CAATSA, a political and a commercial tool

The niggling issue of the US potentially sanctioning India for acquiring Russian materiel to meet its urgent military needs simply refuses to go away. For, looming menacingly over defence equipment purchases from India’s oldest, largest and reliable supplier of military goods is the capricious Countering America’s Adversaries Through Sanctions Act (CAATSA) of the US.

In comments to the UK’s Jane’s Defence Weekly in late June, immediately after New Delhi had announced its intent to procure 33 Russian combat aircraft for the Indian Air Force (IAF), a senior US State Department official ominously declared that India was not ‘safeguarded’ from penalties under CAATSA.

In January 2017, Washington had imposed CAATSA against Russian defence, security, gas and oil entities in retaliation to Moscow’s military intervention in Ukraine and its alleged meddling in the 2016 American presidential elections. Thereafter, President Donald Trump had signed CAATSA into law in a move that periodically threatens to adversely impact India and others, like China and Turkey, procuring assorted Russian defence hardware.

“I can confirm that we urge all of our allies and partners to forego (defence) transactions with Russia that risk triggering sanctions under CAATSA,” the unnamed official told the British publication. He went on to state that though Washington could not “prejudge whether a specific transaction would result in sanctions, it was important to note that CAATSA did not have any blanket or country specific waiver provision.”

“There are strict criteria for considering a waiver, and each transaction is evaluated on a case-by-case basis,” Jane’s quoted the US official as saying. Secretary of State (Mike Pompeo) has not made any determination regarding the significance of any transaction (with Russia) involving India, he enigmatically added, but did not elaborate.

A few days later, on July 3, India’s Ministry of Defence (MoD) formally approved the $2.43-billion acquisition of 21 second-hand MiG-29 Fulcrum single-seat fighters, including two dual-seat trainers — retrofitted to MiG-29M standards and 12 Sukhoi Su-30MKIs, to be licence-built by the state-owned Hindustan Aeronautics Limited.

On closer examination, the veiled CAATSA threat by Washington, targeted at India over acquiring Russian fighters, appears to be more a commercial bludgeon than a principled attempt to penalise a hegemonic and politically meddlesome Moscow. Accordingly, it also leads to the obvious inference that the Act stems largely from mercantile pique over Delhi not acquiring US fighters like Lockheed Martin’s single-engine F-16s or Boeing’s twin-engine

F-18s or preferably both for the IAF and even the Indian Navy.

The US has long been wanting to sell India these fighters, particularly the F-16 ‘Fighting Falcon’ variant, dubbed the F-21, that was unveiled at Aero India 2019 in Bangalore. Little more than a warmed up or re-branded F-16 that dates back to the mid-1970s, it makes excellent commercial sense from the US viewpoint to ‘persuade’ India to licence-build this fighter for the IAF to meet its longstanding requirement for an additional 114 combat aircraft to make up for the depleted fighter squadrons. Ironically, it’s akin to the glib US salesman’s apocryphal ruse of making money from selling old rope.

With F-16s being phased out of the US Air Force, and their plant at Fort Worth in Texas shutting down after 40 years, shifting the ageing fighters’ manufacturing facility to India, would keep the line going for several more years, besides

providing employment in the US under Trump’s ‘America First’

initiative. The IAF’s steadfastness, however, in quietly opposing the

F-21 acquisition has been irksome to Washington, and could well

be the motive behind its veiled threat of invoking CAATSA against India that has opted for Russian fighters instead.

Washington’s earlier, more significant ire, was against India’s October 2018 acquisition of five Russian S-400 ‘Triumf’ air defence missile systems for the Indian Air Force, over Lockheed Martin’s Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (THAAD) anti-ballistic missile defence systems.

The IAF had rejected the US systems for the seemingly more capable and cheaper S-400 fitted with a 92N6E electronically-steered phased array radar, dubbed ‘Grave Stone’ that is capable of tracking 300 enemy targets over a 600-km distance and eliminating them with assorted missiles.

After India inked the S-400 deal, the CAATSA threat surfaced, but an undaunted MoD made advance payments for it to Moscow, using obscure banks in India and Russia with no or limited exposure to international trading. Moscow quaintly refers to this phenomenon as ‘de-dollarisation’ of its dealings.

Around the same time, India also inked a $950-million deal for the import of two Admiral Grigorovich-class stealth frigates for the Navy to be built at Russia’s Yantar Shipyard in Kaliningrad. Two similar frigates would also be licence-produced at Goa Shipyard Limited following a transfer of technology.

Soon after, in March 2019, India signed a $3-billion inter-governmental agreement to lease a second Russian Project 971 Akula-class nuclear-powered attack submarine for the Navy for 10 years, for delivery by 2025. India is also in advanced negotiations with Russia to licence-build 7,50,000 Russian Kalashnikov AK-203 assault rifles for all three services at the Ordnance Factory Board facility at Korwa near Amethi.

Surprisingly, there was no US reaction to these supplementary Russian deals, leading thereby to the elementary deduction that Washington is simply not in competition to fulfill any of these sundry requirements, and hence, commercially indifferent towards them. Therefore, it follows that for the US, CAATSA surfaces specifically only when American materiel imports are directly threatened by cheaper and, in some instances, more efficient Russian equipment.

The questions, thus, is: Is CAATSA simply precision-bombing by the Pentagon at the behest of the powerful arms lobby in the United States? Or is it a tool to preclude Moscow’s involvement in the upcoming presidential elections?