India and Russia concluded the contract for five S-400 ‘Triumf’ missile systems, one of the biggest defence deals in recent times, after the annual summit between Prime Minister Narendra Modi and Russian President Vladimir Putin. The announcement of the deal, that could attract sanctions from the United States, was made in a joint statement issued by both sides.
"The sides welcomed the conclusion of the contract for the supply of the S-400 Long Range Surface to Air Missile to India," said the statement. However, the two sides failed to conclude two other major deals, for Stealth frigates and assault rifles, that were reportedly ready, as officials said further negotiations were needed.
"India gives top priority to its relations with Russia. In this rapidly changing world our relations have become more relevant," Mr. Modi said after the meeting, his third summit with Mr. Putin this year.
Significantly, the agreement for the estimated US $5.43 billion (₹40,300 Crores) S-400 system was not referred to by either leader in their press statements. It was also the only agreement not included with eight other agreements exchanged in the presence of Mr. Modi and Mr. Putin, a possible move to avoid the controversy engendered when the last such deal for Rafale aircraft in 2015 was announced directly by the Prime Minister.
Deliveries of the S-400 will begin in 24 months, at the end of 2020, a government source told The Hindu . As per the procedure, the source also said that India would pay about 15% in advance, likely through the rupee-rouble mechanism both countries use for trade in their own currencies.
The U.S. has warned the deal would invoke sanctions under the Countering America's Adversaries Through Sanctions Act (CAATSA) law that penalises defence purchases from Russia, Iran and North Korea, as soon as the first payment is made, unless President Trump grants a "waiver". On Friday, the US Embassy issued a statement warning that any waiver for the S-400 deal would only be considered on a "transaction-by-transaction basis". "We cannot prejudge any sanctions decisions," the US Embassy spokesperson added.
When asked, a government source rejected the US statement, saying that the S-400 missile system deal was taken in the "national interest". "The negotiations [for the agreement] preceded CAATSA by a long period of several years. It fulfills a certain defence requirement for India and the government has taken the decision in the national interest, " the source said.
Putin asks tips from Modi on GST
The two leaders reserved most of their time during Mr. Putin’s brief 22 hour visit for one-on-one interactions, spending three hours at dinner on Thursday and nearly two hours on Friday in intense talks on a wide range of bilateral and global issues. Mr. Putin is understood to have even asked Mr. Modi for tips on implementing the GST (Goods and Services Tax), which Russia is hoping to roll out soon.
"We were able to talk face-to-face without any rush about then critical problems in the world, discuss issues of principle in the development of Russian-Indian cooperation and lay out new horizons," Mr. Putin told journalists on Friday.
The eight agreements that were signed on Friday spanned diverse areas ranging from space and nuclear cooperation to railways and agriculture. The two countries set a target of $30 billion bilateral trade by 2025, and Mr. Putin invited Mr. Modi to Vladivostok for the economic forum in September 2019.
Russia also agreed to assist India with training for its Gaganyaan project to put a human in space by 2022. "Russia has always been with us in the development journey of India. The next goal in our space journey is to send an Indian astronaut in Gaganyaan. I am very happy that you have assured full cooperation of Russia in this mission," Mr. Modi said.
