India can’t indefinitely “balance” between Russia and the US as it’s impossible for it to fulfill all of its stated commitments to both of them, meaning that the country will have to eventually choose which of the two it wants to lean closer towards in spite of the consequences that this will have for its relationship with their rival, and the trigger event that will force it to make a decision one way or another is whether it’ll comply with the US’ forthcoming reimposition of sanctions against Iran.
India’s decision to ink the S-400 contract with Russia during President Putin’s visit to the country is monumentally symbolic in the sense that it shows that New Delhi isn’t afraid to “defy” the US’ CAATSA sanctions threats, even though there’s a plausible probability that it’ll earn a waiver from Washington due to its gradual reduction of Russian arms purchases over the years and its overall fulfilment of US national security interests as it relates to “containing” China. The US might therefore look the other way and refuse to implement its threatening sanctions against India so long as its Great Power partner puts the S-400s to use against China and Pakistan, as it’s expected to do. Even if this happens, then India still can’t maintain its delicate “balancing” act for much longer because it’s impossible for the country to fulfill its contradictory commitments to Russia and the US.
The Russian-American-Indian Triangle
On the one hand, India openly flouted the Trump Administration’s threats to sanction it for purchasing the S-400s and at least officially says that it will continue doing business with Iran. This latter promise relates to not only continuing to purchase its energy resources but also conducting trade with Russia via the Iranian-transiting North-South Transport Corridor (NSTC), both of which would be in open violation of the US’ planned imposition of sanctions against the Islamic Republic early next month. There’s also been talk for the past couple of years of India signing a Free Trade Agreement (FTA) with the Russian-led Eurasian Economic Union (EAU). Altogether, these commitments would tie India closer to the emerging Multipolar World Order and probably go a long way towards improving its relations with China by default, possibility facilitated by their shared Russian partner’s backchannel mediation.
On the other hand, however, India might never have been sincere in its statements about ignoring American sanctions against Iran as judging by reports that its private companies have dramatically decreased their import of the country’s resources in recent months. The US said that it’s working to help India replace Iranian energy, possibly with its own and/or Saudi Arabia’s, and there remains the distinct possibility that New Delhi secretly negotiated a sanctions waiver for the S-400s in exchange for complying with Washington’s forthcoming sanctions regime. Moreover, Trump claimed that Indian representatives reached out to his government to negotiate a FTA with the US as soon as possible, which is totally incompatible with its desire to reach one with the EAU too. In addition, the US will not tolerate India trading with Russia via Iran and strengthening the Islamic Republic’s economy.
As for what India itself is trying to achieve, it believes that it’s so crucial of a geostrategic fulcrum in Eastern Hemispheric affairs that no Great Power can risk its ire and take a chance that New Delhi will turn against them in response to any pronounced pressure that they might try to put on it to go along with their preferred policies. Ideally, India thinks that it can indefinitely play Russia and the US off against one another in order to continue benefiting from this heated competition over its “loyalty”, but for as attractive of a plan as that might sound on paper or have seemed to have at least superficially been up until this point, it’s impossible to sustain it in the near future once America reimposes its anti-Iranian sanctions next month. This will inevitably force India to choose one over the other.
A “Zero-Sum” Game?
For starters, India will probably fail to reach FTAs with both the EAU and the US because the latter will not allow the former to have “backdoor” access to the American marketplace through its own overlapping deal with New Delhi. The US is also very unlikely to support Russian-Indian trade in general, let alone that which passes through Iran via the NSTC and contributes to relieving the heavy pressure that Washington wants to put on the Islamic Republic’s economy through its forthcoming sanctions. About those, the whole purpose is to push Iran to the breaking point where the HybridWar goals of Regime Tweaking (political concessions), Regime Change, and Regime Reboot (“Balkanization” through constitutional reform) succeed, and India’s FTA with the EAU and its attendant commitment to the NSTC would therefore undermine the US’ grand strategic plans in this respect.
As it stands, it appears as though the US might waive its CAATSA sanctions against India but probably won’t do so when it comes to the “secondary” ones related to Iran, both in terms of importing its energy resources and conducting trade across the NSTC that would inevitably benefit the Islamic Republic. There is a chance, however, that the second-mentioned half of the latter sanctions could hypothetically be waived if the US calculates that it’s better to have India “contain” China in Central Asia and Pakistan in Afghanistan via this Iranian-transiting trade route, but that’s only in the realm of educated conjecture for now. Thus, India’s real choice will come down to which of the two parties it wants to pursue a FTA with, either the EAU or the US, which will in turn shape the country’s geostrategic role in the New Cold War.
Two Visions Of The Future
India could still, at least in theory, sign a FTA with the EAU while abiding by the US’ anti-Iranian sanctions so long as it discontinues its work on the portion of the NSTC that runs through the Islamic Republic and stops purchasing the country’s energy resources. The government, however, has at least signaled that it doesn’t want to compromise on its stance towards Iran, which if sincerely expressed, would definitely lead to problems in its relationship with America. India thinks that it’s much too important of a partner in the US’ “China Containment Coalition” for Washington to walk away from it out of fury that New Delhi didn’t go along with its anti-Iranian sanctions regime, but that might be a bit of an arrogant presumption to make given how serious the Trump Administration is about enforcing its economic punishments against the Islamic Republic.
Therefore, another vision of the future presents itself in which India pulls away from the NSTC and greatly decreases its purchase of Iranian energy resources in order to reach the best possible FTA with the US. This scenario wouldn’t see the FTA with the EAU going anywhere except possibly resulting in some symbolic agreements, if that. Although the argument has been made many times before by Russian analysts that there are advantages to choosing their country over the US, the objective reality is that the American economy is much larger than Russia’s by an incomparable magnitude, and that India is predisposed to choose Washington over Moscow if it was forced by America to decide between them for a FTA. Still, that possible development shouldn’t be interpreted as “anti-Russian” because India will still cooperate with its decades-long partner in the military, nuclear energy, and other fields.
That said, India would only be able to maintain its CAATSA sanctions waiver so long as it continues to roll back its purchase of Russian arms and gradually replace them with American, “Israeli”, and French ones, among many others. Similarly, the US and its partners will definitely try to take Russia’s market share in other spheres such as the nuclear energy one, though just like the military domain, it’ll be a decades-long work in a progress that won’t yield immediate results. Nevertheless, the writing is on the wall because India also needs the US to “contain” China just as much, perhaps even more, than the US needs it to do the same, and barring any unexpected Russian-mediated rapprochement between New Delhi and Beijing, the so-called “China factor” will continue to guide India closer to the US than to Russia if the proverbial “push came to shove”.
The signing of the long-awaited and much-speculated-upon S-400 deal between Russia and India is a welcome move by the South Asian Great Power in the direction of upholding its delicate “balancing” act between Moscow and Washington, but for as symbolic of a “crowning achievement” as this event might seem, it would be premature to celebrate it as a geostrategic victory of sorts. India didn’t “defy” the US because it might even earn a sanctions waiver so long as Trump believes that the country will continue proportionately reducing its purchase of Russian arms and/or satisfying US national interests abroad, especially if the S-400s are put to use against the US’ Chinese and Pakistani rivals. In addition, India will be forced to choose whether to comply with the US’ forthcoming anti-Iranian sanctions regime or not, and it’s unlikely – though not impossible – that it’ll be granted a waiver if it refuses.
The issue of investing in the Iranian-transiting NSTC for facilitating Russian-Indian trade is also a very sensitive issue for the US because of the positive knock-on effect that it’ll have for the Islamic Republic’s economy, thereby counteracting some of the planned consequences of America’s sanctions against it even though this could also lead to India contributing to the “containment” of China in Central Asia and of Pakistan in Afghanistan as some in Washington might see it. On top of that, the Trump Administration is keen to eliminate all “backdoors” to its marketplace that third parties have exploited through its FTAs with various countries, so there’s close to no way that it would ever sign such a deal with India if New Delhi already decides to clinch a similar agreement with the EAU. What all of this means is that India’s “balancing” act is soon coming to an end and it’ll have to choose between Russia and America.