- CAATSA stands for “Countering America’s Adversaries Through Sanctions Act”
- This punitive act was signed by President Donald Trump in August 2017.
- It mandates US administration to impose sanctions on any country carrying out significant defence and energy trade with sanctioned entities in North Korea, Iran and Russia.
- This is an act by the Congress, thus the President of the United States of America doesn’t have too much of authority over it.
- Why in news? India is buying S-400 system from Russia that might invite sanctions under CAATSA
United States has designated India as Strategic Trade Authorization-1 (STA-1) country that will allow country to buy highly advanced and cutting-edge sensitive technologies from America.
This coveted status brings India in par with US’s closest allies and partners such as NATO.
STA-1 designation authorizes export, re-export and transfer (in-country) of specified items on Commerce Control List to destinations posing a low risk of unauthorised or impermissible uses.
Currently there are 36 countries on STA-1 list.
India is only South Asian country to be on the list. Other Asian countries designated as STA-1 are Japan and South Korea.
Under STA-1, India and US have reached understanding under which India will receive license-free access to wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives.
STA-1 treatment will expand scope of technology exports subject to Export Administration Regulations (EAR) that can be made to India without individual licenses.
It will further enhance bilateral defence trade relationship and result in a greater volume of US exports to India.
It will allow US companies to more efficiently export much wider range of products to Indian high technology and military customers.
It will benefit US manufacturers while continuing to protect its national security.
It will provide India greater supply chain efficiency, both for defence and for other high-tech products that will increase activity with US systems, interoperability of systems and will reduce time and resources needed to get licensing approved.
It will be also competitive advantage for US, in terms of supplying those kinds of products to India.
This new designation reflects India’s membership in three of four multilateral export control regimes.
India is in talks with United States to procure NASAMS-II
It features new 3D mobile surveillance radars and 12 missile launchers for quicker reaction.
NASAMS-II is highly adaptable mid-range solution for any operational air defence requirement.
It provides tailorable, state-of-the-art defence system that can maximise the ability to quickly identify, engage and destroy current and evolving enemy aircraft, UAV or emerging cruise missile threats.
India is deploying multi-tiered air defence network to fully secure its airspace from incoming fighter aircraft, missiles and unmanned aerial vehicles (UAV).
It is also in advanced stage of talks with Russia for procurement of very long range S-400 air defence systems.
Apart from these imports, Defence Research and Development Organisation (DRDO) is in the final stages of developing its two-tier Ballistic Missile Defence (BMD) system which is designed to track and destroy nuclear missiles both inside (endo) and outside (exo) earth’s atmosphere.
Phase-I of indigenous BMD is expected to be deployed soon.
- COMCASA is one of three foundational agreements that guide US high technology cooperation in defence sector with other countries.
- It was earlier called Communication and Information on Security Memorandum of Agreement (CISMOA) before name was changed to reflect its India-specific nature.
- Other two agreements are Logistics Exchange Memorandum of Agreement (LEMOA) and BECA.
- COMCASA is meant to facilitate use of high-end secured communication equipment to be installed on military platforms being sold to India by US to fully exploit their potential.
- It essentially provides legal framework for transfer of communication security equipment from US to India that will facilitate interoperability between armed forces of both countries and potentially with other militaries that use US-origin systems for secure data links.
- Interoperability in this case means that there will be access to encrypted and secret technologies or communications.
- India is currently dependent on commercially available and less secure communication systems on high-end US defence platforms like C-130Js and P8I maritime surveillance aircraft.
- After initial reluctance of government and reservation of defence ministry, India has signed COMCASA.
- The agreement will give Indian military access to function on high-end secured and encrypted communication equipment which are installed on American platforms obtained by Indian Armed Forces. These platforms include C-130 J, C-17, P-8I aircraft, and Apache and Chinook helicopters.
- The agreement was pending for almost ten years. One of the major reasons for this was the fear that India may compromise its operational independence.
- Critics had also pointed out that the agreement could jeopardise India’s established military ties with Russia and access to their weapons systems.
- These agreements and Donald Trump administration’s decision to give India STA-1 status (Strategic Trade Authorization-1) shows the country’s importance in the US strategic calculus.
Significance of COMCASA:
- It will enable Indian military to get a better picture of the Indian Ocean Region (IOR) which is seeing increasing Chinese movements.
- With COMCASA, Indian armed forces will get to fully exploit the capability of the military platforms procured from the US. For instance, the P-8I reconnaissance aircraft of the Navy which have emerged as a major force multiplier are currently operating at limited capacity.
- As a consequence of COMCASA, India will get access to Combined Enterprise Regional Information Exchange System, or CENTRIXS, which is the secure communication system network of the US.
- Navy ships with CENTRIXS on board can communicate securely with the U.S. Navy when needed and can benefit from the wider situational picture of the region as they have a large number of ships and aircraft deployed. This will reduce the stress on the assets and allow prioritising the deployments more efficiently.
- CENTRIXS consists of a collection of coalition wide area networks (WAN) known as enclaves” and is a “great enabler, allowing ship-to-ship operational dialogue between the two nations in text and web-based formats.
- It is believed that there are persistent concerns that this would allow U.S. Navy access to India’s own secure communication network and also that the information shared with the U.S. will be accessible by Pakistan.
- Officials brushed aside these fears as specific measures have been incorporated in the agreement to “have full access to the relevant equipment and there will be no disruptions”.
- Data acquired through such systems cannot be disclosed or transferred to any person or entity without India’s consent.
- It is an enabling instrument and does not commit India to acquiring U.S. platforms.
- GSP is largest and oldest US trade preference programme introduced in 1976.
- It is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries both developing and developed countries.
- Under it, a wide range of industrial and agricultural products originating from certain developing countries are given preferential access to US markets.
- India’s case, GSP enables duty-free entry of 3,500 product lines in US markets, which benefits exporters of textiles, engineering, gems and jewellery and chemical products.
- The total US imports under GSP in 2017 was $21.2 billion, of which India was biggest beneficiary with $5.6 billion, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).
- The US Congress in March 2018 had voted to renew GSP through 2020.
- Why in news? The United States Trade Representative (USTR) has formally announced that it is reviewing eligibility of India, Indonesia and Kazakhstan in Generalized System of Preferences (GSP) based on concerns about countries’ compliance with program. The reviews are based on Trump administration’s new GSP country eligibility assessment process as well as GSP country eligibility petitions
Impact on Trade with India
- The withdrawal of the Generalised System of Preferences from India would result in the elimination of duty-free access for about 2,000 Indian product lines.
- This will hurt small businesses such as jewellery.
- This will adversely affect Indian exports to the US.
- After the withdrawal of the Generalised System of Preferences number of goods qualifying for preferential treatment could be reduced, or the whole programme could be withdrawn.
- India and US have established new two-by-two (2 by 2) ministerial dialogue to enhance strategic coordination between them and maintaining peace and stability in the Indo-Pacific region.
- The new dialogue format will replace the earlier India-US Strategic and Commercial Dialogue.
- It will be similar to the India-Japan 2+2 dialogue format between foreign and defence secretaries of the two countries.
How relationship evolved?
- India and US had elevated their Strategic Dialogue in 2009 which mainly focuses on regional security, economic cooperation, defence, trade and climate challenges.
- The purpose of two-by-two ministerial dialogue is to put strategic, defence and security relationship between the two countries at the forefront and centre stage.
- The new format would include External Affairs Minister and Defence Minister from India and their American counterparts Secretary of State and Defence Secretary.
- The new ministerial dialogue would enhance strategic coordination between the two nations.
- It will be helpful to coordinate more closely on Afghanistan, developments in the Asia Pacific, Indian Ocean and also in the Middle East (West Asia).
- It will insulate the India-US strategic relationship from feuds over trade and deep divide on economic integration policies as trade and commercial issues were discussed in the Strategic and Commercial Dialogue earlier.
Why in news?
- 2+2 dialogue held in New Delhi in Sep, 2018. India signed COMCASA.
Evolution of India-US Defence relations:
- Two parallel tracks of dialogue began in the 1990s.
- The strategic dialogue covering nuclear issues shifted gears following the nuclear tests of 1998 and imposition of sanctions by the U.S.
- India-U.S. concluded a bilateral civil nuclear cooperation agreement in 2008.
- The defence dialogue began in 1995 with the setting up of the Defence Policy Group at the level of the Defence Secretary and his Pentagon counterpart and three Steering Groups to develop exchanges between the Services.
- A decade later, this was formalised and enlarged into the India-U.S. Defence Framework Agreement which was renewed for 10 years in 2015.
- Today, the U.S. is the country with which India undertakes the largest number of military exercises which have gradually evolved in scale and complexity.
- During the Cold War, more than three-fourths of India’s defence equipment was of Soviet origin. This gradually began to change, and in recent years, the U.S. and Israel emerged as major suppliers.
- The Indian Air Force went in for C-130J Hercules and the C-17 Globemaster aircraft, along with Apache attack helicopters and Chinook heavy lift helicopters.
- The Indian Navy acquired a troop carrier ship and the P-8I long-range maritime reconnaissance aircraft.
- An agreement for 24 multi-role helicopters for the Indian Navy is expected soon.
- The Indian Army went in for the M-777 howitzers and artillery radars.
- From a total of less than $400 million of defence acquisitions during 1947-2005, the U.S. has signed defence contracts of over $15 billion since.
- Pathfinder projects have been identified under this Defence Technology and Trade Initiative (DTII).
- To get around export control licensing and other bureaucratic hurdles, an India Rapid Reaction Cell in the Pentagon was set up. In 2016, India was designated as a ‘Major Defence Partner’ country.
- Another step forward in the middle of this year was the inclusion of India in the Strategic Trade Authorisation-1 (STA-1) category, putting it on a par with allies in terms of technology access. This should enable the DTII to graduate to more ambitious projects.
- UAV Technology sale to India approved. The transfer of the state-of-the-art UAV technology to India will be the first significant progress after India’s entry into the exclusive Missile Technology Control Regime (MTCR) and after the US has designated India as a major defence partner.
India as a major partner
- India has been designated as a major defence partner of the United States. It puts India on a par with the closest allies and partners of the US
- India’s Major Defence Partner status has been made a part of the India Amendment in the National Defence Authorization Act (NDAA), 2017 of US
- Significance: The designation of this status is unique to India, a non-NATO ally of US. It institutionalizes the progress made by US to facilitate defence trade and technology sharing with India to a level at par with its closest allies and partners. It will facilitate US to transfer of advanced defence technology to India. It will also strengthen institutional effectiveness of US-India Defence Trade and Technology Initiative (DTII) and the durability of the India Rapid Reaction Cell in Pentagon
Changes in US export law to benefit India:
- United States (US) has made changes in its export control laws that will benefit India by facilitating smoother transfer of technologies and arms.
- These changes have been made in par with recognition of India’s status as a ‘Major Defence Partner’.
- The new rule creates a presumption of approval for Indian firms seeking to import the Commerce Department-controlled military items, except weapons of mass destruction-related goods.
- Henceforth, companies will not need a license at all after becoming a Validated End User (VEU).
- Under it, India will be denied licences only in the rarest circumstances.
India and US are moving towards three “foundational agreements”
- Logistics Exchange Memorandum of Agreement or LSA Logistics Support Agreement (LSA)
- Communications Interoperability and Security Memorandum of Agreement (CISMOA)
- Basic Exchange and Cooperation Agreement (BECA)
Significance of these agreements:
- The most immediate utility for New Delhi of these agreements is the expected gains in defence co-production with the US as the latter eases the terms of technology transfer
- For that, the signing of these agreements should be strictly made contingent on US assurance on transfer of technology
Impediments in defence partnership:
- India’s red tapism
- Offset policies
- The major impediment is Washington’s reluctance to share high-end technology
Critically comment on defence cooperation between India and USA. (200 Words)
While traditionally, India and the United States have not had very close co-operation in High Technology areas that has been changing in the recent past. India and the US are collaborating in a range of areas, out of which Defense is a major area of cooperation.
- Defense Framework Agreement – A 10 year Framework Agreement on defense was first signed between the two countries in 1995 and renewed in 2005 and 2015. All defense co-operation between the two take place within that Framework.
- Bilateral Exercises and Joint Training – The two countries now participate in more military exercise with each other than with any other. Malabar is an annual bilateral exercise between the Navies of the two countries. India accepted an invite to participate in RIMPAC (rim of pacific)- a US organised naval exercise. The forces of both the countries regularly train at defense training establishments of each other.
- Institutional Mechanisms – There are many institutional mechanisms to promote defense co-operation between the two. There is a Defense Policy group, a Defense Procurement and Production Group and a Defense Joint Working Group. This is in addition to the direct Service to Service Executive Steering Group.
- Defense Equipment – Indian imports of defense equipment form the US has crossed $ 10 Billion. Along with trade, India and US have established a Defense Trade and Technology Initiative to promote co-development of defense technology. [A modern acquisition of Indian air force from the US C- 130J super Hercules military transport aircraft crashed]
- Information sharing for counter terrorism operations is highlight of the relations.
However, the legacy of Non Alignment along with other strategic reasons is causing a hindrance in closer co-operation in strategic areas like defense manufacturing. While India is the largest democracy, the US is the oldest one and both countries share common ideals and common vision. It is thus imperative that they take a holistic view of their relationship and develop even closer ties.
“A sophisticated engagement with the US is in India’s interests. But there is reason to worry that the escalating nature of our defence agreements with the US will put us on a slippery slope where we may not be able to manage our own geopolitical positioning in the world’s major conflicts.” Critically analyse. (200 Words)
Recent developments like
- U.S.-India Defence Technology and Partnership Act in US Congress which would institutionalize Defence Technology and Trade Initiative (DTTI) framework between India and US.
- Ongoing debate regarding signing of agreements like logistics support agreement (LSA) which will allow use of Indian bases for logistic purposes and vice versa, and likewise Basic Exchange and cooperation agreement (BECA).
- Emergence of US as the largest arms supplier to India
- Currently India conducts more military exercise than any other country
These all are signs of increasing defence and strategic partnership between the two.
These developments certainly benefit India’s defence capabilities and defence Industrial complex but one cannot discard the inclination of US towards India in wake of more assertive communist China and power shift from the west to the east.
India should be wary and cautious because:
- India losing its strategic and sovereign defence sphere to US because of the need to provide bases to US
- India’s lack of defence Infrastructure in the wake of expansionist china cannot be balanced with such partnerships in long run until unless India has a full-fledged and sustainable defence industrial complex. One lesson that India can learn from its over-dependence on Russian defence infrastructure for several decades in last century.
- Can make Russia (a trusted partner for India) weary of plans of India
- Such partnership might get involved India in geopolitical problems which are not of its own making.
- India should play a role to diffuse global conflict rather than escalating the tensions.
- US’s role towards Pakistan is not clear, its support of Pakistan both economically and through the supply of defence equipment has led to an upsurge in India’s defence expenditure as well. Such situation has not led the subcontinent to get rid of actual problems like health, illiteracy and poverty.
- Increased presence of US in Indian Ocean region because of support to pivot to Asia through these agreements can disturb the peace and stability
- Relations with China can take a backseat as it can view relations a counter to OBOR and a containment of China
- Vulnerability to India in case of conflict with US itself
However, the concerns may be unfounded because-
- Countries like France and Germany have similar arrangements with US and they not necessarily align with US as happened in US invasion of Iraq in 2004
- Diversifying the defence relations with US seeks to strengthen the notion of Multi-polar world
- Will be seen as counter by India to growing China-Pakistan closeness and can make China mend ways
- Unnecessary geopolitical tensions of South China Sea that impact India’s interest (OVL in Vietnam) would be kept in check
India should tread on this path very carefully and not let in any way compromise it stand in the global domain. India would not be able to stress its role in international arena until and unless it is viewed as an independent power rather than walking crutches from US or any other world power for that matter of fact.
Should India be cautious of over indulging with USA?
With increasing defence cooperation as seen by the DTTI ( defence technology and trade initiative) and the LEMOA (logistic exchange memoranda of understanding), India has grown a closer defence partnership with the USA. This could lead to;
- An informal military alliance with Washington and possible request for participation in armed conflict.
- Possible embargo of weapons and ammunition to India in case of a conflict of interest.
- Possible loss of sovereignty of India’s foreign policy.
- Possible strain in Indo-Russia and Indo-Chinese ties due to this growing partnership.
However, such fears are unfounded because;
- India has a diverse base of weapons suppliers including Russia and Israel.
- None of these treaties include basing rights or rights to use Indian assets by the USA anywhere in the world.
- Countries like Germany and France(in Libya) and Turkey (in Iraq) have successfully opposed the USA with respect to international issues though they are all crucial allies of the USA.
Therefore, though these agreements do not mean an alliance of any sort, India must take care to ensure that it is not perceived so by either her allies or her enemies. What is important is the realization that the Indo-US closeness is just one among many handshakes of India in her quest to build stable international relations.
- Do you think India’s growing relations with USA constrain India’s ability to conduct its diplomacy with other major powers like China and Russia? Discuss. (200 Words)