NEW DELHI: As India and US get ready for a ‘2+2’ dialogue in early Julybetween the foreign and defence ministers, US sanctions over Russia withIndia may bring the two countries to a very uncomfortable place, making thefirst high-level interaction potentially difficult. Sushma Swaraj andNirmala Sitharaman are expected to travel to Washington for the first suchdialogue, which has been postponed a couple of times.

While India can negotiate a deal over Iran Chabahar port in forthcomingIran sanctions, using the precedent of the previous sanctions regime, theextreme nature of the CAATSA sanctions regime would make it impossible forIndia to follow. Recent reports said India and Russia had completed pricenegotiations for the Rs 40,000 crore S-400 Triumf anti-missile defensesystem, and were likely to announce it before the official summit inOctober.

But for the deal to go through may require finding a way around CAATSA(Countering America’s Adversaries Through Sanctions Act) which mandatesthe Trump administration to punish entities engaging in a significanttransaction with the defence or intelligence sectors of Russia. As perIndian officials, the sanctions regime could kick in on any defence buysabove $15 million, which is really small change in defence transactions.

Indian officials also said they were talking to Russia to explore waysaround the US sanctions and this was one of the points of discussion duringthe recent informal summit in SOCHI.

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In the early days after the nuclear tests of 1998, when a series ofsanctions were slapped on India, the first conversations between US andIndian officials entailed making exceptions for India, especially in thearea of technology exports. So among the ideas doing the rounds is toobtain an exception for S-400. Officials point to the fact that US allieslike Saudi Arabia and Turkey are both close to signing deals for S-400, andany sanctions planned for India would apply to these countries, drawingcomfort from the fact that India is not alone.

Although the economy czars of both countries are not going to be at thedialogue, India and US are preparing for some friction on that front, withthe US threatening to remove preferential trade privileges for India.