Negotiating US Sanctions: RSTV - The Big Picture

Rajya Sabha TV programs like ‘The Big Picture’, ‘In Depth’ and ‘India’s World’ are informative programs that are important for UPSC preparation. In this article, you can read about the ‘The Big Picture’ episode on “Negotiating US Sanctions” for the IAS exam.

Participants:

Anchor: Frank Rausan Pereira
Speakers: Prof. Harsh V. Pant, Head, Strategic Studies, Observer Research Foundation;
Prabhu Dayal, Former Ambassador; K. P. Nayar, Strategic Analyst

Why in the news?

• President Donald Trump on 10 October said that India “will soon find out” about his decision on the punitive CAATSA sanctions after India signed a USD 5 billion deal to purchase the much-vaunted S-400 air defence system from Russia.
• Under the Countering America’s Adversaries Through Sanctions Act or CAATSA sanctions, which was amended early this year, only Trump has the authority for the presidential waiver to India on weapons deal with sanctions-hit Russia.
• India last week inked a USD 5 billion deal to purchase S-400 Triumf air defence system from Moscow.
• Amidst the suspense, Ambassador of Russia to India, Nikolay Kudashev, said that US sanctions will not be a pressure on India-Russia defence deals and the two countries will further intensify their military cooperation and defence purchases in the coming days.
• This edition of the big picture aims to analyse the game of chess between Russia, US and India.

Analysis by the Experts:

What do you make of President Donald Trump’s statement- Is is a threat? Would we get a waiver?

Prabhu Dayal, Former Ambassador, weighed in with his points here.

• There is an ominous ring to what President Trump has said. While we hope for the best, we should be prepared for the worst.
• On India’s part, she has done everything possible to assuage the feelings of the Americans in this regard. India has explained to them that our defence purchases from Russia has come down considerably.
• We have also told them that any purchases which we would intend to make from Russia are not going to be targeted at the United States.
• We have also pointed out that it is in the interest of the United States of America that India’s defence capabilities be increased as they want us to play the role of a partner in the Asia-Pacific region.
• Thus, on our part, we have explained to them at every possible level, our points of view. We have given them very cogent and convincing reasons. Also, frankly, the impression that was created was that they were sympathetic to our point of view.
• However, now things are in a very unpredictable situation. This is particularly true because, only about a month back, the Americans have imposed sanctions against China, for the purchase of the S-400 Missile Defence System.
• India has also announced that she intends to make certain purchases of oil from Iran. Two Indian Companies would be purchasing oil from Iran and that is a matter of concern also to the Americans.
• Thus, it is hard to figure out as to what is really going on in President Trump’s mind.
• However, one should hope for the best but be prepared for the worst.

How is the Congress looking at the present situation and is anything in the Congress’ hands as far as the CAATSA is concerned?

K.P. Nayar, Strategic Analyst, weighed in with his arguments here.

• Congress is likely to be a bigger problem than the President in this situation.
• This is because, most of the Russia related legislations by the Congress, after the alleged interference in the American Presidential Elections, was passed by the Congress unanimously.
• So, Trump cannot even veto the Congressional moves. This is because even if he veto’s, the support for Anti-Russia legislation in the Congress is way above the threshold on all issues.
• Thus, the Congress is very firm. But, at the same time, India enjoys a lot of goodwill in the Congress.

Frank Rausan Pereira interjected here with the below observation:

• There are several senators in the US who have come and said that India is very crucial as far as America’s Indo-Pacific strategy is concerned, thus the Americans, it is believed wouldn’t want to do anything that would irk India.  

• K. P. Nayar then added the point that the India caucus in the House is the biggest caucus on Capitol Hill. It is bigger than even the Israeli caucus.
• The Senate caucus is also very big. While that is true, Russia, for the American strategic community is a different ball game. India must also weigh whether it is worthwhile to use her leverage in the Congress in this particular matter. This is because, there are many other things where we would need the support of the Congress like H1B visas, trade issues, etc.
• Thus, India would have to take the call here. Putin is a friend of Trump, and thus while he (the President of the US) may take a tough line on trade issues and similar things that he sees affects America; India’s relations with Russia is not something which would be bothering him too much.

Is it time for us to call upon our goodwill in the Congress? Perhaps by reaching out to the Indian Diaspora and seeing whether the matter can be settled?  
Prof. Harsh V. Pant weighed in with his arguments here.

• There have been multiple efforts by India in this regard. There have been several back channel negotiations that have happened. For example, National Security Advisor, Ajit Doval met officials from the Pentagon.
• Thus, India is trying to leverage all the instrumentalities at its disposal. But the question that India faces is a very critical one- we think that the administration in the US is a normal administration. But, the current administration acts very differently as compared to any of the previous administrations. Thus, India finds herself in uncharted territory. What India should do is to keep the negotiating channels open and keep the logic of Indo-US partnership front and center when these discussions happen.

We may get a waiver as far as Russia is concerned. However, would we get a waiver as far as Iran and oil are concerned?

Prabhu Dayal, Former Ambassador, weighed in with his points here.

• President Trump doesn’t have that strong a dislike for Russia as he has for Iran. President Trump scrapped the nuclear deal with Iran. But, President Trump has a dislike for CAATSA- for example, while signing CAATSA, he had severely criticised it.
• This is because, from his point of view, CAATSA imposes restrictions on his freedom to conduct foreign relations.  However, he will use CAATSA where it suits him. He has used CAATSA for example to impose sanctions on China. As things stand at the moment for India, the deal with Russia, coupled with the likely import of oil from Iran do give a little ominous touch to the entire scenario.

What has changed in the Iran-US dynamic?

K.P. Nayar, Strategic Analyst, weighed in with his points here.

• Well, in the first place, the President of the United States has changed.  Barack Obama for example, always wanted to have a settlement with Iran. This was one of his unstated objectives when he came into office. Further, Obama didn’t do much in his first term as he knew that if he did a nuclear deal with Iran in his first term, it would antagonize the Jewish lobby in the United States.
• Thus, he did it in his second term when he didn’t have to seek re-election. However, Trump is a completely different kettle of fish. He has a visceral hatred for Iran. The last time when sanctions were imposed on Iran, India had acted in concert with some other nations such as Japan and South Korea and a few other countries which were also consumers of Iranian oil. Further, these countries are allies of the United States. These countries had approached the Americans saying that they could not do away with Iranian oil just like that. Thus, India plus a few other countries acted in concert to seek relief from the imposition of American sanctions on Iran.  

If sanctions are indeed imposed, then what are our options?

Prof. Harsh V. Pant weighed in with his arguments here.

• Japan and South Korea has dramatically reduced their oil intake from Iran. Thus, they seem to be indicating that they are willing to abide by what America is suggesting.
• What India has been trying to do so far, by and large appears to be good enough. India has made a very good case to the Americans- that India’s engagement with Russia and Iran continues.
• Further, there are also signs that India has reduced oil intakes from Iran- this may not be to the satisfaction of the Americans, however, there is a trajectory here that needs to be kept in mind. For India as well, for the quality of oil that we have, the quality of our refineries, to expect India to go to ‘Zero’ by November 4th is perhaps not an option. However, we have seen the Trump administration officials being very sympathetic to India’s case.

President Trump was not the only one who spoke about sanctions. The Russian envoy also spoke about it and he has slammed CAATSA. What do you make of his statement?  

Prabhu Dayal, Former Ambassador, weighed in with his points here.

Well, naturally, the Russians are very happy that India has gone ahead and signed a deal with them for the supply of the anti-missile air defence system. The Chinese have also been slapped with sanctions. However, to my mind there are two separate issues.

1. The first is the purchase of the S-400 anti-missile air defence system from the Russians
2. The second is the issue of purchase of oil from the Iranians.

• The matter pertaining to the S-400 anti-missile air defence system has been analysed in great detail by our security analysts. It has been reviewed by the highest levels of government , and it has been concluded that we do need this air defense system because of our security needs.
• The second is the matter of oil. Now, in due course like some of the other importers of Iranian oil, we would be able to reduce the oil imports from Iran, if we choose to. However, the air defense system is a totally different kettle of fish. We need it for our security needs. Thus, we should tell the Americans that the air defense system is of primordial importance to us. That it is vital for our security needs. Finally, it is important to note that no sanction is of a permanent effect- there is nothing permanent in these matters. There is always a negotiation route available.

The Russian Envoy has also said that Russia is keen on agreements with India on the lines of LEMOA and COMCASA. Is that something that India should get into?   

K.P. Nayar, Strategic Analyst, weighed in with his points here.

Well with or without the agreement, our defense ties with Russia are much, much stronger than with any other country. Thus, with Russia, the formality of the agreements really don’t matter. Our defense ties with Russia are so strong, intense and deep. Thus, we don’t need agreements such as these. They will remain strong as well for the foreseeable period of time.  

What is the way forward in negotiating the sanctions?

Prof. Harsh V. Pant weighed in with his arguments here.

In case the worst happens and the sanctions are imposed then, we have to figure out a way of overcoming the problems. Further, the relationship with America remains very important for us for various reasons and while we have a very strong relationship with Russia, it is increasingly unidimensional- however, with America, we have a multidimensional relationship. We cannot afford to disrupt the upward trajectory we have in the relationship with America. This upward trajectory is important even for the Americans, and not just for us. Further, the imposition of sanctions, has a very “Cold-Warrish” ring to it here in India.

Concluding Remarks:

• We need good lobbyists for us in the United States. Our defense needs are colossal, we need many things. Many of our defense acquisitions would need to be made from the United States as well.
• Thus, the US wouldn’t gain anything by sanctioning us. The way forward for us is to explain to the Americans that while we need to buy certain things from the Russians, there are certain things that we need to buy from the US as well, and that there is no point in them shutting the door on each other.
• Further, these sanctions, if at all they come to force, are illegal as they are American sanctions, and not UN sanctions. Thus, we are under no obligation to follow them. In fact, we should defy them as they are unilateral sanctions, imposed because of a third country on us.   
• Yes, it is true that we need American companies and the American banking system, but deep down we should not forget that the sanctions are illegal.

Read more Gist of Rajya Sabha TV to help you ace current affairs in the IAS exam.

Also see: