LONDON: Defying threats of US sanctions, India signed a $5.4 billion deal to buy the S-400 Triumf air defense missile system from Russia during President Vladimir Putin’s visit to New Delhi in early October. This is one of the biggest Indo-Russian defense deals in recent times with expectation in some quarters that it could revive an otherwise flagging Indo-Russian relationship. During the visit, the two nations “reaffirmed their commitment to the Special and Privileged Strategic Partnership between India and Russia,” and underscored the value of multipolarity and multilateralism.
The US response to the deal was quick and terse, and India’s move could attract sanctions under the Countering America’s Adversaries Through Sanctions Act on defense purchases from Russia, approved by US Congress 98 to 2 in 2017. While underlining that act is not aimed at stymieing military capabilities of American “allies or partners” and that the intent is “to impose costs on Russia for its malign behavior, including by stopping the flow of money to Russia’s defense sector,” the United States made it clear that waivers would be considered on a “transaction-by-transaction basis.” More ominously, US President Donald Trump suggested that India would soon “find out” if the punitive sanctions apply over the Russian deal as the State Department argues such deals are “not helpful” and the US is reviewing them “very carefully.”
Indian defense planners view the S-400 as a key capability enhancer as it can track multiple incoming targets including aircraft, missiles and unmanned aerial vehicles up to 400 kilometers in distance and 30 kilometers in altitude. With the deal, India has ensured that Russia will remain the main supplier of high-tech defense equipment for the foreseeable future while challenging Washington on an issue now regarded as the primary national security challenge by many in the United States.
It’s no surprise, therefore, that this was among the main issues during September’s inaugural 2+2 dialogue between the foreign and defense ministers of India and the United States. Officials signed a Communications Compatibility and Security Agreement, or COMCASA, one of four foundational agreements that the United States signs with its closest defense partners to facilitate interoperability between militaries and sale of high-end technology. The General Security of Military Information Agreement was signed in 2002 and the Logistics Exchange Memorandum of Agreement in 2016, and so this one had been pending for some time. The final agreement required is the Basic Exchange and Cooperation Agreement facilitating geospatial exchange, and negotiations have yet to start. COMCASA is expected to facilitate access to advanced defense systems and enable India to optimally utilize its existing US-origin platforms.
Even under an administration as mercurial and transactional as President Donald Trump’s, Indo-US relations have managed to gather momentum, shaped by the underlying strategic logic of the convergence between the two nations. India has managed to find a central place in the Trump administration’s strategic worldview as outlined in the National Security Strategy and National Defense Strategy. Both on China and Pakistan, the Trump administration has demonstrated a willingness to push the boundaries – this is reflected in its approach to make India more integral to Asian balance of power as outlined in the US Indo-Pacific strategy as well as in an attempt to reshape the contours of America’s South Asia strategy, which acknowledges India’s centrality in the future of Afghanistan while recognizing Pakistan as the source of the problem.
The US position in the Indian defense matrix has also evolved with India buying $18 billion worth of defense items from the United States since 2008, though the much-hyped Defense Technology and Trade Initiative aimed at boosting joint development and co-production of defense equipment fails to live up to expectation so far. The 2+2 dialogue saw the two nations focusing on enhancing private defense industry collaboration, helping Indian defense manufacturers to join the US military supply chain, thereby boosting the Modi government’s “Make in India” initiative as well as placing innovation at the heart of this defense collaboration. Given these high stakes, both US Secretary of State Mike Pompeo and Secretary of Defense James Mattis have supported waivers for India on its weapon deals with Russia.
The United States imposed sanctions in September on Chinese entities for their S-400 deal. If Trump makes an exemption for India, that would have global reverberations. Already, suggestions are emanating from Beijing that India and China need to deepen cooperation to fight trade protectionism in the wake of the unilateral approach adopted by the United States on trade-related disputes. China is taking a new cooperative approach towards India, and the Trump administration’s outreach is part of this complex equation.
The other challenge facing Indo-US relations is the persistent question of Iran. After Trump withdrew from the international deal for containing Iran’s nuclear weapons program in May, he signed an executive order officially reinstating US sanctions against Iran. The full weight of these sanctions come into force on November 4 despite most of the world opposing Washington’s move.
India regards it a priority to obtain waivers from Washington. The country is the second largest buyer of Iranian oil after China. Indian firms have already started feeling the pressure of US sanctions, reducing oil intake from Iran, though that is unlikely to come down to zero. Iran accounts for around 10 percent of India’s total oil imports, and Reuters reported that Indian refiners reduced monthly crude loadings from Iran for September and October by nearly half from earlier this year. Also, New Delhi is in a quandary as falling rupee and rising oil prices are generating public pressure. In this context, India would be hard pressed to ignore Iran and its concessionary rates on oil purchases . Two Indian oil firms have placed orders to import Iranian crude, and in an attempt to bypass US sanctions, New Delhi is trying to evolve another payment system to buy Iran’s oil and use Indian rupees.
On the questions of both Russia and Iran, India has indicated that it must keep its channel of communications with the United States open, and Washington has indicated that it remains sensitive to Indian needs. Equally interesting is that there have been no public spats between India and the United States on these issues – a sign of growing maturity in the relationship. Sanctions on India would be counterproductive to Indo-US ties by pushing India into a Russian embrace and jeopardizing Indian interests in the Middle East. Washington has far better appreciation of Indian sensitivities today, and New Delhi displays more skillful strategic posturing when it comes to the United States. Giving in to American public pressure on these issues would open New Delhi to charges of giving up its “strategic autonomy” – a charge any Indian government would like to avoid with elections around the corner.
The 2+2 joint statement talks of the need “to ensure freedom of the seas, skies, uphold the peaceful resolutions of the maritime disputes, promote market-based economics and good governance and prevent external economic coercion.” So long as the two sides can keep the focus on the big picture, differences on Russia and Iran are not likely to alter the broader trajectory of the relationship between the world’s two great democracies.