Bloomberg learned about the delay in payments for Russian weapons to India

India does not want to pay the bill for the supply of Russian weapons in dollars for fear of secondary sanctions, writes Bloomberg. Moscow imposed Western sanctionsconsiders illegal

The supply of Russian weapons to India is suspended, countries are trying to find a payment mechanism that would not violate US sanctions , Bloomberg reported, citing Indian officials.

India's payment for weapons worth more than $2 billion has been delayed by about a year, while Russia has stopped providing a loan for about $10 billion worth of spare parts, as well as the future delivery of two batteries of the C missile defense system, according to one of the agency's interlocutors. -400.

As noted by Bloomberg, Russia is the largest arms supplier to India. However, the latter is unable to pay the bill in US dollars for fear of secondary sanctions, while the former remains reluctant to accept rupees due to exchange rate volatility, agency sources say. And New Delhi itself does not want to conduct a deal in rubles, because it is not sure that it will be able to purchase a sufficient amount of currency on the open market at a fair price.

As a solution to the problem, the Indian authorities have offered Russia to invest proceeds from arms sales in Indian debt and the capital market to avoid accumulating rupees, but Moscow does not like this option, writes Bloomberg.

According to a senior Indian government official, one possible solution could be to use the euro and dirhams, as is already the case with paying for Russian oil imports . However, the use of these currencies could draw more scrutiny from the United States, as well as increase India's spending due to unfavorable exchange rates.

Another option that the Indian authorities are discussing is a mechanism to compensate Russia for Indian imports at the expense of the cost of weapons, says one of the Indian officials. But this option is also not easy to implement, since last year Russia had a positive trade balance with India: exports exceeded imports by $37 billion.

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The Ministry of Defense, the Ministry of Foreign Affairs, the Ministry of Finance and the Central Bank of India, as well as the Kremlin and Rosoboronexport did not respond to Bloomberg inquiries.

According to the agency, recently the issue of payments for arms supplies has become one of the main issues in the dialogue between Russia and India. It was discussed during the visit of Indian Prime Minister National Security Adviser Ajit Doval to Moscow in January, and also this week at talks between Russian Deputy Prime Minister Denis Manturov and Indian Foreign Minister Subrahmanyam Jaishankar in New Delhi, writes Bloomberg.

India operates more than 250 Su-30MKI fighter jets, seven Kilo-class submarines and more than 1,200 Russian-made T-90 tanks, Bloomberg writes. All this equipment will be in use for another ten years and requires spare parts. In addition, under the contract, India should receive five regimental sets of S-400s, three of which have already been delivered, the publication clarifies.

In total, a quarter of Russian arms sales abroad go to India, Russian Ambassador to India Denis Alipov told RBC last February. According to him, the fact that Moscow offered New Delhi unique conditions for the purchase of weapons made it possible to reach a total volume of orders in the amount of $14 billion.

Russia and India signed an agreement on a program of military-technical cooperation for ten years in December 2021. The document was discussed as part of the Russian-Indian summit in New Delhi, which was attended by Indian Prime Minister Narendra Modi and Russian President Vladimir Putin . At the same time, the parties signed a contract for $590 million, according to which AK-203 assault rifles will be produced in India.

Last March, the US said it was considering imposing sanctions on India under the CAATSA (Countering America's Adversaries Through Sanctions) Act. This 2017 law provides for the imposition of measures against non-US individuals who cooperate with prohibited Russian sectors, projects and individuals.

At the same time, the Indian authorities have not officially announced that they will support sanctions against Russia. However, last March, Bloomberg sources reported that New Delhi discussed the issue with the United States and other G7 countries on the sidelines of the G20 meeting and the parties seemed to be satisfied with the agreements reached. According to the agency, the Indian government has asked banks and traders to adhere to the requirements stipulated by the sanctions.

The Russian authorities consider the sanctions imposed against the country illegal. “These sanctions largely provoke the global crisis. Their authors <...> to a greater extent hit their own national interests, their own economies, the well-being of their citizens, ”Putin said.