The deal for procurement of S-400 Triumf Air Defence Missile System signed during President’s Putin’s visit to India earlier this month comes as no surprise.
The deal for procurement of S-400 Triumf Air Defence Missile System signed during President’s Putin’s visit to India earlier this month comes as no surprise. It had been in the coagulated pipeline of India-Russia defence trade for a long time along with a host of other procurement proposals.
What apparently lent urgency to the S-400 deal, apart from the need to showcase the continued solidarity between the two countries during President Putin’s visit, is the fact that China has already signed the deal for acquiring the same system from Russia. This air defence system, considered best in the world at present, can put India at a great military disadvantage vis-à-vis China if it were not be acquired by us.
Several other acquisition proposals that are under consideration potentially involve Russia either as the sole supplier or as a serious competitor along with other manufacturers. These include four Project 1135.6 class stealth frigates, two of which are to be built in India, conventional submarines under the P-75I project of the Indian Navy, production of 140 Kamov 226T helicopters in India (in addition to 40 to be bought in a fly-away condition), manufacture of an unspecified number of Kalashnikovs in India.
There were expectations that the deal in respect of some of these projects, especially the one regarding acquisition of the Gregorovich-class frigates will also be signed during President Putin’s visit. However, the fact that this has not happened does not in any way diminish the significance of the S-400 deal. For one thing, at $ 5.43 billion it is probably the biggest deal that India has signed with Russia so far, roughly equalling one-third of the total defence trade between India and US in the past one decade or so.
For another, non-conclusion of any other deal during President Putin’s visit could also be because of the two countries not being able to resolve the commercial and technical issues related to the projects or India’s budgetary constraints which limit its capacity to buy all the equipment, weapon systems, myriad platforms, and other military capabilities at the same time. This implies that signing of only one deal at the present juncture does not preclude or reduce the possibility of other deals being singing in the future.
That said, it would be wrong to rule out the possibility of only one deal being signed as a test-case to gauge the US reaction to India’s assertion of it strategic autonomy in choosing the sources of supply to meet its military needs based on broader considerations than the growing proximity with the US. Of all the procurement proposals that have been under consideration, the deal for S-400 is the one most likely to fall foul of the Countering America’s Adversaries Through Sanctions Act, 2017 (CAATSA) which mandates imposing of sanctions on entities which engage in significant military transactions with the specified Russian agencies. The list of sanctioned entities includes Almaz-Antey, the manufacturer of the S-400 system.
There has been much speculation about the US response to the deal, both in the run-up to the signing of the S-400 contract and in the days since the deal was signed. While a section of the opinion and law makers in the US favours India being exempted from imposition of sanctions, recognising the fact that such an action would be counter-productive rather than being in the US interest, their opinion does not seem to have made much of a difference. Just last week on 10th October, when asked about the deal, President Trump, who has the authority under the law to accord a waiver from sanctions, told the reporters at the Oval, “India will find out. Aren’t they?”
He would not have said that had his administration been considering a waiver for India. To be fair to him, he perhaps does face a difficult choice. Having sanctioned the Chinese Military Commission’s Equipment Development Department for violating US sanctions against Moscow by buying the same system as well as 10 Russian Sukhoi Su-35 fighter jets from Russia, the President will find it hard to make a special dispensation for India.
More to the point, the waiver is dependent on the President certifying that the intended beneficiary of the waiver is either reducing its dependence on Russia or co-operating with the US in achieving the objectives of CAATSA. Whether the President Trump intends to, or can, cite either of these two conditions to accord a waiver, especially in the backdrop of India going ahead with import of oil from Iran which too is subject to sanctions, remains to be seen but it is not going to be an easy call. The odds are heavily weighed against any waiver.
This leaves India with the big challenge to keep the India-US relations on an even keel. There is much to be gained by both sides from mutual multi-faceted engagement, even if it is by way of trade wars. Equally important is the challenge of establishing an alternative mechanism for carrying out financial transactions both with Russia and Iran so that the contractual payments can be made bypassing the US banking system which, at present, is an inescapable part of the international money transfer mechanism. India has had such arrangements with both the countries in the past and there is no reason why this cannot be done again.
The present situation also requires rethinking on military cooperation between India and Russia, which had been in a state of inertia for quite some time. As the deal for S-400 system indicates, Russia cannot – and should not – be written off, not only because its continued support is critical for sustaining the in-service inventory of the Indian armed forces, but also because of the potential its military industrial complex still possesses in partnering with India in research, design and development of futuristic state-of-the-art military equipment. Seen in this perspective, it will not be surprising if the effectively-dead Fifth Generation Fighter Aircraft (FGFA) project gets revived in the months to come.
The author is former Financial Advisor (Acquisition), Ministry of Defence and a former Distinguished Fellow, Institute for Defence Studies and Analyses (IDSA), New Delhi.