Context: Recently, the US reiterated that its stands on sanctions have not changed for those countries who purchase Russian arms and weapons. The sanctions include India too. 

Background

• After the violent clash and intrusion of China in Galwan Valley, India took the decision to bolster its Airforce squadron for any future conflict scenario. 
• Recently, the Defence Acquisition Council approved the procurement of 21 MiG-29 fighter jets for the Indian Air Force (IAF), an upgrade for 59 of these Russian aircraft and the acquisition of 12 Su-30 MKI aircraft. 

Highlights of the announcement

• The US urged all of its allies and partners to give up deals with Russia that poses a risk of triggering sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA). 
• It mentioned that the US government is aware of the reports regarding India’s planned defense purchase from Russia and is considering the situation where a specific transaction would result in sanctions or not. 
• The U.S. was continuing to “closely monitor” the situation and supported a “peaceful resolution” of the situation and mentioned that there are strict criteria for considering a waiver, and each transaction is evaluated on a case-by-case basis. 

What is CAATSA?

• It stands for Countering America’s Adversaries through Sanctions Act (CAATSA).
• It is a federal law and was enacted in August 2017 with the objective of countering the aggression by Iran, Russia and North Korea through punitive measures e.g. imposing sanctions. 
• It includes sanctions against countries that engage in significant transactions with Russia’s defence and intelligence sectors.
• Section 231 of the Act empowers the US President to impose sanction on persons engaged in a “significant transaction” with Russian defence and intelligence sectors.

Two of the most stringent of these sanctions are:

• Suspending export licences related to munitions, dual-use and nuclear-related items; and
• Ban on American investment in equity/debt of the sanctioned person.

The act gives authority to the US President to “impose five or more of the sanctions described in section 235 (of CAATSA)” out  12 types of sanctions. 
The U.S. President was given the authority in 2018 to waive CAATSA sanctions on a case-by-case basis as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2019.

• In the past US has threatened India with CATSAA on its deal for S-400 with Russia.

What sanctions will be imposed?

• prohibition on loans to the sanctioned person.
• prohibition of Export-Import bank assistance for exports to sanctioned persons.
• prohibition on procurement by United States Government to procure goods or services from the sanctioned person.
• denial of visas to persons closely associated with the sanctioned person.

Implications on India

• Although the sanctions are not directly imposed on India, it affects India nevertheless. The major reason for this is the nature of relationship India has with Iran and Russia. India happens to have strong trade ties with both these nation states.
• No, as per the provisions of the bill, US imposes sanctions on all its adversaries, as well as all countries and firms dealing with this adversaries.
• So, if India does not remove ties with Russia and Iran, the US may invoke sanctions against India. India cannot afford to lose the growing diplomatic relations with the US, but neither can it afford to forego supplies of defence and oil from Russia and Iran.

What is STA(Strategic Trade Authorization)?

• It is basically US recognition of India's growing status both politically and financially(here, other nations also come).This action befits India's status as a major defence partner of US. Prior to that India having an status of STA-II.
• Now India became 3rd Asian country ,after Japan and South Korea,37th country at global front.
• Traditionally it is given to those countries who are member of NSG,Wassenaar Arrangement,Australia Group and MTCR but India is member of 3/4 groups (i.e. except NSG)
• Note:-It is first country in South Asia and first country to get it without NSG. Even Israel is not given STA-1 status so far. By this we import a large segement of dual use technologies and other strategic technologies(i.e. in civil space,defence sectors etc.)