Explained: NDAA and its link to the waiver to India against America’s punitive CAATSA law

On 14 July, India had received a huge boost when the United States’ House of Representatives passed an amendment that approved a waiver to India against the punitive CAATSA sanctions for its purchase of the S-400 missile defence system from Russia.

Speaking on this to news agency ANI, American Congressman Ro Khanna, who had authored and introduced the amendment to the National Defense Authorization Act (NDAA), said that it was in the best national interest of the US and the US-India defence partnership.

“The reason it’s in the interests of the United States is we need a strong partnership with India. Defence partnership, a strategic partnership, especially because we are two democratic nations and with the rise of China and with the rise of Putin this alliance is critical for the United States,” the Indian-American Congressman said to ANI.

It's a historic amendment to strengthen the US-India relationship since the civilian nuclear deal. It's in the interests of the United States, we need a strong partnership with India: US Congressman Ro Khanna on the NDAA amendment pic.twitter.com/De0YBZhUTd

— ANI (@ANI) July 27, 2022

Now awaiting passage through the Senate, the amendment had been passed by voice vote in the House of Representatives, receiving a majority of 330 to 99.

Here’s a simple guide to understanding what NDAA is and how it fits in with CAATSA.

NDAA explained

The National Defense Authorization Act (NDAA), is passed by Congress each year and is legislation that directs how military funding should be used while also modifying the organisation and policies of American defence institutions.

Congress uses the NDAA to establish defence priorities, make organisational changes to military agencies, and provide guidance on how funding should be used.

In addition to the Department of Defense, the legislation also covers military-related programs run by other agencies, such as the Department of Energy’s nuclear weapons programs and the Federal Bureau of Investigation's counterintelligence activities.

The bill is also a big opportunity for all members of Congress, not just those in traditional defence-related committees, to have an impact on foreign policy by introducing amendments.

One such example is Ro Khanna’s amendment to the NDAA, which was passed last week by the House of Representatives, that urges the Joe Biden administration to use their authority to provide India with a Countering America’s Adversaries Through Sanctions Act (CAATSA) waiver to help deter aggressors like China.

What’s CAATSA?

First off, CAATSA, as is popularly known, is the Countering America’s Adversaries through Sanctions Act is a federal law.

It was signed into law on 2 August 2017, by then President Donald Trump. CAATSA was passed by the Senate on 27 July 2017, 98–2 and the House 419–3.

Under this law, the American government can impose sanctions on any country that has “significant transactions with Iran, North Korea or Russia”. The law entails economic and financial penalties for any nation that transacts with Russia on arms.

Section 231 of the law has outlined 39 Russian entities that are on the list, which invites sanctions. They include major defence firms like Rosoboronexport, Sukhoi Aviation, Russian Aircraft Corporation MiG, as well as Almaz-Antey Air and Space Defence Corporation JSC, who have made the S-400 system.

While signing the bill into law, Donald Trump had called it “seriously flawed” and said it “encroaches on the executive branch’s authority to negotiate”.

Why was CAATSA created?

The idea behind CAATSA was to punish Russia for the Crimean annexation in 2014 and its alleged role in the 2016 US presidential election.

The sanctions are intended to economically hurt Russia over its international actions. CAATSA primarily allows the US government punish any country that engages in transactions with Russian defence and intelligence sectors.

Has US imposed CAATSA on a country?

In December 2020, the United States announced that it was imposing sanctions on NATO-ally Turkey for its purchase of Russia’s S-400 missile defence system.

Then Secretary of State Mike Pompeo had said, “Today’s action sends a clear signal that the United States will fully implement CAATSA Section 231 and will not tolerate significant transactions with Russia’s defense and intelligence sectors.”

Sanctions were imposed on Turkey’s main defence procurement agency the Presidency of Defense Industries (SSB) for “knowingly engaging in a significant transaction with Rosoboronexport (ROE), Russia’s main arms export entity” the office of the US State Department spokesperson said in a statement.

The sanctions on Turkey raised apprehensions that Washington would impose similar punitive measures on India.

In 2021, the US levied CAATSA sanctions on China’s Equipment Development Department (EDD) of China’s Ministry of Defence for its purchase of 10 SU-35 Russian combat aircraft in 2017 and S-400 equipment in 2018.

Also read: Why India just can’t afford to walk out of its S-400 missile deal with Russia

Why hasn’t US imposed CAATSA on India yet?

The issue has been looming over India since October 2018 when New Delhi signed a $500 billion deal with Russia to buy five units of the S-400 air defence missile systems — known to be Russia’s most advanced long-range surface-to-air weapon — despite warning from the then Donald Trump administration that such a deal would invited US sanctions.

In March 2022, it was reported that President Biden was yet to decide on the matter.

The decision on CAATSA for India is a tricky one — India-US relations have been on the upswing for the past two decades, especially in the area of defence where trade has surpassed the $20 billion mark and is only likely to further increase.

Furthermore, the US sees India as an important ally in its fight against China. If sanctioned, the Quad collective, of which India is part, could be significantly impacted.

How has New Delhi responded?

On the possibility of being sanctioned for its S-400 deal with Russia, the Ministry of External Affairs (MEA) has reiterated that New Delhi follows an independent foreign policy and its defence acquisitions are guided by its national security interests.

“India and the US have a comprehensive global strategic partnership and India has a special and privileged strategic partnership with Russia. We also pursue an independent foreign policy. This applies to our defence acquisition and supplies which are guided by our national security interests,” MEA spokesperson Arindam Bagchi had said in November 2021 when asked to comment on India's position on the matter.

With inputs from agencies

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