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ShreeMetalPrices: Russia halts weapons deliveries to India Due to US Sanctions


Russian military shipments to India have come to a halt as the countries attempt to find a payment system that does not violate US sanctions. According to sources with knowledge of the situation.

Payments from India for weapons worth more than $2 billion have been held up for more than a year. And Russia has stopped supplying credit for the pipeline of about $10 billion in spare components as well as two S-400 missile-defense system the batteries that have yet to be delivered.

According to officials who asked not to be identified due to the sensitivity of the issue. Russia is India’s most important supplier of arms for border disputes with China and Pakistan.

Due to worries about secondary sanctions, India is unable to pay the bill in US dollars. And Russia is still averse to accepting rupees because of fluctuating exchange rates, according to the officials. Due to doubts about its ability to obtain sufficient goods on the open markets at a reasonable price, they claimed. New Delhi does not want to finalise the transaction in Russian rubles either.

In order to avoid accumulating rupees, the Indian government suggested Moscow use the money from armament sale to invest in Indian debt & capital markets. But Vladimir Putin’s administration doesn’t find that appetising.

A top Indian government source suggested using euros and dirhams. The currency used to pay for India’s imports of heavily discounted Russian crude. But utilising these currencies to buy weapons would draw more attention from the US about sanctions than buying oil. And it might also increase prices because of unfavourable exchange prices for India.

India’s External Affairs Minister Subrahmanyam Jaishankar, who stated that the rupee settlement needed further effort.

Weapons deliveries

Concern over the trade imbalance is also natural, Jaishankar told reporters. “We need to urgently collaborate with our Russian friend on how to correct that imbalance.”

India now uses more than 250 Russian-built Su-30 MKi fighter jets, 7 Kilo-class submarines, and more than 1,200 T-90 tanks, all of which require spare parts and are still in service for at least another ten years. Five S-400 missile defence systems have been ordered; three have previously been delivered.

One of the worst affected by the stoppage in supplies from Moscow. According to the people, is the Indian Air Force, which is dependent on a Russian fleet of fighters and helicopters. They said that it is doubtful whether Russia can carry out routine maintenance. Which might create vulnerabilities along India’s borders with China & Pakistan.

When Prime Minister Narendra Modi welcomes the Group of Twenty leaders in September, with the war being a major topic of discussion, the relationship between India and Russia will come under further scrutiny. According to the sources, that meeting may be preventing India and Russia from quickly working out a payment plan for arms.

Russia continues to be India’s top supplier of military gear. But due to sanctions & increasing competition from other producing nations, purchases have decreased by 19% over the past five years. India has carefully considered how to respond to Russia’s war in the Ukraine, calling for a pause in hostilities while choosing not to participate in voting on UN resolutions denouncing the invasion.

In the coming weeks, Modi will meet with counterparts from the United States and other developed countries. These nations have pledged to supply India with defence technology because they consider India as a safeguard against China’s rising economic and military aggression. Even yet, weaning the country off Russian weapons while retaining a respectable defensive posture would take years.

Although the government of President Joe Biden has mostly refrained from reprimanding India for its interactions with Russia, involving holding off on sanctions for the S-400 air defence system. It has still taken some action.