Russian sanctions to affect India

The sanctions that Washington has imposed on Russia’s military exports have wide-scale implications across the world. In particular, this could negatively affect billions of dollars worth of deals that India has struck with Russia – its largest military partner.

Background

US sanctions on Russia

Relations between Russia and the US significantly deteriorated in 2014 when Russia annexed Crimea. It cited a controversial referendum for doing so. As a result, Barack Obama and his EU allies unveiled a coordinated set of sanctions against Russia and ordered it to leave Crimea. Russia responded with counter-sanctions. Russia’s alleged interference in the US Presidential elections has further deepened tensions in the ties. Despite Russia’s repeated denials, the US imposed harsh sanctions on Russia in 2017.

India-Russia ties

Russia is considered an important ally for India. The two countries have shared strategic, military, economic and diplomatic relations for years. The Indo-Russian intergovernmental commission is one of the largest comprehensive governmental mechanisms that India has had with any country internationally. However, the 1960s were testing times for the two, when Russia started getting closer to Pakistan. After the 1965 India-Pakistan war, Russia reduced its support to India on the Kashmir issue. However, ties normalized and became strong in its aftermath. In 2014, India abstained from voting in favor of Russia on the Ukraine issue to maintain its neutrality with Russia and the US.

A recent report on global arms trade that analyzed the past five years noted that Russia still remains India’s top supplier of weapons. The United States comes in second, however the gap between the US and Russia remains considerable. In fact, Russia reportedly has supplied a whopping 62% of India’s arms in the past five years. The SIPRI report stated, “Based on existing orders and weapons, Russia will remain, by far, the main supplier of major arms to India for the foreseeable future.”

In 2016, India and Russia signed billions of dollars of defense and energy deals.

Analysis

In August 2017, US President Donald Trump signed into law a number of sanctions against Russia. Under this law any country trading with Russia’s defense and intelligence sectors will face also sanctions. Despite these sanctions, in April 2018, India’s defense minister visited Moscow to finalize a weapons deal worth $6 billion.

Now, experts note that this deal along with other deals that Russia may have struck with nations in Asia would be affected as a result of these sanctions. This includes allies of the United States. "The optics of a major arms purchase from Russia looks quite 'iffy' from the point of view of Western capitals, especially at a time when Russia-West relations are at an all-time low and India seeks strategic convergence with the West, including with the U.S." said Abhijnan Rej, a defence strategy expert at Observer Research Foundation, a New Delhi think tank.

As part the deal struck between India and Russia, Indian military wants to buy five S-400 long-range surface-to-air missile systems. The country’s military believes that this would be a “game-changer” for its military arsenal.

There are also concerns in Washington that these sanctions could sour ties between US and India. The US wants to cultivate a more strategic relationship with India and this could hinder that. “In the past few years you’ve seen a massive transition where more equipment is being bought from the U.S. That’s because the U.S. wants a closer relationship with India, and defense deals are essentially diplomatic deals,” said Shailesh Kumar, the Asia director of the Eurasia Group, a geopolitical risk consulting firm. “My suspicion is that America will not deem the S-400 purchase as sanctions-worthy,” he added. “There’s too much at stake for bilateral relations. If the U.S. goes for sanctions, it will undermine the goodwill the U.S. has been trying to build up with India over the last two decades.”

Some of the other nations that would be affected as part of these sanctions are Vietnam, which wants to modernize its inventory and Indonesia. India, in particular, is worried about the implications of these sanctions. Indian Foreign Secretary Vijay Gokhale and Defence Secretary Sanjay Mitra have held high level meetings in Washington to address these concerns. “The intent of the legislation was never to disrupt U.S.-India defense relations, which Congress has repeatedly recognized in law as a strategic priority to the U.S.,” said Benjamin Schwartz, aerospace and defense head at United States India Business Council.

Assessment

Our assessment is that these sanctions present a major concern for India’s military. It has been earlier reported that India needs more fighters for its depleting air force, as it still has only 3/4th of the aircraft it needs. India, which is surrounded by unfriendly neighbors, is actively trying to modernize its military and arsenal and Russia is a major player in this agenda. The sanctions imposed by the US will affect agreements not only with India but also other US allies like Vietnam. However, it is possible that in a bid to ensure that it does not sour ties with Delhi, Washington could make a few exceptions in the deals struck between Russia and India.

Read more: US sanctions list targets all Russians