NEW DELHI: Here’s a view on CAATSA (Countering America’s Adversaries Through Sanctions Act) and whether it would apply to India. When Turkey received the first S400 system in July 2019, the very next week Washington stopped the sale of F-35 fighter aircraft to the Turkish air force.
CAATSA sanctions followed the very next year in December, when then President Trump banned the export of military and strategic equipment and technologies to Turkey and placed visa restrictions on top officials of its defence industry.
Now look at how the U.S. responded when India received the first S400 battery in November last year. Two months since there is no sign that U.S. sanctions of any kind are imminent. In fact, Indian diplomats say that in all negotiations in Delhi or Washington, no indication has ever been given that sanctions will be implemented.
No less than James O’Brien, who is expected to coordinate sanctions policy once confirmed by Congress, gave a broad hint earlier this week when he said: “The administration has made it clear that it is discouraging India from the acquisition of Russian equipment, and there are important geostrategic considerations particularly with …. China. So I think we have to look at what the balance is.”
The irony is the growing push for ‘Make in India’ could eventually squeeze out or severely curtail the procurement of U.S. military equipment. Reports say the Indian Navy’s plans to buy six more P8i maritime patrol aircraft from Boeing (to add to the 12 in service) are “under review”. India has also been silent on long pending plans to buy Reaper drones from General Atomics. Even the Russians could be hit if the navy drops its plans to buy more Klub anti-ship cruise missiles and the army gives up on the VSHORAD missile system.
There’s been no official U.S. expression of concern about the direction of the ‘Atmanirbhar’ policy as yet but the disquiet among some contractors could see them knocking at political doors in Washington. If there is pressure from there, India has an answer ready: that given the direction set by the Indian government, foreign firms could set up shop in India and make equipment for the Indian military and for export (the U.S. government could even give those firms tax breaks, as an incentive).
The problem for the U.S. government is it cannot force its military contractors to invest in India. That is a purely commercial decision and the government cannot have a role in it. Also, U.S. defence contractors sell worldwide and may not see a need to make allowances for the Indian market.
This is also probably the reason why the much touted India-U.S. Defence Technology & Trade Initiative has not taken off. Eleven rounds of discussions have been held, twice every year, alternately in each capital. At the last round in November 2021, there was agreement on developing an air launched UAV but it’s not clear if that project has witnessed any forward movement.
The principle of “L1” or lowest tender also works against U.S. military equipment, which generally costs more than similar equipment from, say, Russia. Legally, there’s no way India’s defence ministry can avoid giving the contract to the lowest bidder when the rules say so. The alternative is a government to government deal but Indian negotiators will insist on ‘Make in India’. Result: deadlock.
Other competitors appear to be responding faster to ‘Make in India’: there are reports that French aero engine maker Safran could invest money and technologies in designing and building a jet engine for India’s ambitious fifth gen AMCA project. There are also reports of the Rafale fighter being built in India for the air force and navy.
Russia has consented to having its vaunted Kalashnikov rifle being made in India but plans to build the Kamov helicopter have run aground with Hindustan Aeronautics (HAL) offering a comparable helicopter. Given that the Advanced Light Helicopter and its variants have been HAL’s signal successes, there appears to have been enough backing for this India project.
Of course the new indigenization rules do make allowance for imports in case the system, platform or technology is not available within the country, but the direction, goal and intent is clear.
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