India Likely to Get a Waiver From Sanctions Under CAATSA

India is likely to receive the delivery of the S-400 defence system in November. As a result, several lawmakers in the United States have asked for exemptions for India from sanctions being imposed under CAATSA Countering America’s Adversaries Through Sanctions Act. It is a US federal law which imposed sanctions on Russia, Iran, and North Korea and was enacted in 2017.

It also has the provision of sanctions against those countries which engage in significant transactions with Russia’s defence and intelligence sectors.

Under the Act, the US President can impose at least five of the 12 listed sanctions on persons engaged in a “significant transaction” with Russian defence and intelligence sectors.

What sanctions will be imposed?

  1. prohibition on loans to the sanctioned person.
  2. prohibition of Export-Import bank assistance for exports to sanctioned persons.
  3. prohibition on procurement by United States Government to procure goods or services from the sanctioned person.
  4. denial of visas to persons closely associated with the sanctioned person.

Implications on India

Though the sanctions are not directly imposed on India, it affects India nonetheless. The prime reason for this is the nature of the relationship that India has with Russia and Iran. India has strong trade ties with Russia traditionally to fulfill its military requirements, while Iran has been crucial to cater for the needs of crude oil demand in India with both these nation-states.

So, in case India does not remove ties with Iran and Russia, the US can invoke sanctions against India. India can neither afford to lose the growing diplomatic relations with the US nor it can afford to forego supplies of oil and defence from Iran and Russia.

What are the reasons behind this exemption?

  • CAATSA can impact the Indo-US ties, and since it is projecting India as a key player in pursuing its Indo-Pacific strategy, the sanctions could dent the image of the US as a reliable partner.
  • US administration has favoured relief for India, citing the “strategic opportunity” that India presents considering its geography, and it also marks the opportunity “to trade in arms with India”.
  • The US defence industry perceives India as a major market. As a result, deals with India have grown from near zero to $15 billion in a decade.
  • The US is still the largest supplier of arms and military equipment, both in terms of the volume and value of contracts,
  • The CAATSA waivers also underline the growing defence and security cooperation that has seen India sign a logistics pact with the US.
  • Also, the US designated India as a Major Defence Partner, and both countries came together on Indo-Pacific strategy, particularly after the newly resurrected initiative of QUAD.
  • It is also a symbol of acknowledgement by the US by the principle that India, being a sovereign country, cannot be dictated on its strategic interests by a third country.

What is India’s S-400 deal with Russia?

  • The Russian-built S-400 Triumf is considered the most advanced modern long-range surface-to-air missile (MLR SAM) system operationally deployed in the world.
  • It is considered to be way ahead of the United States’ alternative known as Terminal High Altitude Area Defence system (THAAD).
  • S-400 is a mobile system that can engage all types of aerial targets, including unmanned aerial vehicles (UAVs) aircraft and cruise and ballistic missiles within a range of 400 km, at an altitude up to 30 km.
  • This system has the ability to track 100 airborne targets, including super fighters like American built F-35s, and can engage six of them at the same time.
  • The Defence Acquisition Council of India considered buying 12 units, but subsequently, it was determined that five units would be enough to cater to India’s needs.