero out” oil purchases from Iran, which were sanctioned by the U.S. last year.
- It denotes that while the India is prepared to diversify its energy sources, it will not be bullied on its defence security options.
- Given the stakes involved, the government hopes that the U.S. will put its burgeoning strategic, defence and business bilateral relationship with India above its rancour with Russia.