No blanket waiver for India-Russia defence trade: US official

New Delhi,   Amid speculations over the fate of India’s purchase of the S-400 Tiumf air defence missile system from Russia following Washington’s sanctions on Moscow, a senior US official said on Monday that there will be no blanket waiver for defence trade with Russia.

“On the S-400, there is no blanket waiver or country-specific waiver,” Principal Deputy Secretary of State for South and Central Asia Affairs Alice Wells said while briefing the Indian media over phone from the US about the first ever 2+2 India-US Ministerial Dialogue.

“The authority granted by the Congress allows the President to make a determination on individual waivers,” Wells said.

External Affairs Minister Sushma Swaraj, Defence Minister Nirmala Sitharaman, US Secretary of State Mike Pompeo and Defence Secretary Jim Mattis held the 2+2 Dialogue here on September 6.

With US President Donald Trump administration’s law — Countering America’s Adversaries Through Sanctions Act (CAATSA) — coming into effect in January 2018, India’s defence deals with other countries have come under the scanner.

CAATSA targets countries doing business with Russian, Iranian and North Korean defence companies. It is a matter of concern for India as it is a major defence partner of Russia.

The most controversial issue is India’s purchase of four S-400 missile systems from Russia at a cost of more that Rs 40,000 crore.

Wells referred to Pompeo’s remarks to the media here after the 2+2 Dialogue in which he said that no decision has been taken on the S-400 deal.

“We continue to have conversations with the Indian leadership on ways we are working to hold Russia accountable for its behaviour,” she stated.

“As Secretary Pompeo said, the sanctions are not intended to adversely impact countries like India. These are designed to impact Russia,” she said.

“So, we are working through the implications of CAATSA and the significant impact of CAATSA.”

Wells said both Mattis and Pompeo described the importance of holding Russia accountable for the actions it has taken and in the region during the meeting.

“And also the actions Russia has taken to subvert the US’ democracy. That was the nature of the conversation,” she said.

The issue of the US Congress allowing for a Presidential waiver in specific cases also did not come up for discussion, Wells said. “There has been no decision to provide waivers, country-specific waivers in the legislation is on case-by-case basis. There was an understanding of the legacy of India’s defence cooperation relationship with Russia.”

She said that the focus of the conversation was only on the kind of defence acquisitions India needed for its security purposes over the next generation and what impact that has on interoperability.

The most significant outcome of the 2+2 Dialogue was the signing of the Communications Compatibility and Security Agreement (COMCASA) by the two sides.

COMCASA guarantees India access to critical US defence technologies and communication network to help the militaries of the two countries in their interoperability.

With Washington imposing fresh sanctions on Tehran over Iran’s nuclear programme, there have been concerns in New Delhi as India is heavily reliant on Iran for crude oil.

Wells said there has been expert-level discussions between India and the US on issues related to crude oil exports from Iran and ways to bring those exports down.

Stating that these conversations are ongoing, she said: “We are working very hard with our partners so that there are no disruptions in the market and adequate supply is available to substitute for Iranian oil.”

The sanctions on Tehran have also put under jeopardy the Chabahar port project in Iran, being jointly developed by India, Iran and Afghanistan.

The port facilitates access to Afghanistan by bypassing Pakistan and is also a vital link in the International North-South Transport Corridor.

Wells said that the US side heard the Indian government’s rationale for Chabahar as a means of providing access to Afghanistan and its role in connectivity through Central Asia.

She said China too came up for discussion during the meeting in the context of the Indo-Pacific region.

With Beijing’s growing influence in the region, last year a quad comprising India, the US, Japan and Australia seeking to work for peace and prosperity in the Indo-Pacific was revived.

Chinese President Xi Jinping’s pet Belt and Road Initiative (BRI) has put a number of countries under debt trap for projects under it raising concerns in various quarters.

Wells said that during the meeting, the two sides discussed how to pursue significant infrastructure projects with sustainable financing in then Indo-Pacific region.

The US has $1.4 trillion of trade in the Indo-Pacific and $850 billion in foreign direct investment.

“The conversations were on how can we work bilaterally, trilaterally with Japan, quadrilaterally with Australia and Asean (Association of Southeast Asian Nations) at the centre of our efforts,” Wells said.

“How can we work to promote economic security, good governance and the security of the seas and skies.”

With India-US bilateral trade being largely tilted in India’s favour, correcting the trade imbalance also came up for discussion during the 2+2 Dialogue.

“The conversation was on how we grow our trade relationship in a fair and reciprocal manner,” Wells said.

“Non-tariff barriers has been a subject of longstanding concern but we are working with the government of India to address market access,” she said.

Last month, the US included India among the top tier of countries entitled to licence-free exports, re-exports and transfers under license exception Strategic Trade Authorization-1 (STA-1).