The battle is only growing more gruesome by the day as Russia continues its invasion of Ukraine. In the midst of this, countries are picking a side and India too has been faced with the tough choice since the beginning of either voting against Russia or supporting it. Up until now, India has been playing diplomatic, by pushing for peaceful negotiations and talks on both ends. At The United Nations Security Council meeting, India was one of the few countries that did not vote against Russia, and this abstention on the UNSC vote wasn’t taken too well. The United States could impose sanctions on India under Countering America’s Adversaries Through Sanctions Act (CAATSA). What is this, and how will it affect India if it does come into play is the focus of this article.
What is CAATSA?
Countering America’s Adversaries Through Sanctions Act is a US law under which the American Government can impose sanctions on any country that is seen to have "significant transactions with Iran, North Korea or Russia". Having been in force since August 2017, any country that transacts with Russia in the matter of arms and ammunition could face economic penalties by the US.
This could be worrying for India which relies heavily on Russian imports of arms. Data by the Stockholm International Peace Research Institute (SIPRI) suggests that Russia was responsible for 49% of India’s total military imports in 2020. Hence, with the talk of CAATSA, India may face a tough choice of whether to cut off its imports from Russia completely or face sanctions by the United States.
Why does India face the risk of sanctions?
The USSR and India have been close when it has come to the supply of arms and ammunition from the former to the latter. Then in 2018, India took this partnership further by signing a $5 billion deal with Russia for the S400 Triumf. This advanced missile system would help India to counter the challenges it was facing in the Indo Pacific region. Deliveries of this system began in late 2021, and according to the rules of CAATSA, India was at the risk of having sanctions imposed on itself.
However, the United States at the time had held off imposing sanctions as both India and the US were also growing in partnerships in various other areas. However, now with the United States and Russia being at loggerheads and India’s position in the middle, if India should continue with this deal with Russia, it could be witnessing sanctions.
What do experts feel about CAATSA?
The talk of the sanctions all began when on March 2, Assistant secretary of state for south and central Asian affairs Donald Lu told the US senate's foreign relations committee, “India is a really important security partner of ours now. And that we value moving forward that partnership and I hope that part of what happens with the extreme criticism that Russia has faced is that India will find it’s now time to further distances.”
Indian analysts too share concerns about how CAATSA can impact India, especially in the light of India’s diplomatic stance in the Russia Ukraine conflict. Mukesh Aghi, President and Chief Executive Officer of the US-India Strategic Partnership Forum said to CNBC, “CAATSA puts India in a tight spot because the country has traditionally purchased Russian defence systems. Between 2004 and 2014, roughly 75 per cent of India’s weapons imports were from Russia. CAATSA asks India to stop on a dime, reverse its spending decisions, and cut out a long-time supplier.”
Senator Ted Cruz said during a hearing on pending nominations by the powerful Senate Foreign Relations Committee said “There are reports that the Biden administration is contemplating imposing CAATSA sanctions against India, the largest democracy on Earth, a decision that I think would be extraordinarily foolhardy.”
He also tweeted that “The Biden administration is very, very slowly discovering that alienating allies and boosting enemies is not a great way to conduct foreign policy. All it took were several generational global catastrophes and wars abroad, and 1970s inflation and gas prices at home.”
What will be the implications of CAATSA on India?
While nothing is clear yet as to what would be the exact implications of the law in India and what sanctions could entail, in 1998, the US had sanctioned India under the Glenn Amendment due to the underground nuclear tests carried out in Pokhran. The following was seen at the time of the sanctions.
- All aid except humanitarian aid was cut off by the US to India
- Export of defence was banned
- American credit was banned
- International lending to India that happened via the World Bank was opposed
The sanctions came to an end between 1999 and 2001. If the CAATSA does come into force, it will undoubtedly strain ties between the two countries. It remains to be seen whether the US will impose these or offer a waiver for India.