Supporters of Vladimir Putin, Russia’s president, hold up a poster during celebrations at a rally near the Kremlin in Moscow. (Photographer: Andrey Rudakov/Bloomberg)

U.S. Sanctions Targeting Russia Could Threaten India Ties

(Bloomberg View) -- For months now, U.S. congressional leaders have been pressing President Donald Trump to impose biting sanctions on Russia for its meddling in Ukraine, Syria, the 2016 U.S. elections and, most recently, the U.K. In frustration, legislators have sought to act unilaterally where they can. Their efforts now threaten critical U.S. allies and partners -- India chief among them.

Like its predecessor, the Trump administration has wisely sought to make India a central pillar in its overall Asia strategy. The rising power, in a rare feat, enjoys bipartisan support in Washington; an overwhelming majority of U.S. foreign policy players would like to see an acceleration of U.S.-India ties, given the two countries’ convergence of interests and values. Neither country wants any one nation to dominate Asia’s future and democratic India constitutes a bulwark against the region’s rising tide of authoritarianism.

That comfortable consensus, however, could now run afoul of politicking in Washington. Visiting Moscow last week, India’s defense minister agreed to expedite the purchase of the sophisticated, long-range S-400 air defense system from Russia. The deal had originally been signed in October 2016 but has been held up mainly by quibbles over price.

The Indian arms purchase could violate a law Trump reluctantly signed in August 2017 that targets Russia for its interference in the 2016 U.S. presidential elections and other destabilizing behavior. The Countering America’s Adversaries Through Sanctions Act requires punishing any country engaging in “significant transactions” with Russia’s defense and intelligence sectors. 

The India-Russia deal is a byproduct of a defense relationship that dates back to the beginning of the Cold War. Despite leading a movement of countries “non-aligned” with either Washington or Moscow, India tilted toward the Soviets, while its archrival Pakistan sought an alliance with the U.S. About 60 percent of India’s defense equipment still comes from Russia. 

As the estrangement of that era has steadily melted away and India’s economy has surged, the U.S. has risen to become India’s second-largest defense supplier. In fact, U.S.-India defense ties enjoy the strongest momentum in the overall relationship today. India is a critical partner in helping manage China’s rise, fighting terrorism in South Asia and providing maritime security in the Indian Ocean.

Yet, there’s some catching up to do. India lives in a dangerous neighborhood with nuclear-armed China and Pakistan, rivals with whom it has fought wars and has active border disputes. State-of-the-art military equipment is a must-have for the world’s largest arms importer, especially when its most formidable strategic competitor, China, was Russia’s first overseas customer for the S-400 system.

India wants to be the second, largely to strengthen its borders against attack. The essentially defensive S-400 is meant to provide India reassurance even as its armed forces face acute combat aircraft shortages and procurement delays.

Any public threat -- let alone imposition -- of sanctions will severely damage the growing U.S.-India strategic partnership. The merest suggestion of Western interference in sovereign decisions has long been considered an affront in India -- a neuralgia that can be traced not only to the country’s searing colonial experience, but to past U.S. penalties imposed for nuclear tests conducted in 1974 and 1998. 

Those restrictions, and extant export controls on defense equipment, raise questions in India about America’s reliability as a security provider. The array of active threats India faces can make any withholding of aid and equipment seem like a life-and-death decision.

While understandably frustrated by Trump’s lack of enthusiasm for implementing Russia sanctions, Congress was ill-advised to pass an extraterritorial measure putting countries such as India in the cross-hairs without explicitly providing for carve-outs. It would undermine significant American interests if secondary U.S. sanctions, of all things, pushed India deeper into Russia’s arms. 

Before it’s too late, the U.S. and India should quietly work together to find other arrangements to address the latter’s defense requirements. If that’s not feasible -- India has reportedly turned down the older Patriot missile defense system, for example -- Congress should provide India a sanctions waiver. Allowing for exceptions based on an overall assessment of national security is hardly unusual under U.S. sanctions and trade law.

Better yet, U.S. legislators should consider offering a blanket waiver to all allies or partners that could foreseeably be caught up in the Russia sanctions -- from India to Indonesia, Saudi Arabia, the United Arab Emirates and Vietnam. Too much is at stake to allow one-off defense transactions and well-intended U.S. legislation to damage budding relationships with promising security partners.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Thomas R. Pickering is vice chairman of international consultancy Hills & Co. He is a former U.S. undersecretary of state for political affairs and previously served as U.S. ambassador to Russia, India and Israel.

Atman Trivedi is managing director at international consultancy Hills & Co. He previously served as senior director for policy in global markets at the U.S. Commerce Department and chief of staff in the State Department's international security and nonproliferation bureau.

To contact the authors of this story: Thomas R. Pickering at tpickering@hillsandco.com, Atman M Trivedi at atrivedi@hillsandco.com.

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