The U.S.-India 2+2 Dialogue

On 6 September 2018, U.S. Secretary of State Mike Pompeo and Secretary of Defense James Mattis will meet their Indian counterparts in New Delhi. The inaugral 2+2 Dialogue is an opportunity for both sides to discuss strengthening their strategic, security, and defense co-operation in the Indo-Pacific and beyond. Aayush Mohanty argues that top of the list should be the impact of U.S. sanctions on India’s defense and energy needs.

Aayush Mohanty
September 03, 2018

The 2+2 dialogue between the United States and India wassupposed to take place on 6 July 2018. It has now been rescheduled for 6 September 2018 in New Delhi. The dialoguehas already been postponed three times this year. While the U.S.-India relationship has grown exponentially since the beginning of the 21stcentury, it has also led to India being asked to make decisions that might have negative long-termimplications for its relationshipwith Russia and Iran.

India's relations with Russia were sent in a tailspin when Indian officials announced they were reconsidering a host of essentialdefensecontracts because of cost sharing issuesand because of the United States’Countering America’s Adversaries Through Sanctions Act (CAATSA). There has been no formal U.S. pressure as far as India’s relations with Russia are concerned. But the Act was passedwithout a waiver clauseputting undue pressure on India and other U.S. allies, mainlyNATO allies like Turkey and Greece, who purchase weapons from Russia.

Russia's newest weapon is its most potent air defensemissile system, the S-400 Triumf.  The S-400 Triumf'sclosest rival is the Patriot Missile, which is as potent, but the S-400 is ahead as far as time taken to set up the missile system is concerned,along with range. While the S-400 has not been battle tested, it has piqued the interest of many countries wanting to modernize their military equipment. Customers include China and Belarus, but also U.S. allies in the MiddleEast like Saudi Arabia and NATO member Turkey. While these countries have already bought the missile system, India has negotiated a deal worth US$ 5.9 billion to purchase the Russian S-400 Triumf. The CAATSA might hurt India’s future defenseacquisitions, especially from Russia. At the same time, it may affectIndia’s defensein light of China’s massive military buildupon the Line of Actual Control  near the Indian border. 

In the case of Iran, the United States has put formal pressure on India and also on other allies and partners. The current U.S. administration has been vocal about its expectations from the Iranian regime, but Iran’s defiance with renewed threats has placed India in a bind. The United States asked India to cut its oil imports from Iran to "zero"as sanctions on Iran are going to be re-imposed. In response, India did reduce its imports from Iran in June. India's relations with Iran are not just based on energy supplies but infrastructure projects like the North-South Corridor bilateral infrastructure connectivity.

While India works out how it might continue oil imports from Iran, the Iranian Government has made clear that if India considers other major oil producing countries like Saudi Arabia, Russia, Iraq, or the United States for its energy needs, India will stand to lose its “special privileges”with Iran.  These privileges include a lower current account deficit as India’s oil imports from Iran are not denominated in dollars.Iran is also accusing India of not investing enough in Chabahar Port. The Port will give India, Iran and Afghanistan access to Central Asian markets and become a regional hub for trade. It has also become more valuable as it allows India to circumvent Pakistan’s denial of transit access.

Meanwhile, the NATO summit in Brussels also started on a sour note with President Trump asking members to spend four percentof their total GDP on defense,and accusing Germany of courting Russia on the conjecture that Germany is dependent on Russian energy supplies by paying Russia “billions of dollars”and not putting the same amount into Germany’s defense budget.President Trump’s demands from NATO allies to contribute more and allegations against Germany for having warm relations with Russia in light of U.S. sanctions might lead some to believe that the "2+2 dialogue" will not be fruitful. But the dialogue would be an opportunity for the Minister of External Affairs and Minister of Defense to put the Indian view forward, that its foreign policy will not be influenced by the United States’ recent decisions on CAATSA and pulling out of the Iran Deal.

Fortunately, the Russian missiles in question do have a chance of being procured without India facing any sanctions. This is because the John S. McCain  National Defense Authorization Act for Fiscal Year 2019allows allies and partners who have traditionally been dependent on Soviet and, later, Russian defense equipment to procure weapons provided the ally or partner is taking or will take steps to reduce its dependence on Russian equipment. While this gives India a ticket to escape sanctions, it also makes it clear that now the United States has to offer defense equipment to reduce the dependence on Russian equipment.

The United States views India as a counter-balance to China in Asia.  But the U.S. sanctions contradict its plans to counter China through India by depriving India of its energy and defense needs, especially in light of China's increasingly arbitrary and hostile actions on India's borders, the Indian Ocean and the SouthChina Sea. The U.S. Secretary of State and Secretary of Defense need to meet their Indian counterparts to work on these issues as soon as possible.The point of the 2+2 dialogue is strategic, security and defenseco-operation. Both countries need todiscuss their strategy with each other instead of the United States seemingly imposing its will on India and India snubbing U.S. interests and requests. The dialogue, of course, will not sort out these underlying issues but might give both sides an opportunity to kick start a new chapter in Indo-U.S. relations. 

Aayush Mohanty is a Research Associate at the Vivekananda International Foundation, a think tank based in New Delhi. The views of the author do not necessarily reflect the views of the Foundation