By Erika D. Trujillo, Director of Strategy & Development
Over the past months we have all been watching the movements of China very carefully within the context of Russia's actions in Ukraine. Last month I discussed this with journalist Michael Radunski, and it has so far been interesting to see how these relations are playing out. However, today, I was able to 'flip the script' and gain his insight on another topic, namely, India.
India's internal politics and continued support for Putin's regime, despite the increasingly documented human rights issues, has been somewhat underreported and overlooked in the current context, especially in trade compliance. Fortunately, I was able to get a better feel for the cultural and geopolitical motivations from Michael's years of experience working as a political and economic journalist in New Delhi.
What I learned: as with many political situations, there are long-term and complex histories at play and we should not underestimate the emotional closeness of hard power threats on India's borders (from China to Kashmir to Pakistan) and the presence of these threats in daily Indian life. With that in mind, it is easier to understand the friendship with Russia, as it has been a reliable trade partner, especially for defence and armament, during times when the west was focused on non-proliferation.
Since India is a democracy, the west may have taken for granted their alignment on global issues, something that we cannot afford to do when looking ahead at trade policy. Further, it should not be overlooked, the role of strong-man politics pervasive in Modi leadership in both India's communication and non-willingness to condemn Putin's tactics.
What this means: Especially in light of the ongoing business related to the S-400 missile defence system India purchased from Russia, as trade compliance professionals we should keep an eye out for a US response under CAATSA, as this may prove insightful for future trade controls issues. If a waiver is granted this may signal a softer diplomatic approach to India's current position, but any sanctions would be a clear signal to all partners that the US will take action to ensure compliance is respected.
Regardless of any potential sanctions measures, many companies are now adjusting to the idea that India may become one of many hub countries for Russia in terms of diversion, and are assessing how export controls to India may be affected by developing human rights catch-alls.
One thing is clear: we can't afford to narrowly focus only on Russia, but must look at geopolitics strategically and holistically to better prepare our compliance programs for shifting and ever developing challenges.