Defence payments ‘no more an issue’: Russia

ksenia kondratieva Moscow | Updated on August 29, 2019

The meeting being organised by the Indian Banks’ Association will see participation from the RBI and Russia’s central bank representatives

Country to deliver five S-400 missiles worth $4.3 billion to India after 2020

As India and Russia are getting ready for high level talks at the Eastern Economic Forum (EEF) at Vladivostok in Russia’s Far East, Russian officials said the two countries have solved the payments issues for ongoing defence contracts as well as the advance for S-400 Triumph air defence missile systems.

“Payment is no more an issue. There were initial difficulties due to banking restrictions…but we were talking on government-to-government level and we now use different currencies. In case of India, we rely on rupee-rouble settlements,” Victor Kladov, Director, International Cooperation and Regional Policy of Rostec Corporation, told reporters on the sidelines of MAKS aviation show in Moscow on Wednesday.

He refused to further elaborate on mechanisms used for defence payments between the two countries.

Sticking to the schedule

The issue has been highlighted by Russian defence manufacturers and government officials last year after Indian banks stopped processing payments related to defence deals due to risks of US sanctions under the CAATSA (The Countering America’s Adversaries Through Sanctions Act) law.

“The system is now adapted to the new reality,” Kladov noted.

Dmitry Shugaev, Director of Federal Service for military technical cooperation, which oversees negotiations of defence deals and facilitates defence contracts, in a separate briefing said the issues with advance payment for S-400 has been resolved and the projects are going in line with schedule.

The delivery of five S-400 systems worth $4.3 billion to India are expected to start after 2020.

Deals in talks

Cooperation in defence sector is expected to be one of the main topics during the annual bilateral summit between Narendra Modi and Vladimir Putin in Vladivostok next week.

Several deals, including $1-billion deal for 200 Ka-226T helicopters, manufacturing of 7,50,000 units of AK-103 assault rifles in India under the ‘Make in India’programme as well as deal for six P-75I project submarines could be discussed in Vladivostok, officials said.

“We are hoping that the meeting between president Putin and prime minister Modi will bring new development to our Ka226 project,” Viktor Kladov noted.

According to Andrey Boginsky, Director General of Russian Helicopters, the Rostec holding company, the Ka-226 helicopter will be shown to Modi during the Vladivostok summit which could, he hopes, speed up the decision-making.

In February this year, Russian Helicopters signed five contracts with Indian private sector companies for supply of units and part of Ka-226 helicopters as 140 helicopters will be produced in India, according to the deal terms.

Boginsky also noted that during the Vladivostok summit it will deliver one civilian Mi-171A2 helicopter (recent modification of the Mi-8/17 family helicopters) to a private customer in India — Vectra Group. The contract for one helicopter with an option for another one machine was signed by Russian Helicopters and Vectra in 2017 in Dubai, emerging as the first export contract for Mi-171A2.

Published on August 29, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like