India-Russia Relations – US's Role
What is the issue?
- The India-Russia Annual Summit was held recently in India, with uncertainty over US sanctions for defence deals.
- Why is the recent meet significant?
- Nevertheless, it was clear assertion of autonomy of Indian decision-making on Russia.
- On Afghanistan, India expressed support for the “Moscow format”.
- Under this, Russia involves regional countries and major powers in an effort to draw the Taliban into negotiations with the Afghan leadership.
- The U.S. has boycotted this initiative, but has initiated its own dialogue with the Taliban.
- A U.S. Special Representative for Afghanistan is now touring Afghanistan, Pakistan, the UAE, Qatar, and Saudi Arabia.
- This is to generate help in bringing the Taliban to the negotiating table and notably, India is not on his itinerary.
- On Pakistan, significantly, the recent Joint Statement mentions cross-border terrorism, which some earlier Joint Statements did not.
- There are clear opportunities for cooperation between Russia (natural resources-rich) and India (resource-hungry).
- But even before CAATSA, there was confusion in India about sanctions against Russia.
- The U.S. and European sanctions on Russia between 2014 and 2016 are sector- and currency-specific.
- They affect entities operating in Europe and U.S., and transactions in euro or dollar currencies, and are not applicable to other geographies or currencies.
- This remains the case, even post-CAATSA, for all sectors other than defence and energy.
- The economic engagement of major European countries with Russia has actually grown in 2017 and 2018, despite the sanctions.
- European and American corporate lawyers with expertise on sanctions have enabled this.
- So with proper structuring of business deals, trade and investment exchanges with Russia are possible, without losing business with Europe and America.
- Indian business needs to tap into this expertise, as utilising the business opportunities largely depends on this.
What is the way forward?
- Every potential India-Russia defence deal could be subjected to a determination on applicability of US sanctions.
- Given the political dynamics in the U.S. today, a systemic solution to this problem is not evident.
- However, it has to be on the India-U.S. dialogue agenda as the strategic partnership between both is based on a strong mutuality of interests.
- Nevertheless, the partnership is not intended to have the exclusivity of an alliance.
- So India should not have to choose between one strategic partnership and another.
- The India-Russia dialogue should not get inextricably entangled in the India-U.S. dialogue.