Biden’s key Indian American aide warns India of “consequences” of bypassing sanctions

US Deputy NSA Daleep Singh cautions against constructing rupee-rouble payment mechanism, buying more Russian oil

The United States has sent a top Indian American official to New Delhi to deliver a blunt message: There will be “consequences” if India tries to circumvent US sanctions against Russia with a rupee-rouble payment mechanism.

US Deputy National Security Advisor for International Economics Daleep Singh, the key architect of President Joe Biden’s sanctions against Moscow, delivered the message Thursday, hours before the arrival of Russian Foreign Minister Sergey Lavrov.

In a first for the US administration, Singh also publicly stated that India must not expect that Russia, as a “junior partner” of China, would assist India if there were more incursions along the Line of Actual Control, the Hindu reported.

Read: Ro Khanna asks India to condemn Putin, stop buying Russian oil (March 28, 2022)

“I come here in a spirit of friendship to explain the mechanisms of our sanctions, the importance of joining us, to express a shared resolve and to advance shared interests,” Singh told journalists between his official meetings.

“And yes, there are consequences to countries that actively attempt to circumvent or backfill the sanctions,” he was quoted as saying.

“We are very keen for all countries, especially our allies and partners, not to create mechanisms that prop up the [Russian] rouble, and those that attempt to undermine the dollar based financial system,” he stated in reply to a question.

Singh declined to comment on what the “consequences” would be or whether India’s purchase of the S-400 missile system from Russia, which has used a “rupee-rouble” alternate payment mechanism thus far, would attract sanctions.

He would rather keep those discussions with the government “private”, Singh added.

The US warning came came after a meeting this week between officials of the Bank of Russia and Reserve Bank of India to discuss alternative payment mechanisms and routing through banks that are immune to international sanctions.

When asked how India’s ties with Russia could affect its partnership with the US in the Quad — a strategic security dialogue among Australia, India, Japan and the US — Singh said there was a “shared recognition in the Quad that China is a strategic threat to a free open and secure Indo-Pacific.”

Read: Ami Bera asks India not to buy discounted Russian oil (March 17, 2022)

“Russia is going to be the junior partner in this relationship with China. And the more leverage that China gains over Russia, the less favorable that is for India, I don’t think anyone would believe that if China once again breached the Line of Actual Control, that Russia will come running to India’s defense,” he observed.

Singh said the US “stands ready” to help India diversify its energy and defense hardware requirements if it chose to reduce its “dependence” on Russia. India’s current intake of Russian oil at present does not violate US sanctions.

“What we would not like to see is a rapid acceleration of India’s imports from Russia as it relates to energy or any other any other exports that are currently being prohibited by us or by other aspects of the international sanctions regime,” he said.

Singh said he had spelt out the US’ “five-channel” approach to dealing with Russia over its war in Ukraine, during what he called an “honest dialogue” with Indian government officials.

Over two days in Delhi, Singh met his counterpart Deputy NSA Vikram Misri , Commerce and Industries Minister Piyush Goyal, Foreign Secretary Harsh Shringla and officials in the Prime Minister’s Office and the Finance Ministry.

“What we are doing is pushing Russia back decades. I think they’re going back to the USSR [Soviet Union], in terms of their technological sophistication, that reduces Putin’s ability to exert influence and to exercise power on the world stage.” Singh said.

His discussions in Delhi were “very similar to the discussions we’ve had with our close friends and partners in Europe, and in Asia,” he said.

However, Indian officials made no mention of Singh’s warnings. Singh and Shringla discussed “global issues of mutual interest” besides economic cooperation, strategic partnership and ongoing Russia-Ukraine war, they said.

“Look forward to working together on global issues of mutual interest, including in G20,” External Affairs Ministry Spokesperson Arindam Bagchi said after Singh’s meeting with Shringla.

In Washington, NSC Spokesperson Emily Horne stated Tuesday that “Daleep Singh will be in New Delhi to continue our ongoing consultations with the Government of India, and advance a range of issues in the US-India economic relationship and strategic partnership.”

Read: US warns India, others against sharp rise in Russian oil imports: Report (March 31, 2022)

“Singh will meet with Government of India officials to deepen cooperation to promote inclusive economic growth and prosperity, and a free and open Indo-Pacific.”

“Singh will consult closely with counterparts on the consequences of Russia’s unjustified war against Ukraine and mitigating its impact on the global economy.”

“Singh will also discuss priorities of the Biden Administration, including the promotion of high-quality infrastructure through Build Back Better World and the development of an Indo-Pacific Economic Framework,” she stated.