CAATSA may be counter-productive for the US in the long run

Sunilchandra Dal
Saturday, 9 June 2018

If the US applies sanctions under CAATSA, India  may not get weapons like Predator drones

Defence Minister Nirmala Sitharaman recently declared India’s decision to go ahead with the S400 air defence missile system deal signed with Russia in 2016. This is a step in the right direction. The Rs 40,000-crore deal for five S400 systems will boost India’s defence capabilities against Pakistan and China. The missile system is said to be the best of its kind in the world today. 

Bilateral ties between India and the United States are at the crossroads today. Though both are allies with a growing military trade and are evolving a common strategy for the Indo-Pacific region, the roadblock could be a US law, Countering America’s Adversaries Through Sanctions Act, 2017 (CAATSA). 

CAATSA seeks to impose sanctions on nations dealing with major defence and intelligence entities in Russia to wean away these nations from Russia to US weapon manufacturers and also to isolate Russia.

Under CAATSA, the US president is authorised to suspend export licences for weapons and ban US investment in equity or debt. Apart from India, UAE and Saudi Arabia could also be in the crosshairs. 

According to Laxman Behera and G Balachandran of Institute for Defence Studies and Analyses, New Delhi, the bulk of the potent weapons in India’s arsenal are of Soviet or Russian origin. The nuclear submarine INS Chakra, the Kilo-class conventional submarine, the supersonic Brahmos cruise missile, the MiG fighter aircraft and Su-30 MKI fighters, IL-76/78 transport planes, T-72 and T-90 tanks, Mi-series of helicopters and Vikramaditya aircraft carrier are all sourced from Russia. Naturally, it would make more sense to go along with the arms deals with Russia. 

The writers point out that as per the Union Ministry of Defence’s existing Guidelines on Penalties in Business Dealings with Entities, reneging of contractual obligations will attract either suspension or ban of the concerned companies. India also depends on Russia for spare parts for the weapons and systems already bought from it. This is an additional reason to continue defence deals with Russia. 

If the US applies sanctions under CAATSA, India  may not get weapons like Predator drones, but those are weapons for which India can find alternatives in the global market. 

Keeping India in mind as an example, countries threatened with sanctions under CAATSA may not be willing to change their decisions to deal with Russia. These countries may decide not to buy weapons from the US, and instead, buy more from Russia and other countries. In the wake of CAATSA, officials in Turkey have said they will look for fighter jets from other countries. Relations between Turkey and the US are already strained over a number of issues. Thus, the US could end up losing access to weapon markets in some cases and thus benefiting Russia, thanks to CAATSA. 

The law seems to be ill conceived and drafted in a hurry under the heat of the US-Russia cold war, without going through all possible consequences. CAATSA is likely to put under question the reliability of the US as a weapons supplier. India may like to be cautious while issuing multi-billion dollar arms tenders to countries that are perceived as unreliable. There is a solution. The US could exercise a waiver on grounds of national security and exempt India from sanctions under CAATSA. One hopes better sense will prevail with a major partnership at stake. But for the moment, wait and watch are the key words. 

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