.
The Minister of External Affairs, Sushma Swaraj has made it clear that India only follows UN sanctions and does not recognize the unilateral sanctions by the United States. This might be seen as a shift from the camaraderie shared by both countries in recent times. The U.S. unilateral sanctions have not only complicated relations with India but also with the European Union and other parties to the Joint Comprehensive Plan of Action (JCPoA).
However, the U.S. Secretary of State Mike Pompeo has made a statement that allies like India should be exempted from Countering American Adversaries Through Sanctions Act (CAATSA); the Senators in U.S. Congress are noncommittal to the proposed waivers. The U.S. backing out from JCPoA has already put its relationship with EU under strain. The push for a waiver by the U.S. Secretary of State might be a face-saving grace as America’s reliability as a global power and the unpredictable nature of the current U.S. administration is questioned.
India’s interests in Iran are two-fold: the Chabahar Project and a significant chunk of India’s oil imports come from Iran. The sanctions will render the use of dollars illegal by August 2018 because of CAATSA. Due to fears of the current financial embargo, it is becoming difficult for India to pay in Indian Rupees. The Reserve Bank of India and the Ministry of External Affairs need to chart out a new payment system while avoiding sanctions.
While the Indian Government will take over Chabahar under the internal lease agreement, the ramifications of the sanctions on Chabahar could be banks backing out due to fear of U.S. sanctions. The Chabahar project is India's strategic roadmap to connect with Afghanistan and Central Asia—a project much older compared to China's Belt and Road initiative. The Chabahar port will give India direct access to Afghanistan and help increase its role there, which is in U.S. interest. The U.S. pulling out of the JCPoA poses a major threat to India's role in Afghanistan and its warm relations with Iran.
India-Russia relations have been strained due to the U.S. increasingly becoming one of India's largest arms suppliers and threatening the Russian dominance on the Indian defence market. One way which the U.S. sanctions are affecting this relationship is the S-400 Triumf sales to India. S-400 is a potent Surface to Air missile system, which would equip the Indian Air Force to strengthen India's Air defence system. CAATSA threatens India's purchase of this missile system and has infuriated the Ministry of External Affairs and Ministry of Defense in India.
India's reliance on Iran for oil and Russia for defense equipment could be choked due to the unilateral sanctions by the U.S. on various important entities, personalities, and institutions in these countries. The U.S. in recent times has been more than enthusiastic about its relationship with India by backing UNSC permanent membership and NSG membership although with not much success. The Indo-U.S. relations has always been a contentious issue with successive governments in India and the U.S. as the range of relationship has not been denied by any side since 1947. The relationship between the two countries has seen the good, the bad and the ugly.
The recent statement by the Minister of External Affairs, Sushma Swaraj who said India will not be recognizing the U.S. unilateral sanction has reinforced India's core principle of Non-Alignment. Prime Minister Modi's visit to Russia and Mrs. Swaraj meeting with her counterpart from Iran is not necessarily a shift but adhering to India's unequivocal stand on not relenting to these unilateral sanctions directly or indirectly.
For the U.S., India seems like a viable option to counter the growing Chinese threat. Increasing unwarranted Chinese military developments in South China Sea and recent uptick in the People’s Liberation Army Navy activity in the Indian Ocean is a cause of worry for both India and the U.S. While the U.S. Senate is not on board with the waivers asked by Secretary Pompeo, it is an indication that the U.S. administration is interested in having better relations with India. The Pentagon changing the U.S. Navy’s biggest and oldest fleet command name to Indo-Pacific command from Pacific Command (PACOM) might be symbolic, but it is the least the United States could do to show seriousness about their commitments towards better relations with India in light of CAATSA.
The unpredictable nature of U.S. foreign policy since 2016 has to be taken into account as far as Indo-U.S. relations are concerned. The CAATSA dilemma in no way should mean that the relationship has to be built from the ground up. Instead, India taking up these issues with the U.S. should be viewed as evidence of India’s increasing role in the international arena, which is not ready to give up its relations with other allies to accommodate U.S. interests. For the U.S.-India relationship to move forward it has to be mutually beneficial and cannot be based on just convenience.
About the author: Aayush Mohanty is a Research Associate at Vivekananda International Foundation based in New Delhi, India.
Photo: AP/Gurinder Osan
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
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Indo-U.S. Relations Dilemma: CAATSA
June 15, 2018
The Minister of External Affairs, Sushma Swaraj has made it clear that India only follows UN sanctions and does not recognize the unilateral sanctions by the United States. This might be seen as a shift from the camaraderie shared by both countries in recent times. The U.S. unilateral sanctions have not only complicated relations with India but also with the European Union and other parties to the Joint Comprehensive Plan of Action (JCPoA).
However, the U.S. Secretary of State Mike Pompeo has made a statement that allies like India should be exempted from Countering American Adversaries Through Sanctions Act (CAATSA); the Senators in U.S. Congress are noncommittal to the proposed waivers. The U.S. backing out from JCPoA has already put its relationship with EU under strain. The push for a waiver by the U.S. Secretary of State might be a face-saving grace as America’s reliability as a global power and the unpredictable nature of the current U.S. administration is questioned.
India’s interests in Iran are two-fold: the Chabahar Project and a significant chunk of India’s oil imports come from Iran. The sanctions will render the use of dollars illegal by August 2018 because of CAATSA. Due to fears of the current financial embargo, it is becoming difficult for India to pay in Indian Rupees. The Reserve Bank of India and the Ministry of External Affairs need to chart out a new payment system while avoiding sanctions.
While the Indian Government will take over Chabahar under the internal lease agreement, the ramifications of the sanctions on Chabahar could be banks backing out due to fear of U.S. sanctions. The Chabahar project is India's strategic roadmap to connect with Afghanistan and Central Asia—a project much older compared to China's Belt and Road initiative. The Chabahar port will give India direct access to Afghanistan and help increase its role there, which is in U.S. interest. The U.S. pulling out of the JCPoA poses a major threat to India's role in Afghanistan and its warm relations with Iran.
India-Russia relations have been strained due to the U.S. increasingly becoming one of India's largest arms suppliers and threatening the Russian dominance on the Indian defence market. One way which the U.S. sanctions are affecting this relationship is the S-400 Triumf sales to India. S-400 is a potent Surface to Air missile system, which would equip the Indian Air Force to strengthen India's Air defence system. CAATSA threatens India's purchase of this missile system and has infuriated the Ministry of External Affairs and Ministry of Defense in India.
India's reliance on Iran for oil and Russia for defense equipment could be choked due to the unilateral sanctions by the U.S. on various important entities, personalities, and institutions in these countries. The U.S. in recent times has been more than enthusiastic about its relationship with India by backing UNSC permanent membership and NSG membership although with not much success. The Indo-U.S. relations has always been a contentious issue with successive governments in India and the U.S. as the range of relationship has not been denied by any side since 1947. The relationship between the two countries has seen the good, the bad and the ugly.
The recent statement by the Minister of External Affairs, Sushma Swaraj who said India will not be recognizing the U.S. unilateral sanction has reinforced India's core principle of Non-Alignment. Prime Minister Modi's visit to Russia and Mrs. Swaraj meeting with her counterpart from Iran is not necessarily a shift but adhering to India's unequivocal stand on not relenting to these unilateral sanctions directly or indirectly.
For the U.S., India seems like a viable option to counter the growing Chinese threat. Increasing unwarranted Chinese military developments in South China Sea and recent uptick in the People’s Liberation Army Navy activity in the Indian Ocean is a cause of worry for both India and the U.S. While the U.S. Senate is not on board with the waivers asked by Secretary Pompeo, it is an indication that the U.S. administration is interested in having better relations with India. The Pentagon changing the U.S. Navy’s biggest and oldest fleet command name to Indo-Pacific command from Pacific Command (PACOM) might be symbolic, but it is the least the United States could do to show seriousness about their commitments towards better relations with India in light of CAATSA.
The unpredictable nature of U.S. foreign policy since 2016 has to be taken into account as far as Indo-U.S. relations are concerned. The CAATSA dilemma in no way should mean that the relationship has to be built from the ground up. Instead, India taking up these issues with the U.S. should be viewed as evidence of India’s increasing role in the international arena, which is not ready to give up its relations with other allies to accommodate U.S. interests. For the U.S.-India relationship to move forward it has to be mutually beneficial and cannot be based on just convenience.
About the author: Aayush Mohanty is a Research Associate at Vivekananda International Foundation based in New Delhi, India.
Photo: AP/Gurinder Osan
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
