Despite U.S. pressure, India clears way for $2.2-billion defense deal with Russia

September 18, 2018 - 9:17

TEHRAN - Barely two weeks after India signed a historic defense deal with the U.S. called Communications Compatibility and Security Agreement (CCSA), now the Narendra Modi government in New Delhi has cleared the way for an ambitious $2.2-billion frigates deal with Russia.

There had been speculation that New Delhi would cancel the deal with Moscow under the U.S. pressure, since the Trump administration has imposed sanctions on Russia and declared that any country that engages in defense or intelligence sharing with Russia could also be subject to sanctions. But, New Delhi by going ahead with the Russia deal has sent a strong message to the U.S.

The agreement, which will allow India to procure from Russia four new warships for the Navy, will be signed during a summit between President Vladimir Putin and Prime Minister Narendra Modi in New Delhi in October, said a report in Economic Times, adding that the efforts were on to give finishing touches to the contours of the deal.

The draconian financial sanctions by the U.S. on Russia have made the purchase of weapons from Moscow a difficult affair, since Indian banks are unable to transfer money to defense companies in Russia. To evade the problem, an alternative arrangement has been done to pay in Indian rupee instead of the standard US dollar.

The ET report said that the clearance procedure before the signing is in the final stage and that India could make payments through the rupee-rouble route.

India and Russia had signed an intergovernmental agreement to proceed with the deal in October 2016, but price negotiations and technical consultations, which also involved the Indian shipyard, delayed the final clearance, which could be one of the big takeaways from the Modi-Putin summit that is scheduled to take place in New Delhi on October 5, the report stated.

Earlier there were reports that India too might face the heat of U.S. sanctions if it goes ahead with the deal with Moscow. The reports quoted senior Pentagon officials expressing concern over recent talks between New Delhi and Moscow.

Randall Schriver, the Pentagon's top Asia official, questioned the idea that the U.S. would protect its relationship with India and not impose sanctions on it for its growing defense ties with Russia.

“I would say that is a bit misleading. We would still have very significant concerns if India pursued major new platforms and systems (from Russia),” Schriver said at a think-tank event, earlier this month, according to Reuters.

“I can't sit here and tell you that they would be exempt, that we would use that waiver, that will be the decision of the president if he is faced with a major new platform and capability that India has acquired from Russia,” Shriver added.

In India, the intelligentsia circles have urged the government to not let India’s relations with Russia be affected by U.S. hegemonic politics.

Brahma Chellenay, a geostrategist and commentator, in an interview with Tehran Times, said the ties between Russia and India should not be affected by U.S. sanctions. “Russia is a tried and tested friend of India. Although the U.S. has now become the largest seller of arms to India, Russia remains important to India’s interests. India has made it clear to the U.S. that it will go ahead with the S-400 purchase and other defense deals with Russia,” he said.

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