In the post-cold war era, the United States and Russia kept a decent distance vis-à-vis each other while ploughing their respective relations with India – each pursuing own interests without trespassing into the other’s domain.
But the big-power rivalries have been hotting up. Washington is in an unseemly hurry to to herd India into the fold of a US-led alliance system in Asia. The favourable constellation of Indian foreign-policy elite may not last forever.
However, India still has a “special and privileged partnership” with Russia. Thus, it is no mere coincidence that the US state department delayed by 4 weeks, till last Friday, the release of the list of Russian defence companies to be sanctioned under the Countering America’s Adversaries Through Sanctions Act, which was adopted by the Congress on July 28 and signed by President Trump on August 2 – that is, until state secretary Rex Tillerson delivered his major policy speech on India recently at the CSIS, his only foreign-policy speech to date in 9 months, and returned from his inaugural visit to Delhi.
The US arms sales to India was Tillerson’s main ‘talking point’ in Delhi. He listed out attractive products. But India’s market is demanding, as Delhi also increasingly insists on technology transfer and co-production.
Of course, Russia is an established presence in the Indian market and the American vendor cannot easily compete with the Russian supplier in a level playing field, because Russia supplies India products with advanced technology, given its long-standing strengths in air defence systems (with 41 percent of global sales in 2011-2016), missiles (25.6 percent), and aircraft (24.7 percent).
Importantly, Russia is willing to sell the most technologically advanced weapons to India that are equivalent in capabilities to Western analogues or even surpass them – such as the extremely capable S-400 air-defence missile system. It’s going to be a long haul for the US to dominate the lucrative Indian market.
Yet, the imposition of sanctions against the Russian defence companies helps – although it is paraded as a pointed response to “Russia’s malign behaviour with respect to the crisis in eastern Ukraine, cyber intrusions and attacks, and human rights abuses,” as a US state department official described at a media briefing Friday. The point is:
Washington knows that during 2000-2016, Russia supplied 72 percent of India’s arms imports.
During that period, India accounted for 30 percent of all Russian arms exports, the largest share of any country.
As recently as October 2016, India and Russia announced a $6 billion deal on Russia supplying S-400 surface-to-air missile system and four Project 11356 (Admiral Grigorovich-class) frigates and to establish a joint venture for co-production of Ka-226T helicopter in India.
Defence-industrial enterprises from Russia and India are working together to develop and produce a wide range of weapon systems, including the Brahmos cruise missile and the PAK-FA fifth-generation fighter aircraft.
Russian enterprises lease nuclear-powered attack submarines to India since 2012, the only country on the planet willing to lease the highly capable Schuchka-B class attack submarine with such extraordinarily low acoustic signature and equipped with cruise missiles.
Washington knows all that. Suffice to say, the sanctions move against Russian defence enterprises is a double whammy – it may hurt the Russian defence industry and weaken Russian competition in the world market (where American share is steadily dropping), while also helping to roll back the Russian share of the Indian market.
Just glance through the the list of Russian defence companies that are being sanctioned. It is a virtual directory of India’s Russian partners in the defence field.
The US state department’s “implementation guidance” (here) makes a fascinating study in diplomatic skulduggery. The following elements must be noted:
This is an “initial implementation stage” of the sanctions with focus on “significant transactions”. More sanctions may follow.
A “significant transaction” between the Russian defence company and a foreign entity will be determined by the State Department on a case-by-case basis on the basis of “the totality of facts and circumstances surrounding the transaction” and after weighing “various factors”.
In particular, state department will assess the significance of the transaction to US national security interests and foreign policy interests, the “nature and magnitude” of the transaction and the “relation and significance” of the transaction to Russia’s defence and intelligence sectors.
The US state department “is mindful of the importance of unity and coordination with our allies and partners on these issues… Where possible, the United States intends to work with persons considering transactions with persons named in this Guidance to help them identify and avoid engaging in potentially sanctionable activity.”
Sanctions include “prohibitions concerning property transactions, export license restrictions, Export-Import Bank assistance restrictions, debt and equity restrictions, visa ramifications for corporate officers, and United States government procurement prohibitions.”
Sanctions cover entities and/or “principal executive officer or officers” of the entity.
Clearly, Washington intends to use coercive diplomacy to enforce the sanctions. The base line will be the US’ foreign-policy objectives in any given situation. The Modi government will most certainly come under US pressure. India is a prime target since the US hopes to transform this ‘natural partner’ into an ally.
Apart from India, the US’ target countries are likely to be Vietnam, Malaysia, Indonesia Philippines, Saudi Arabia and other GCC states, Egypt, Iraq, Turkey, Greece, etc. and the new markets for Russian exports opening up in Africa.
China is the second largest buyer of Russian weapons (after India), but the US lacks the capacity to leverage Chinese policies. The same holds good for Iran, which fiercely safeguards its strategic autonomy and is on hostile terms with the US. Pakistan no longer cares.
Of course, Russia will fight back. But in the longer run, the US will have to contend with another player – China. Read a riveting piece, here, titled Will China Start Selling the ‘AK-47’ of Drones?