India and Russia concluded Friday the contract for the supply of S-400 missile systems despite the threat of US sanctions.
There was no public announcement of the deal by Prime Minister Narendra Modi or visiting Russian President Vladimir Putin. Kremlin spokesman Dmitry Peskov told Russian reporters that the deal was signed on the fringes of the summit.
“Both sides welcomed the conclusion of the contract for the supply of the S-400 Long Range Surface to Air Missile System to India,” the joint statement said.
Sources said the S-400 deal “fulfils India’s defence needs”, and the government has taken the decision in “national interest”.
The S-400 Triumf air defence systems — the deal value is over USD 5 billion — will be delivered in 24 months from the signing of the contract. Incidentally, Beijing signed a deal with Moscow in 2015 to buy six battalions of the S-400 system, and deliveries commenced in January 2018.
The S-400 deal has been caught in diplomatic crossfire between US and Russia, with Washington threatening Delhi and other partners with sanctions if their defence deals with Moscow go through.
While the CAATSA (Countering America’s Adversaries Through Sanctions Act) was passed unanimously by the US Congress and signed by President Donald Trump, the US Congress has now passed a law granting waiver to some countries. India is one of the intended beneficiaries, but Trump has to personally certify the deal for a waiver.
CAATSA, if implemented in its stringent form, would have affected India’s defence procurement from Russia. The Russian maker of S-400s — Almaz-Antey Air and Space Defense Corporation, Joint Stock Company — is on the US list of 39 Russian entities.
When contacted, the US embassy spokesperson said, “The intent of our implementation of CAATSA is to impose costs on Russia for its malign behaviour, including by stopping the flow of money to Russia’s defence sector. CAATSA is not intended to impose damage to the military capabilities of our allies or partners.”
“The waiver authority is not for a blanket waiver. It is transaction-specific. There are strict criteria for considering a waiver. Waivers of CAATSA section 231 will be considered on a transaction-by-transaction basis. We cannot prejudge any sanctions decision,” the spokesperson said.
After the Modi-Putin summit talks, eight pacts, including one on cooperation between ISRO and Roscosmos on India’s manned space mission project Gaganyaan, were signed. Pacts were also inked in the fields of nuclear energy and railways. The two sides also discussed opportunities in aviation, railways and river crafts. Putin pitched Russian passenger jets as a competitive alternative to US jet manufacturers.
India and Russia, Modi said, are committed to cooperating in the fight against terrorism. Putin said the two countries have agreed to step up cooperation in combating the menace of terrorism and drug trafficking.
On terrorism, while there was no specific reference to Pakistan-based terrorist groups, the joint statement said, “The two sides denounced terrorism in all its forms and manifestations and reiterated the need to combat international terrorism with decisive and collective response without any double standards. The sides agreed to converge their efforts to eradicate terrorist networks, their sources of financing, arms and fighters supply channels, to counter terrorist ideology, propaganda and recruitment. The sides condemned all kinds of state support to terrorists including cross-border terrorism and providing safe havens to terrorists and their network.”
Official sources pointed out that the reference to cross-border terrorism was aimed at Pakistan.
“Recognizing the importance of adopting the Comprehensive Convention on International Terrorism, pending in the United Nations, to become part of the international law, both sides called upon the international community to make sincere efforts towards its early conclusion,” the joint statement said.
To address the threats of chemical and biological terrorism, the joint statement said both sides supported and emphasised the need to launch multilateral negotiations at the Conference on Disarmament, an international convention for the suppression of acts of chemical and biological terrorism.
On defence cooperation, they recalled the long history of mutual trust and mutual benefit, and said both sides expressed satisfaction at the significant progress made on the ongoing projects of military-technical cooperation and recognised the positive shift towards joint research and joint production of military-technical equipment between the two countries.
Sources, however, made it clear that there was no ‘Make-in-India’ component in the S-400 deal. “It is just a purchase,” sources said.
There was also considerable amount of discussion on connectivity between India and Russia, through the International North-South Transit Corridor planned via Iran. “They discussed how they can implement it effectively,” sources said.
The two leaders also discussed potential trade growth, and put a target of USD 25 billion by 2025. Sources said while current bilateral trade is about USD 10 billion, and it witnessed a 20 per cent growth in the last year, both leaders felt that there was scope for more. They also set a target of USD 15 billion as investments from each side, totalling USD 30 billion. Last year, Putin told Modi that Russian companies had invested USD 12.5 billion in Gujarat’s oil sector.
Putin, sources said, was interested in knowing about the GST implementation in India. They spent some amount of time discussing issues pertaining to GST.
The two leaders also discussed the impact of oil prices on their economy, and the Russian President conveyed Russia’s readiness to increase oil and gas production to meet the energy needs of India.
On the cultural side, sources said that the two sides will also work jointly towards tiger conservation over the next one year and translate the works of contemporary authors.
To promote people-to-people exchanges, the two sides decided to have a Ganga-Volga dialogue, a civilisational dialogue.