Later this week, India’s Prime Minister Narendra Modi is set to travel to the U.S., where he will hold a bilateral meeting with President Joe BidenJoe BidenGrant Woods, longtime friend of McCain and former Arizona AG, dies at 67 Sanders on Medicare expansion in spending package: 'Its not coming out' Glasgow summit raises stakes for Biden deal MORE before attending the first-ever in person Quad Leader’s summit, a strategic dialogue which will also be attended by the leaders of Australia and Japan.
The U.S.-India relationship is increasingly defined by defense and strategic cooperation, even if contentious issues sometimes arise. During the Trump administration, India and the U.S. were embroiled in a trade war. India lost access to the generalized system of preferences program affecting about $6 billion in Indian exports to the U.S. Efforts to conclude a trade deal were unsuccessful, and since then the number of irritants in the commercial relationship have only grown. For example, India’s proposed e-commerce rules are seen as discriminatory against U.S. companies such as Amazon and Walmart, while India’s IT rules were seen as a retaliation for Twitter refusing to take down accounts relating to India’s farmers’ protest, an ongoing protest that began in August 2020 in response to agricultural reforms passed by the government.
However, Biden’s looming decision on imposing Countering America’s Adversaries Through Sanctions Act (CAATSA) sanctions on India has the potential to be especially disruptive to bilateral relations. CAATSA, signed into law in 2017, placed new sanctions on Russia for its actions in Ukraine, as well as its interference in the 2016 U.S. presidential election. The broad scope of the legislation means India will be subject to CAATSA sanctions when it takes delivery of the S-400 missile defense system from Russia at the end of 2021.
Biden has the ability to grant India a waiver — but there is still an active debate as to whether India meets the waiver criteria. And, there is the issue of Congress: Sen. Robert MenendezRobert (Bob) MenendezWhy is Trump undermining his administration's historic China policies? Senate GOP signals they'll help bail out Biden's Fed chair Democrats weigh changes to drug pricing measure to win over moderates MORE (D-N.J.), chairman of the Senate Foreign Relations Committee, has in the past expressed opposition to the idea of a waiver, saying that expanding the waiver process “undermine[s] the very essence of those sanctions against Russia.” As chairman of the Senate Foreign Relations Committee, Menendez’s opposition would be hard to ignore.
Strategically, sanctioning India does not make sense, especially as the two sides are working together closely on shared concerns about China, the situation in Afghanistan, and the Quad, a key foreign policy priority for Biden. The U.S. views China as a strategic competitor and believes that “the dominant paradigm is going to be competition.” India faces an increasingly aggressive China on its border: The two sides have been involved in an armed standoff on the border in Ladakh since April 2020, a dispute that turned violent in June 2020, resulting in the first fatalities on the border since 1975. As for Afghanistan, both India and the U.S. share concerns about the potential for a spike in terrorism following the U.S. withdrawal.
Furthermore, sanctions will reintroduce an area of uncertainty into the U.S.-India relationship, and bring up painful memories of 1998, when the U.S. sanctioned India for its nuclear tests. Congress may be underestimating the impact that imposing sanctions on India will have. Despite the progress made over the last 20 years, there is still a strong anti-U.S. lobby in India, whose voices will be empowered if Washington goes ahead even with “very mild” sanctions. U.S. sanctions will also strengthen arguments made by Russia that the U.S. is an unreliable partner, while also injecting doubt into other Indo-Pacific partners, such as Indonesia and Vietnam, about U.S. commitment to the region — the opposite of what the U.S. hopes to achieve.
The Biden-Modi bilateral meeting is a chance for Biden to remove this obstacle and announce that he will grant India a waiver for its purchase of the S-400, noting that it is in the national security interests of the United States. India is a key strategic partner and continues to work together with the U.S. on a wide variety of issues; therefore, it is in the best interests of the United States not to punish India.
Akhil Bery is director of South Asia Initiatives at the Asia Society Policy Institute.