India and Russia: Triumf or sanctions?

India and Russia: Triumf or sanctions?

New Delhi and Moscow recently concluded a USD 5 billion deal for military equipment. This deal leaves the United States with a dilemma of either sanctioning India under the Countering America’s Adversaries Through Sanctions Act (CAATSA) aimed at hurting the Russian military complex, or ignoring New Delhi’s purchase to avoid jeopardising an essential strategic alliance. GRI’s Malvika Singh analyses the importance of the deal to India, and the likelihood of American sanctions.

India and Russia (preceded by the Soviet Union) have shared strong economic, diplomatic, and military relations since the Cold War. Both nations jointly collaborate on the world stage on matters of shared interests at the United Nations, BRICS, and G20. On October 5 2018, India inked USD 5.43 billion (Rs 40,000 crore) in a deal with Russia for five advanced S-400 Triumf surface-to-air missiles squadrons. The S-400 has been part of talks between India and Russia since 2015 and was central to President Vladimir Putin’s recent visit to New Delhi.

Triumf surpasses capabilities of the American Patriot missile system and is a relatively affordable substitute for countries such as India. Its high-tech system is considered the most effective long-range surface-to-air missiles, capable of engaging hostile targets, including manned and unmanned aircrafts, at a range of 400-kms. Most importantly, the Triumf missiles serve the vital purpose of bolstering the Indian Air Force (AIF) to counter threats arising from Pakistan and China.

Despite historic ties with Russia, both nations have registered a recent drift. A growing Indian economy has started leaning more towards America, while Moscow’s weakening global standing and its isolation by most Western countries has led to a growing dependence on Beijing. This is a contentious point for India that relies on Moscow to counter the threat of China and its recent acquisition of the same S-400s were seen as a game changer in the regional balance of power. India finds itself isolated between two confrontational neighbours, Pakistan and China, who are close allies to one another. Therefore, signing this deal was essential to filling the gap in India’s combat capabilities notwithstanding the possibility of American sanctions under CAATSA.

Indian arms imports

India provides a major lucrative market for arms exporters because of its constant demand for defence equipment. The persistent threat New Delhi faces in an unstable and hostile South Asian region requires military equipment to be inducted and upgraded frequently. In 2017, India was responsible for over 12% of global arms imported between 2013-17, 62% of these from Russia. An interesting trend studying India’s import patterns suggests that while the portion of arms from Russia remained almost uniform between 2008-12 and 2013-17, imports from America increased by a staggering 557% (15% of all arms imports), making it the second largest exporter. Israel’s presence as an exporter also jumped by over 285% and comprised 11% of the overall total for Indian arms imports. It is important to highlight that though 62% is still a high proportion, the dependence on Russia has declined from previous decades where the proportion of imports were over 70%.

In recent years, there has been a marked change in Indian foreign policy with a growing stress on multipolarity, especially with Prime Minister Narendra Modi pushing for stronger strategic ties with Israel, United States, and France. This move towards having multiple international partners is aimed at reducing India’s dependence on any one source of military equipment and achieving greater defence autonomy. However, multipolarity in defence will only yield a result in the medium to long term. Currently, a major share of all equipment still remains Russian and while New Delhi has started looking at other alternatives to maintain its geopolitical ambitions, it recognises the need to keep Moscow as a historical natural ally. Therefore, signing this agreement and risking potential American sanctions was seen as an important strategic move to maintain its strong defence ties.  

Countering America’s adversaries through sanctions

President Donald Trump signed Countering America’s Adversaries Through Sanctions Act (CAATSA) into law in August 2017 to impose sanctions on Iran, North Korea, and Russia for actions that have compromised American national security. Moscow has been targeted for “malign activities”, especially for interference in the US presidential elections, and its destabilising impact on Ukrainian geopolitics and economy. CAATSA is aimed at crippling the Russian military and energy sector, arguably two of the most important industries for that country. These sanctions will also be extended and imposed on any other party that carries out significant business with Russia in these fields, and threatens Moscow’s closest partners in Asia and the Middle East.

Unsurprisingly, the S-400 is a big export priority for Russia that is keen to maintain its position as a premier arms exporter. The Indian-Russian agreement echos a similar deal with Turkey, which despite being a NATO ally, broke away from existing trends to sign a provisional agreement to buy the S-400s. This attracted major concern from Washington, where lawmakers attempted to block American F-35 Joint Strike Fighters from being transferred to Turkey as a form of punishment and retaliation.

Similarly, America imposed sanctions on China last month for purchasing Russian military equipment, including the S-400, under CAATSA legislation. Tensions have escalated unchecked owing to a trade war initiated by President Trump. These sanctions only further deteriorated relations, with Beijing expressing its indignation over the move and complaining that basic norms of international relations were violated. These sanctions, however, can be seen as more as posturing for punishing China’s rising assertiveness in the region rather than actually reducing its dependence on Russia.  It is unlikely that China will make any major concessions on its core defence deals with Moscow and the only substitute for these imports will be the indigenous equipment China produces with a rapid advancement in its military technology.

Unlikelihood of American sanctions on India

President Trump is unlikely to sanction India for the following reasons. Firstly, India is hopeful for a waiver under Section 231 of CAASTA where US officials certify that the applicant country is “substantially reducing the number of significant transactions” with targeted Russian interests in the military and energy sectors. In addition to this, the authorities also need to confirm that the applicant does not pose a threat to American national security by acquiring Russian equipment. This is where the case with India is different. While China is viewed as an emerging rival and attracts sanctions, India is considered a key ally. Would China, an aggressor in the Indo-Pacific region, buying Russian equipment pose a greater threat to US national security than India buying the same equipment? The answer is yes.

The American Embassy in New Delhi commented after the deal that CAATSA legislation was not intended to “impose damage to the military capabilities of our allies or partners.” This forms a caveat that sanctions will be decided on a case-to-case basis, perhaps even be rather subjective. Secretary of State Mike Pompeo and Defence Secretary James Mattis have argued for India receiving a waiver to go ahead with this S-400 deal. America has used India over the past two decades to counter the prominence of China in the region and it is unlikely to punish an ally for bolstering its defence mechanism for tackling threats emanating from Beijing.

Furthermore, another exemption which is likely to become the 2019 National Defence Authorisation Bill, is based on the condition of determining whether the entity in question is taking “significant and verifiable steps” or “has agreed to reduce reliance” on Russia over a “specified period.” As the above mentioned data suggested, Indian dependence on Russia has been uniform while a partnership with the US has increased manifold. America is the main beneficiary of the imports diversification in India, and can use the CAATSA leverage to sign pending foundational defense agreements and sell more American arms to an expanding Indian market.

Finally, while CAATSA intends to wean other countries off Russian equipment and energy, it unfairly compromises their current national security which is reliant on Russian imports. US authorities will recognise that given India’s deep security ties with Russia, it is highly unlikely to side with Washington over Moscow. Sanctions will give rise to an anti-American sentiment that both counties have worked over the past two decades to reduce within India. Therefore, it is a better strategy to substitute Russian presence in the medium to long term. rather than jeopardise an important strategic relationship over one transaction.

About Author

Malvika Singh

Malvika is an analyst specialising in the political economy of developing countries. She has previously worked at NITI Aayog, the official think-tank of the Indian Government, and as a campaign assistant to Members of Parliament during national elections. She holds an MSc in Comparative Politics with a specialisation in Political Economy from the London School of Economics and a BA Honours in Politics from the University of Nottingham.