New Delhi seals $5bn missile deal with Moscow

Cheryl Sanders
October 6, 2018

If the USA does impose sanctions on India, it is unclear how India could pay Russian Federation for the military equipment, since the law bars dollar-denominated financial transactions. The Triumph missile deal comes amid USA threat of sanctioning countries under CAATSA for their defence purchases with Russian Federation.

"India gives priority to its relations with Russian Federation".

Although there was no public signing, the deal was sealed during President Vladimir Putin's ongoing visit to New Delhi for an annual summit with Indian Prime Minister Narendra Modi.

India is also reportedly planning on acquiring 4 Krivak-class frigates from Russian Federation, two of which will be built in India, which will be a $2.5 billion deal.

A major part of discussion between government-to-government and business-to-business has been the eventuality of any form of sanctions by the USA that could restrict trade between the two countries.

Listing vast business opportunities in India, he said India is modernising its ports under Sagarmala project, building metro rail projects in 50 cities, expanding rail and road network and modernising airports.

Manoj Joshi, a foreign policy expert, said the deal was "extremely significant" because of its capability of reaching targets "300km away". However, the improving ties between India and Russian Federation could hit its relation with the U.S., say experts.

S-400 is known as Russia's most advanced long-range surface-to-air missile defence system. The S-400 deliveries are expected to begin in two years.

The US is in a hard position as it seeks to contain China through better ties with India, which like Washington has been unnerved by Beijing's growing assertiveness. If India successfully launches the Gaganyaan mission, it will be the fourth nation to do so after the United States, Russia and China.

India and China had a stand-off over a Himalayan plateau previous year after it was claimed by both Beijing and Indian ally Bhutan. Now India has imported around $15 billion of arms from the United States in the past ten years.

Strategically, Russia has facilitated India's membership in the Shanghai Cooperation Organisation and endorsed India's long-held demand for a permanent seat at the UN Security Council.

The National Security Council at the White House said in a statement that the Trump administration urges all "of our allies and partners to forgo transactions with Russian Federation that would trigger sanctions" under the act, known as CAATSA. The two countries also signed eight agreements covering space, nuclear energy and railways at a televised news conference.

"Our two countries have common interests in cooperating on countering terrorism, on developments in Afghanistan and Indo Pacific, climate change, and in organisations such as the SCO, BRICS, the G20 and ASEAN", Modi said. "If you let the Americans make the arms procurement decisions for you once, it will happen again and again".

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