The CAATS (Countering America’s Adversaries through Sanctions) Bill has been introduced in US congress
What is CAATS about?
Countering America’s Adversaries through Sanctions Act (CAATSA) aims to counter the aggression by Iran, Russia and North Korea through punitive measures.
The Act primarily deals with sanctions on Russian interests such as its oil and gas industry, defence and security sector, and financial institutions.
The Act empowers the US President to impose at least five of the 12 listed sanctions enumerated in the Act on persons engaged in a “significant transaction” with Russian defence and intelligence sectors.
Two of the most stringent of these sanctions are the export licence restriction by which the US President is authorised to suspend export licences related to munitions, dual-use and nuclear related items.
It extends to the ban on American investment in equity/debt of the sanctioned person.
Why India need to worry about CAATS?
India has planned defence procurement from Russia which could potentially come under US sanctions under the Countering America’s Adversaries through Sanctions Act.
India is reliable much on Russia to strengthen its defence preparedness by equipping the armed forces with state-of-the-art arms
India since independence, followed a policy of diversification for arms import which has led it to source weapons from more than two dozen countries.
Both in term of the number and value of contracts, the US is way ahead of other major suppliers, though Moscow still remains India’s predominant defence supplier.
It is needless to say that the bulk of the potent weapons in India’s arsenal are of Soviet/Russian origin and that some of these are not available for purchase from any other source.
What are the implications of CAATS over India?
CAATSA, if implemented in its stringent form, is likely to affect India’s arms procurement from Russia in a number of ways.
CAATSA is likely to affect all the joint ventures (JVs) existing or planned between Indian and Russian defence companies.
The Act will also affect India’s purchase of spare parts, components, raw materials and other assistance from Russia.
Thus US authorities will try to influence their Indian counterparts to ignore the Russian platforms, though it is entirely up to India to make its own judgement.
