Do a Rafale with Trump to evade CAATSA

Maj-Gen Ashok K Mehta (retd)

India’s first Trump test is in the catch-22 situation it is facing over CAATSA (Countering America's Adversaries Through Sanctions Act) in somewhat defiantly signing the contract for the purchase of S400 air defence system and also saying it would continue to buy oil beyond the red line of November 5 from Iran. Worse, External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman showed little restraint in stating 'we do not care for American law' and 'we follow only the UN, not any country's sanctions' and clearly misread the US' noncommittal stance on a presidential waiver over CAATSA. 

The latest US reaction was ominous — from President Trump — that 'India would find out sooner than you think' about his decision whether to impose sanctions on a $5.4 bn S400 deal with Russia and 'would take care of' India's reported plans to continue purchasing Iranian crude after November 5. Other reactions from the White House include terming the deal 'not helpful' and reviewing 'it very carefully'. Misplaced confidence and euphoria in India over likely waivers was matched by caution from the US. Key US interlocutors — US Secretary of State Mike Pompeo and pointsperson on South Asia and Central Asia Alice Wells — even after the twice postponed 2+2 talks (the waiver issue was skirted) on waivers merely said, 'We will work with Indians. Iran oil has to come to zero oil. But we will do what makes sense for both countries.' The State Department has despatched its Special Representatives on Iran Brian Hook and Francis Fannon for consultation with their Indian counterparts. 

From Day 1, it was clear that the US would be more lenient on Iran than on Russia as a waiver on the former was in its national interest relating to Afghanistan and, therefore, a carve-out could be forthcoming. Russia was a different kettle of fish.  NSA Ajit Doval returned from the US after meeting major players in the State Department, DoD and the US Congress without any assurances.

A cool-down in India-US relations commenced with the Wuhan and Sochi summits between Prime Minister Modi and President Xi Jinping and Modi and President Putin, respectively. The covers came off after Modi's maiden speech at the Shangrila Dialogue where the Indo-Pacific Grand Idea was reduced by Modi to a strategy of common good with its centrality on ASEAN. It was not any military alliance (QUAD) to contain any one country (China). This mirrored what happened in 2015 after the Modi-Obama summit of an Asia-Pacific vision which never took off. 

Clearly, India will not be a part of a US-led compact to contain China. India has purchased $16 bn worth of military equipment from the US through the FMS (foreign military sales) route when till 2004 it was a paltry $80 m for artillery-scouting radars. In 2004, when India signed the contract for the Hawk trainer aircraft, a clause was inserted in the deal that there will be no American parts in it since it had experienced spare parts problems with British Sea King helicopters and other equipment while under US sanctions after the 1998 nuclear tests. Drawing closer to the US has inevitably distanced India from its quintessential strategic partner Russia, which, in turn, has moved closer to China and Pakistan, epitomising the dictum that there are no permanent friends, only permanent interests.

India-Soviet/Russia relations go back to after the 1962 India-China war. In 1971, only three weeks after the momentous change in Sino-Soviet relations, anticipating armed conflict with Pakistan, India signed the Indo-Soviet Treaty of Peace, Friendship and Cooperation — whose Soviet draft had been languishing in New Delhi for two years — on August 9, 1971. 

Paradoxically, the USSR endorsed India's non-aligned status in the treaty on Indira Gandhi's insistence. Even after being strategically aligned with the USSR, India displayed a fair measure of strategic autonomy, but its dependence on Soviet military equipment was almost total. Today, Russia remains India's key provider of advanced military and strategic technology and is the only country to have leased two nuclear-powered submarines.  Nearly 70 per cent of India's military inventory is still of Soviet/Russian origin.

Last week, Russian Ambassador to India Nikolav Kudashev described the S400 deal as the largest contract in Indo-Russia ties. He added that more contracts worth $8 billion were in the pipeline. For Trump, this is adding fuel to fire. Not only does it violate CAATSA as a 'significant military purchase', it also invokes the ire of the Congress and Trump together. The Indian-born Ashley Tellis, a renowned strategic thinker at the Carnegie Endowment and once adviser to US Ambassador to India Robert Blackwill during the crucial Operation Parakram, has been sending warning signals to New Delhi on CAATSA and how to circumvent it. He has said the final word on the waiver is with Trump alone and no one else. And no one knows his mind.

He had suggested three options: first, scuttle the S400 and buy a US air defence system (this is out); second, defer payment of $ 5.4bn (15 per cent at the time of signing the contract) till conditions change; third, make a deal with Trump which is a Defence Secretary Mattis idea: buy more US military equipment. Unfortunately, given Modi's focus on the 2019 elections, and funds needed for social welfare schemes, monies for option three will not be there. BJP's Gen BC Khanduri (retd) was axed from the chairmanship of the Parliamentary Standing Committee on Defence for declaring the Army unfit for war due to the lowest defence budgets since 1962 this year. 

Still, the best way out of CAATSA is to do a Rafale with Trump. In the new RFI (request for information) for 114 MMRCA (Medium Multi-Role Combat Aircraft), award the contract to Lockheed Martin for its F16 Block 70 to be made in India for which its strategic local partner is the Tata group. This may also be open sesame for other high-technology transfers (none so far) and a perfect sweetener for the invitation to Donald and Melania to grace the 73rd Republic Day celebrations.