Context:

• The India-Russia dialogue should not get inextricably entangled in the India-U.S. dialogue.
• The shadow of America loomed over the India-Russia summit recently held in New Delhi
• The question that dominated the meet was whether or not the deal for the Russian air defence missile system, the S-400, would go through
• The contract for the S-400 was signed at the Delhi summit

CAATSA:

• The U.S. has been publicly warning for months that this purchase could attract provisions under the Countering America’s Adversaries Through Sanctions Act (CAATSA), which authorises the U.S. government to impose sanctions on entities for “significant” defence transactions with Russia
• The sanctioned entity would be cut off from all business in the U.S. and with U.S. companies

Outlook on neighbourhood:

• There is a general perception that Indian and Russian perspectives today differ on key issues in India’s neighbourhood — Pakistan, Afghanistan and China — and on India’s strategic linkages with the U.S., including on the Indo-Pacific. These issues would certainly have figured in the various meetings.
• In the public domain, we have only Mr. Modi’s bland assertion that there were detailed discussions on “all international issues of mutual interest”, specifically citing “common interests” on terrorism, Afghanistan and the Indo-Pacific.
• On Pakistan, one might note the nuance that the Joint Statement mentions cross-border terrorism, which some earlier Joint Statements did not.
• On Afghanistan, India expressed support for the “Moscow format”, in which Russia involves regional countries and major powers in an effort to draw the Taliban into negotiations with the Afghan leadership.
• The U.S. has boycotted this initiative, but has initiated its own dialogue with the Taliban. A U.S. Special Representative for Afghanistan is now touring Afghanistan, Pakistan, the United Arab Emirates, Qatar, and Saudi Arabia to generate help in bringing the Taliban to the negotiating table. India is not on his itinerary.
• The Joint Statement has the usual laundry list of priority areas of cooperation, including infrastructure, engineering, natural resources, space and technology. It expresses the commitment to raise trade and investment to a level more commensurate with the potential. 

Business despite sanctions

• There are obvious opportunities for cooperation between Russia, which is natural resources-rich, and India, which is resource-hungry.
• Whether they are exploited would depend on how well India’s economic ministries, banks and business community understand the ground realities of doing business with Russia.
• The U.S. and European sanctions on Russia between 2014 and 2016 are sector- and currency-specific
• With proper structuring of business deals, trade and investment exchanges with Russia are possible, and without losing business with Europe and America

The threat to India-Russia defence cooperation:

• The threat to India-Russia defence cooperation extends well beyond the suspense over the S-400 deal. Every potential India-Russia defence deal could be subjected to a determination on applicability of sanctions.
• Actually imposing sanctions would hurt U.S. defence sales to India, defeating one of the principal objectives of the legislation.
• The effort would likely be to achieve desired results with the threat of sanctions.

Conclusion;

• Given the political dynamics in the U.S. today, a systemic solution to this problem is not evident. However, it has to be on the India-U.S. dialogue agenda. The India-U.S. strategic partnership is based on a strong mutuality of interests, but it was not intended to have the exclusivity of an alliance. India should not have to choose between one strategic partnership and another. The India-Russia dialogue should not get inextricably entangled in the India-U.S. dialogue.

Source:TH