India Could Trigger US's CAATSA Penalties by Buying More Russian S-400s

Chandigarh: India’s potential acquisition of additional Russian S-400 Triumf air defence systems – and possibly advanced S-500 Prometey (Prometheus) variants – risks triggering US penalties under its Countering America’s Adversaries Through Sanctions Act (CAATSA), military sources warned, further straining already frayed ties with Washington amid the ongoing trade tariff standoff.

India has reportedly launched discussions with Russia in recent weeks to procure supplementary S-400 systems, which demonstrated high operational effectiveness during Operation Sindoor, to further augment its multi-layered missile defence architecture. Media reports, quoting unnamed defence officials, reported that India’s military was also evaluating the advanced and longer-range S-500 systems for imminent acquisition.

And, last week, Dmitry Shugayev, head of Russia's Federal Service for Military-Technical Cooperation, confirmed that New Delhi and Moscow were at the ‘negotiation stage’ for more S-400s. "There is potential to expand our cooperation in this area. That means new deliveries (of S-400s),” he told the Russian news agency TASS on September 2.

Meanwhile, local defence industry sources noted that while India’s 2018 contract for five Almaz-Antei S-400 self-propelled surface-to-air (SAM) systems for $5.5 billion included provisions for maintenance, spare parts and long-term support, it did not feature any fixed-price option or preferential terms for similar follow-on purchases. Consequently, negotiations for these advanced air defence units would necessitate fresh commercial discussions, influenced not only by rising costs but also by shifting geopolitical dynamics and even the high risk of CAATSA-related sanctions.

Declining to be named, as they were not authorised to speak publicly on such sensitive matters, a cross-section of these officials also cautioned that the apparent bonhomie between US President Donald Trump and Prime Minister Narendra Modi, exhibited over the weekend, offered no guarantees that tariff tensions or related issues had eased. On the contrary, rising anti-India rhetoric from senior US officials, they said, underscored the ‘real possibility’ that CAATSA-related sanctions remained a ‘live concern’ should Delhi deepen defence ties with Russia through further S-400 or S-500 acquisitions.

“President Trump’s unpredictable capriciousness – evident in the 50% tariffs he has imposed on assorted Indian imports, including a 25% penalty for continued Russian oil purchases – could easily spill over into India’s military commerce with Moscow,” said a senior defence industry official in Bangalore, requesting anonymity. Such punitive measures, he added, were ‘highly likely’ if India acquired additional S-400, and prospective S-500 systems.

It’s worth recalling that India’s 2018 S-400 acquisition unfolded under the shadow of CAATSA, enacted during President Trump’s first term (approved in July 2017 and signed into law the following month).

Consequently, the complex purchase, involving intricate rupee-rouble financial arrangements to circumvent CAATSA stipulations, was deliberately structured to avoid US dollar involvement, as India’s military valued the S-400s capabilities, which it deemed ‘far superior’ to any US-origin air defence system on offer to it from Washington. These included the Lockheed Martin Patriot Missile System (PAC-3), the Lockheed-Raytheon THAAD (Terminal High Altitude Area Defense) and the Lockheed-Kongsberg (Norway) NASAMS-2 (National Advanced Surface to Air Missile System-2).

CAATSA was broadly designed to penalise countries engaging in significant defence or intelligence transactions with Russia, Iran or North Korea. But primarily, it was driven by Washington’s response to Moscow’s alleged interference in the 2016 US election and its annexation of Crimea from Ukraine two years earlier. The Act’s principal objective was to dissuade Moscow’s key partners – like India – from purchasing military hardware by threatening punitive sanctions, similar to the prevailing 25% penalty imposed on Delhi for continued imports of discounted Russian oil.

US pressure on India for its S-400 buy escalated further at the time, after Washington invoked CAATSA against China in September 2018 and its NATO ally Turkey in December 2020 for their respective purchases of similar Russian air defence systems. Earlier, in 2019, the US had also ejected Turkey from its F-35 Lightning II stealth fighter programme, amid concerns that the S-400’s radar could compromise the platform's advanced capabilities.

But CAATSA conveniently included a built-in provision, granting the US president authority to issue waivers – making enforcement inherently political. Analysts noted that such flexibility was intended to help Washington balance legal obligations with geopolitical realities, particularly in regions like the Indo-Pacific, where diplomatic nuances often outweighed sanctions invocations.

However, despite the much-touted personal camaraderie between Trump and Modi, the former never granted India a CAATSA waiver. In fact, when asked about potential sanctions after the S-400 deal, Trump had threateningly warned: “India will soon find out.”

This issue was ultimately addressed by his successor, Joe Biden, who in July 2022 formally exempted Delhi from sanctions over its S-400 acquisition – acknowledging India’s growing strategic weight as a key Indo-Pacific partner and a critical counterbalance to a hegemonic China.

Thereafter, by mid-2023, the Indian Air Force had received three of its five S-400 systems in a staggered delivery schedule and deployed them along India’s northern border with China, its western front facing Pakistan, and at a central location to allow flexible repositioning; each reportedly performed ably during Op Sindoor. The remaining two systems, also covered by the CAATSA exemption, were slated for delivery by late 2026 and early 2027.

Meanwhile, online research has revealed that many security analysts and advisors associated with the Trump administration viewed past leniency towards India under CAATSA as a ‘one-time exception’. They also indicated that if India proceeded with acquiring additional S-400 systems, senior Pentagon officials and Republican Congress members could well push strongly for CAATSA enforcement, seeing it as a critical test of US credibility and its laws.

“Washington may find it harder to justify accommodation for India a second time over the S-400s or S-500s,” said a senior security official in Delhi, speaking anonymously. He added that Trump administration officials – who had repeatedly criticised India for purchasing discounted Russian oil and profiting from its resale after refining it – could well enforce CAATSA if Delhi inducted further S-400s, or its advanced model.

After all, it’s no secret in security and diplomatic circles that enduring trade and tariff frictions have begun to strain India-US defence relations, injecting uncertainty not only into military commerce, but also into broader strategic alignments.

Previously agreed frameworks like iCET (Initiative on Critical and Emerging Technology) and INDUS-X (India-US Defence Acceleration Ecosystem) now face significant headwinds. Defence procurement and co-development projects too were encountering delays or long pauses, exacerbating, for Delhi, a broader erosion of trust. And, as economic frictions spilled into the strategic realm, concerns were also mounting over the long-term durability of a bilateral defence partnership, once viewed as central to counterbalancing a militaristic China.

Critical acquisitions like General Electric GE F404IN20 after-burner engines for India’s indigenous Tejas Light Combat Aircraft Mk1A variant, too have been adversely impacted in recent months, as has the deal for local co-production of advanced GE-F414IN20 power packs agreed upon in mid-2023. Other joint development programmes like the Stryker infantry combat vehicle and Javelin anti-tank guided missiles, too, remain in limbo.

The Indian Navy’s planned acquisition of six additional Boeing P-8I maritime surveillance aircraft and the Army’s procurement of six AH-64 Apache attack helicopters, also appear to have stalled. Official sources noted that the P-8I platforms incorporate export-controlled components, making them especially vulnerable to bureaucratic delays or political roadblocks as bilateral relations deteriorated.

Alongside, India’s $3.5 billion deal – signed in late 2024 – for 31 General Atomics MQ-9B SeaGuardian/Predator UAVs has similarly slowed. The agreement, which included incorporating 15-30% indigenous content into the UAVs and launching a global MRO (Maintenance, Repair & Overhaul) hub for them, has seen little forward movement. Accordingly, the Indian Navy, which fronted negotiations for the MQ-9B for all three services, now finds itself navigating a ‘delicate zone’, shaped by changing US strategic concerns under the second Trump administration.

Initiatives like the Quad – featuring the Indian, US, Australian and Japanese navies and once hailed as a cornerstone of the Indo-Pacific security architecture – also appear vulnerable now to shifting political winds in Washington.

According to a recent New York Times report, Trump is unlikely to visit India later this year for the Quad leaders’ summit, despite earlier indications he would attend. Citing unnamed sources, the August 30 report attributed this shift to Trump’s tense phone call with Modi on June 17, during which the US president’s claims of brokering a ceasefire between India and Pakistan in May reportedly led to a strained exchange that soured ties between the two leaders.

The Times’ report also highlighted how personal dynamics and escalating trade tensions have disrupted what was once a landmark diplomatic and strategic partnership, adversely impacting defence technology cooperation frameworks between the US and India.

And while none of these procurements or programs have officially been scrapped, defence and security insiders in Delhi warn of a “palpable layer of uncertainty” hanging over them. This fog of ambiguity, they say, risks not just pending deals, but the entire future of India-US defence cooperation, bringing Delhi’s long-standing trust deficit with Washington glaringly back into focus.

That said, if CAATSA sanctions do come knocking once more, they would only deepen the strategic misalignment amid already escalating regional security challenges. It would also force India to rethink and realign its defence ties, diversify its materiel suppliers and put on hold – or even shelve – initiatives like joint exercises with the US, arms co-development, and even intelligence sharing.

For the US, such a move would be a major strategic misstep – alienating one of its most important Indo-Pacific partners at a time when regional security challenges demand close cooperation. It would also undermine broader initiatives like the Quad and erode hard-won trust built over years of engagement. In trying to punish India, Washington risks severely weakening its own influence in the region and isolating itself, more than deterring anyone else.

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