What India can do to avoid US sanctions over Russia

The CAATSA legislation compels the US to impose secondary sanctions on any entity that does business with the Russian defence industrial complex. The S-400 delivery to India would constitute such a trigger

Even as President Joe Biden and Prime Minister Narendra Modi are set to meet this week for the in-person Quad summit, they could face a devastating setback if the United States (US) sanctions India in the coming months. The US’s Countering America’s Adversaries Through Sanctions Act (CAATSA) could compel the Biden administration to impose sanctions on India when it takes delivery of the Russian S-400 air defence system at the end of 2021. This move could deal a blow to the relationship, and their Indo-Pacific strategies. But if Indian leaders can acknowledge the US’s ire with Russia, assume greater burden-sharing, and adopt realism in its dealings with DC, it might better position itself for a sanctions waiver.

Representational Image. (File photo)

The CAATSA legislation compels the US to impose secondary sanctions on any entity that does business with the Russian defence industrial complex. The S-400 delivery to India would constitute such a trigger. Most experts conclude that US sanctions on India would be self-defeating as it would damage defence relations, raise concerns about US unreliability, and harm India’s ability to shape a balance of power in the Indo-Pacific. The US is counting on India to deter and defend against Chinese military aggression and to share the security burden of upholding a rules-based order in the Indian Ocean. India is counting on US partnership to abet its rise in Asia through defence technologies, market access, and political support. Sanctions would compromise critical US and Indian interests in the Indo-Pacific.

The Biden administration is not unaware of the stakes. It has prioritised China as its pacing challenge and the Indo-Pacific as the key theatre for competition. This should be evident in actions, from the Pentagon’s internal China Task Force to the withdrawal from Afghanistan to the nuclear submarine deal with Australia. Nevertheless, Indian strategists should appreciate the context animating the US sanctions.

The US has been under attack by Russia — cyber offensives on US companies and infrastructure, disinformation campaigns sowing division in the American polity, and direct interference in US elections. Congress retaliated with major sanctions legislation — which critics charge was hastily written and poorly crafted — to punish the Russian defence industrial complex, which perpetrated the attack, and is increasingly collaborating with China on advanced military technologies.

CAATSA proponents discount the collateral damage to allies and partners from secondary sanctions as small and manageable compared to the costs inflicted on Russian targets. That India remains silent and even dismissive of these attacks on the US homeland has frustrated US officials, even while Washington has actively backed India with intelligence and equipment in militarised crises with China in recent years.

Sanctions also seek to discourage partners from inducting advanced Russian systems into their arsenals, which could introduce counter-intelligence and cybersecurity risks. This can obstruct the type of US-India defence cooperation that requires network interoperability for joint military operations. But even if the Biden administration concludes that the Indo-Pacific strategy supersedes the Russia policy, India is a vital pillar, and interoperability challenges are surmountable, it still has to deal with Congress.

While the President possesses the legal discretion to issue a waiver, if sidelined, Congress has the power to retaliate with legislation that ties the president’s hands as it did over Turkey. Congress can also jam the Biden administration’s foreign policy efforts, as it has with dozens of senior foreign policy appointments, some specifically over the administration’s Russia policy. Coaxing Congress on a waiver for India costs precious bandwidth and political capital, which an administration has to jealously guard when it also seeks to pass generational legislation overhauling America’s physical and social infrastructure.

India can help its own case. First, it can leverage its voice and find opportunities to condemn the transgressions the US regards as grave threats — cyber attacks, disinformation operations, militarised coercion, election interference — without naming perpetrators.

Second, India can demonstrate its value. While Indo-Pacific partners look to signs of US reliability, Washington seeks new levels of reciprocity. India can visibly take on greater burden-sharing in the Indo-Pacific by securing the maritime commons (through expanded naval operations, access, and intelligence-sharing), ramping up vaccine manufacturing and exports, or leveraging its regional political influence in support of US positions (backchannelling to defuse the Mauritian threat to Diego Garcia). Any of these actions would reveal to US leaders the significant opportunity cost of sanctions.

Third, India can adopt greater realism in its dealings with Washington. Congressional backers of the US-India defence partnership warn of the mounting frustration at India’s expectations of entitlement and exceptionalism. India can start by exercising more judiciousness in sourcing arms procurements, particularly in sensitive domains where it seeks cooperation with the US. India’s proud multi-alignment strategy has to also be accompanied by an acknowledgement of its limits. The AUKUS nuclear submarine deal has revitalized New Delhi’s expectations of big-ticket technology transfers. But India will have to accept that America’s most generous technology partnerships are reserved for its closest treaty allies, who willingly sacrifice some of their sovereignty and make commitments to advance US interests.

Despite this, the US and India can be tremendous partners in the Indo-Pacific, jointly boosting each other’s defence and technological capabilities and coordinating leverage from each other’s political and economic influence to advance mutual strategic interests in the region.

Finally, it would behove both sides to plan for the worst to mitigate consequences if sanctions are implemented. Unlike recent diplomatic crises sparked by indiscretions, both broad and surprising, CAATSA sanctions are predictable and can be narrowly tailored. While India may have to react and even retaliate, it can do so with dispassionate compulsion to contain fallout to a setback rather than a full-blown crisis. If some modest financial penalties, or a foreign air defence system, can unravel the logic of a grand strategy oriented around the Indo-Pacific, it begs the question, how strategic was the partnership to begin with.

Sameer Lalwani is a senior fellow at Stimson Center and a non-resident fellow with George Washington University’s Sigur Center for Asian Studies.

The views expressed are personal