A CAATSA Waiver For India: what Is The Real Issue

China’s military modernization and expansion over the last two decades have put it on the verge of becoming one of the world’s most dominant forces. The People’s Liberation Army Navy (PLAN), now the world’s largest, has been a focal point for President Xi Jinping and the Chinese Communist Party – and his efforts have been fruitful. The CCP has already used coercive measures in much of the South China Sea, and it is only a matter of time before it uses its PLAN to do the same in the Indian Ocean, the next stage on which it hopes to upset the international order.

The PLAN had 355 ships as of 2020, including 145 major combatants, six nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines, and 46 diesel-powered attack submarines. According to the latest report to Congress on China, the PLAN will cement its global power projection capabilities in the near term by being able to conduct long-range land strikes with cruise missiles fired from submarines and surface ships.

Beijing is spending its way to being able to sustain forces in the Indian Ocean indefinitely. China has built ports in Cambodia, Myanmar, Bangladesh, Sri Lanka, the Maldives, Pakistan, Djibouti, Kenya, Tanzania, the UAE, and Australia. The PLAN has increased its deployment of warships to the Indian Ocean, and its submarines now visit twice a year.

The Indian Ocean transports more than 75% of the world’s trade, borders resource-rich areas in East Asia, the Middle East, and Africa, and contains more than 14% of the world’s wild-caught fish. Controlling this area would be a significant step toward China’s goal of dethroning the United States as the leader of the international order.

Fortunately, it’s not all bad news. The revitalised India-US military-to-military relationship could be used to counter additional Chinese gains. The United States and India signed the Logistics Exchange Memorandum of Agreement, or LEMOA, in 2016. The respective forces of the nations can support themselves from their respective military facilities under the LEMOA. The United States and India put the LEMOA into action in 2020, when U.S. P-8 Poseidon submarine-hunting aircraft refuelled for the first time at India’s base in the Andaman Islands, extending submarine-hunting aircraft’s reach into the Indian Ocean.

The Communications Compatibility and Security Agreement, signed in 2018, provides India with a path to high-end sensitive equipment that can be used most effectively on the P-8i and MH-60R aircraft purchased from the US – just in time to track Chinese warships. F-18 Super Hornets from Boeing have been tested for use as the Indian Navy’s next carrier-based fighter.

Unfortunately, the looming threat imposed by the Countering America’s Adversaries Through Sanctions Act puts this potential pillar of security and thus economic stability in jeopardy (CAATSA). Countries that conduct significant transactions with specific Russian entities may face financial penalties under the act, which was enacted to punish Russian meddling in the 2016 U.S. presidential election. Because Russia’s defence contractors are on the list of sanctioned companies, India will face sanctions as a result of several recent military hardware purchases unless a waiver is granted.

Failure to grant India a waiver will revert the relationship to the last time the US sanctioned India, following the 1998 Pokhran nuclear tests. At the time, India saw the sanctions as a reminder of why it should not trust the US, as well as confirmation of the non-aligned principle that had guided Indian foreign policy for decades. As a result, India suspended bilateral naval exercises with the US, deepened its partnership with Russia, and halted momentum in cooperation that had only recently resumed.

Just as it decided to conduct nuclear tests in 1998, India will continue to make national security and foreign policy decisions based solely on its own interests. The sanctions were imposed during the post-Cold War, post-Desert Storm era, when there was no single threat to US hegemony. All nations were satisfied with the economic benefits of global security. Regrettably, that is no longer the case. Sanctions imposed by the United States on India would now jeopardise the global order. The time has come to grant India a CAATSA waiver.

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