Imposing CAATSA sanctions threatens the Quad

14 December 2021

Earlier this year, Republican Senator Ted Cruz spearheaded efforts to exempt India from penalties under the Countering America’s Adversaries Through Sanctions Act (CAATSA). The proposed legislation, dubbed the Circumspectly Reducing Unintended Consequences Impairing Alliances and Leadership (CRUCIAL) Act, exempts all of Washington’s Quad partners — Australia, Japan, and India — from CAATSA sanctions for 10 years. Legislated in response to escalating Russian aggression in Europe, CAATSA aims to punish Moscow by increasing the cost for third party States to procure sophisticated Russian military equipment. While Australia and Japan have never sourced armaments from Russia, and nor are they likely to in the future, India has long relied on Moscow for military hardware.

Unfortunately, New Delhi’s plans to acquire the Russian made S-400 missile system risk running afoul of CAATSA. The Biden Administration must approach this quandary cautiously. Should Washington impose CAATSA sanctions on New Delhi, the attendant barriers to effective US-India military cooperation may unnecessarily frustrate technology transfer and impede practical collaboration in the Indo-Pacific. Such a move would also potentially delay the operationalisation of the Quad as an effective collective defence partnership.

Origins and consequences

India first entered into negotiations with Russia to purchase the S-400 in 2016. A highly sophisticated high-altitude missile aerospace defence system (HIMADS), the S-400 Triumf platform consists of multifunction radars, autonomous detection, and anti-aircraft missile systems capable of engaging multiple aerial targets such as aircraft and UAVs simultaneously. Border skirmishes with the PLA and China’s deployment of its S-400 batteries along the Line of Actual Control (LAC) meant that India’s acquisition of the S-400 was necessary to restore a favourable balance of power on the subcontinent.

India must be exempted from CAATSA sanctions if the Quad is to become an effective military counterweight to China in the Indo-Pacific.

Unfortunately, following the passing of CAATSA in 2017, the Trump Administration cautioned New Delhi that the USD 5.5 billion deal would not enjoy a waiver, though declined to impose them with immediate effect. Even so, CAATSA sanctions have loomed large as a potential stumbling block to the expansion of US-India military ties. Despite India’s elevation in Washington’s Indo-Pacific strategic calculations, senior Biden administration officials have thus far remained equivocal on the CAATSA matter. For instance, Secretary of Defence Lloyd Austin refused to rule out the possibility of sanctions during his trip to India earlier this year. Stimson Centre reporting suggests that should sanctions materialise, the recent upswing in US-India bilateral relations could stall and may, in fact, reverse.

Bilateral ties aside, the Quad could be another significant casualty of a CAATSA-engendered deterioration in relations. Having started life as an informal diplomatic dialogue, the Quad has been increasingly framed by analysts as a potential mechanism for balancing against growing Chinese adventurism in the Indo-Pacific. Previously regarded as a reticent participant, lethal border clashes between Indian and Chinese forces along the Ladakh border have seen New Delhi overcome its initial reluctance to invest wholeheartedly in the Quad. Possessing the world’s fifth most powerful military and sixth-largest economy, India’s growing interest in seeing the Quad succeed is a boon to America’s regional aspirations.

Sanctions, however, risk stalling the momentum of expanding US-India relations and are unlikely to dissuade India from persisting with its arms relationship with Russia. CAATSA’s objective of deterring states from procuring advanced Russian military capabilities is fundamentally antithetical to New Delhi’s decades-long commitment to multi-alignment and strategic autonomy. Moreover, given New Delhi’s historic ties to Moscow, approximately 86 per cent of India’s current military equipment is of Russian origin. Therefore, if India’s defence systems are to be adequately maintained, ongoing engagement with Moscow is necessary, a contingency the CAATSA legislation accounts for by offering case-by-case exemptions for states that may require Russian armaments to maintain legacy systems on the condition that they commit to divesting from Russia’s arms industry.

Avoiding sanctions would benefit the Quad

Compared to the well-established India-Russia arms relationship, CAATSA sanctions signal the conditionality of future dealings with the US on these same issues. While hardly a death knell to US-India relations, if engagement with Washington on advanced military capabilities is seen as limiting rather than empowering, New Delhi may either become more ambivalent about committing to US-led regional partnerships like the Quad or may simply not enjoy the degree of interoperability required to advance military cooperation within that grouping. Furthermore, alienating New Delhi through CAATSA sanctions would allow India’s other major defence partners, like France, to leverage the fallout. Although French systems would be preferable to Russian ones, it is nonetheless an inauspicious and ultimately avoidable eventuality for Washington, which may already be concerned about how India’s piecemeal procurement of armaments could frustrate interoperability in the Indo-Pacific.

Those against a waiver may be inclined to point to Turkey as a precedent-setter for CAATSA enforcement as a means of punishing Russia, protecting US technology, and supporting interoperability. In reality, however, the Turkish case is both an inappropriate comparison and a cautionary tale for the corrosive impact sanctions can have on important strategic partnerships. In December 2020, Turkey became the first state punished under CAATSA for “knowingly engaging in a significant transaction with Rosoboronexport (ROE), Russia’s main arms export entity”. Unlike India, Turkey’s obligations as a NATO ally and as a participant in the F-35 program limited Washington’s available responses to Ankara’s S-400 purchase. Officials in Washington were cognisant of the critical interoperability and intelligence issues presented by the potential for interface between the S-400, advanced US stealth aircraft, and NATO command and control systems. Consequently, sanctions became unavoidable from the US perspective.

India, however, is a different story and should not be bound by the same expectations. A non-treaty ally, India’s decision to procure the S-400 predates the invention of the CAATSA regime, and Indian forces are not nearly as integrated into regional collective defence arrangements as Turkey is with NATO. To be sure, the interoperability issues posed by India’s hodgepodge amalgamation of weapons systems and the potential intelligence risks presented by regular interfacing between Russian radar equipment and advanced US air and stealth technologies are not unwarranted. However, these need not compromise advancing military cooperation between Quad members. Chiefly a maritime partnership, the Quad’s ultimate goal should be a strategy of collective defence wherein its members coordinate naval capabilities to deter maritime coercion, ensure freedom of navigation and balance against an adventurous PLAN.

India’s planned deployment of the S-400 along its contested borders with China could likely be insulated from other efforts to build maritime interoperability in the Indo-Pacific. Ultimately, India’s maritime commitment to the Indo-Pacific is of greater strategic significance to not only the US but also for Australia and Japan’s regional strategies, compared to New Delhi’s efforts to restore a favourable balance of power on the subcontinent. In fact, possessing the S-400 significantly bolsters India’s defensive capabilities, making New Delhi a more effective security partner for Washington.

A need to empower allies

In light of China’s ascendence, the Biden Administration has already made efforts to empower allies like South Korea via scrapping the US-Korea Missile Guidelines, completely removing range limitations on Korean missile capabilities. A CAATSA waiver for India would be a comparable example of empowerment, ensuring America’s key partners are well-positioned to defend themselves against potential aggression.

Washington must be judicious in its enforcement of CAATSA sanctions to avoid allowing a desire to punish Russia from straining the still-nascent quadrilateral alliance. Alienating New Delhi would be problematic for President Biden’s still inchoate, although clearly Quad-focused Indo-Pacific policy. Therefore, whether through presidential waiver or the more comprehensive assurances afforded under Senator Cruz’s proposed CRUCIAL Act, India must be exempted from CAATSA sanctions if the Quad is to become an effective military counterweight to China in the Indo-Pacific.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Joshua Brannon is a research intern with the United States Studies Centre’s Foreign Policy and Defence program, and a graduate student at the University of Sydney, earning his master’s in International Relations, specialising in US Foreign Policy. He holds a bachelor’s degree from the University of New South Wales where he studied History and Asian Studies. Image credit: Flickr/US Secretary of Defense.