India-Russia summit in the shadow of CAATSA
President Putin came to India for the 19th annual India-Russia summit – his 15th – in what has become the usual backdrop to such summits: perceptions of drift in the relationship, of flagging defence cooperation and stagnant economic partnership, and of divergences in perspectives on key issues in India’s neighbourhood — Pakistan, Afghanistan and China — and on India’s strategic linkages with the US. However, the biggest question surrounding this visit was whether or not the deal for the S-400 air defence system would be signed, braving the threat of US sanctions under CAATSA (Countering America’s Adversaries Through Sanctions Act), which applies to “significant” defence transactions with Russia. Over the past many months, US officials had been regularly warning, in bilateral discussions and in public media briefings, that the S-400 was too big a deal to ignore.
In the event, the S-400 deal was concluded at the summit, though in a low-key manner. The agreement was signed behind closed doors, avoiding the glare of media cameras. It was not mentioned in the leaders’ press statements. A single sentence paragraph in the joint statement affirmed the signing of the agreement. Other defence cooperation agreements expected to be signed —joint manufacture of Kamov helicopter, frigates, assault rifles and others — were apparently deferred to the bilateral meeting at Defence Ministers’ level to be held later in the year.
The cordiality between the two leaders, which was evident at their Sochi meeting in May, was demonstrated this time too, including at their tete-a-tete over a private dinner hosted by PM Modi. Both leaders emphatically declared the relevance of the strategic partnership and their commitment to broaden the canvas of cooperation. There was no evidence of the “wrinkles” in the relationship: Pakistan, Afghanistan, China, USA, Indo-Pacific. All of them had figured at their informal meeting in Sochi, when both leaders had apparently cleared the air and agreed to be sensitive to the core interests of each other. PM Modi summed up the discussions on these issues in a few sentences, indicating that all international issues of mutual interest had been discussed and that they have common interests in Afghanistan, terrorism and the Indo-Pacific.
The joint statement contains the usual affirmation of shared perspectives on major international developments. On Pakistan, one might note the nuance that the Joint Statement mentions cross-border terrorism, which some earlier Joint Statements did not. On Afghanistan, it confirms Indian support for Russia’s political initiative—the “Moscow format”, which seeks to involve regional countries and major powers in an effort to draw the Taliban into negotiations with the Afghan leadership. In its latest incarnation, the format includes the Afghan government as co-sponsor. The US has boycotted this initiative, but pursues its own dialogue with the Taliban. The US Special Representative for Afghanistan Reconciliation, Zalmay Khalilzad, has been touring Afghanistan, Pakistan, UAE, Qatar and Saudi Arabia, seeking (according to the State Department) “to coordinate efforts to bring the Taliban to the negotiating table”. The US has not involved India in this initiative.
The joint statement lists out a wide range of economic priority projects—in mining, metallurgy, pharmaceuticals, chemicals, railways, infrastructure, aviation and space, among others. Russia will extend capacity building support for India’s manned space missions. Trade has shown an encouraging uptick, rising to about $10 billion in 2017, with a further increase of 20 per cent this year. Investments have also risen, mainly due to hydrocarbons investments. It has been agreed to open a single window clearance mechanism to further promote Russian investments in India.
The joint statement noted continued commitment to the ongoing talks between India and the Eurasian Economic Union (Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia) for a Free Trade Agreement. It also reiterated that the two countries will work with Iran to activate the International North South Transport Corridor—the multimodal trade corridor from India’s west coast to Iran and onwards in spurs to Afghanistan, Central Asia and to Russia and northern Europe. This corridor would cut the time and cost for transport of goods between India and Russia (and Europe) by roughly half of that by the circuitous sea route to Europe through the Suez Canal. With fresh U.S. sanctions on Iran, progressing this project will require imaginative strategies.
Though the S-400 deal has presumably escaped the CAATSA net, there will remain a continuing threat to India-Russia defence cooperation. 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. India has to avoid a situation of having to seek a case by case waiver of CAATSA application for every Russian defence deal; this would be both demeaning and counter-productive. There is a sufficiently strong mutuality of interests in the India-US relationship (in spite of its asymmetry) to ensure that it survives and thrives without India having to cede its autonomy of action vis a vis Russia. It will remain a challenge for Indian diplomacy to establish this with the US.
October 30, 2018