Russia-Ukraine conflict: What is CAATSA that India may be hit with?

If the US decides to impose CAATSA on India, it effectively puts New Delhi in the same category as Tehran and Pyongyang, particularly the second one, which is regarded as pariah by most of the world except the Peoples’ Republic of China. (Photo by Steve DiMatteo from Pexels)

With Indian abstaining for a third time on a UN Security Council (UNSC) vote demanding an immediate Russian withdrawal from Ukraine, the red light has gone up in Washington.

The Biden administration is looking whether to apply or waive sanctions on India for its purchase of the S-400 Triumf missile defence system from Russia, under Countering America’s Adversaries Through Sanctions Act (CAATSA), senior US diplomat, Donald Lu, Assistant Secretary of State for South and Central Asia told members of the Senate Foreign Relations Subcommittee on the Near East, South Asia, Central Asia, and Counterterrorism on March 2.

Why is the US annoyed?

Lu’s remarks came as India drew criticism from US lawmakers, both Republicans and Democrats, at a hearing on the “US relationship with India” for being among 35 nations that abstained on March 3 from a UN vote to rebuke Russia’s invasion.

The US diplomat, however, said that the Biden administration is yet to decide on applying sanctions on India under CAATSA, adding that as "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."

Considered, at least till President Donald Trump was in office, a burgeoning bilateral Indo-US relationship with the `Howdy Trump’ rally in September 2019 the crowning achievement of the warmth between the world’s two biggest democracies, the coming of the new Democratic administration has frayed this association a bit.

Read also: Can sanctions derail India's semiconductor push?

India continued to maintain its `neutral’ stance as it again abstained from voting against Russia on a UN General Assembly resolution on March 3. This is India's third abstention in less than a week on Russia's military offensive in Ukraine.

Despite India's stand, the UN General Assembly adopted the resolution deploring Russia's invasion of Ukraine, with New Delhi and arch-rival Beijing being on Moscow's side.

What is Countering America’s Adversaries Through Sanctions Act (CAATSA)?

The Countering America's Adversaries Through Sanctions Act (CAATSA) is a US federal law that imposed sanctions on Iran, North Korea, and Russia. The bill was passed by the Senate on 27 July 2017, and signed into law on 2 August 2017 by President Trump, who stated that he believed the legislation was "seriously flawed”.

On 15 June 2017, the US Senate voted 98 to 2 for the bill (an amendment to the underlying Iran sanctions bill), which was rooted in a bill introduced in January that year by a bipartisan group of senators over Russia's continued involvement in the wars in Ukraine and Syria and its so-called interference in the 2016 US elections; with regard to Russia, the bill was designed to expand the punitive measures previously imposed by executive orders and convert them into law. The bill in the Senate incorporated the provisions of the Countering Russian Influence in Europe and Eurasia Act that was introduced in May 2017.

How does CAATSA impact India?

As the US strengthens its ties with India as a crucial regional counterweight to China, the Biden administration has delayed enforcement of a law ordering sanctions on India for trading with Russia.

The law deals primarily with India buying high-powered Russian S-400 Triumf missile systems, among the most highly rated in the world, which New Delhi has preferred over possible US alternatives, which includes the Lockheed Martin's THAAD system (short for Terminal High Altitude Area Defense) and Raytheon's Patriot system, although the three vary in capabilities and costs.

Former Indian ambassador Ashok Sajjanhar told Moneycontrol recently that ``the Russian sale of the S-400 Triumf missile will go on as scheduled.”

The Indian government has purchased five S-400 Triumf missile systems from Russia at a cost of almost $5.5 billion in the deal that was initially finalised in October 2018.

Read also: No Russian Grand Prix in future as F1 terminates contract: Official

What happens if US imposes CAATSA on India?

If the US decides to impose CAATSA on India, it effectively puts New Delhi in the same category as Tehran and Pyongyang, particularly the second one, which is regarded as pariah by most of the world except the Peoples’ Republic of China.

It authorises the administration to impose sanctions on countries that purchase major defence hardware from Russia in response to Russia's annexation of Crimea in 2014 and its alleged meddling in the 2016 US presidential elections.

Once CAATSA is imposed, it is going to be very hard for any country to buy major weapon systems from Russia because of the sweeping sanctions now placed on Russian banks.

"What we've seen from India in just the last few weeks, is the cancellation of MiG 29 orders, Russian helicopter orders and anti-tank weapon orders," Lu said, making it clear what the implications were.