India, Russia seal $6.9b missile system deal

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NEW DELHI - India and Russia have concluded a contract for US$5 billion (S$6.9 billion) worth of missile systems during Russian President Vladimir Putin's visit to India, amid the threat of United States sanctions against India.

Under the deal, India will purchase five S-400 Triumf anti-aircraft weapons systems from Russia.

"The (two) sides welcomed the conclusion of the contract for the supply of the S-400 long-range surface-to-air missile systems to India,'' said a joint statement.

The missile systems are expected to bolster India's defence capabilities, with the local media highlighting how it would bring all air bases in rival Pakistan within India's striking range.

Mr Putin and Indian Prime Minister Narendra Modi sealed the contract during their talks yesterday.

But the deal risks US sanctions under a federal law called Countering America's Adversaries Through Sanctions Act (Caatsa), which was used to impose sanctions on Iran, North Korea, and Russia.

The US has warned that countries buying Russian military hardware could face sanctions. Ahead of the talks in India, Washington had warned New Delhi that the missile system deal was a "focus area for the implementation of Caatsa''.

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Mr Modi, who has fostered closer ties with the US, yesterday underlined the importance of India's ties with Russia.

"India gives top priority to its relations with Russia. In this rapidly changing world, our relations have become more relevant," said Mr Modi in an address to the media with Mr Putin.

Analysts said the signing of the missile system deal in the face of US opposition was significant.

Professor Gulshan Sachdeva from Jawaharlal Nehru University said that because of the US threat of sanctions, it became "very important for the Modi government, which is seen to be pro-US, to really show that Indian foreign policy is very independent".

Former Indian foreign secretary Lalit Mansingh added: "The (Russian missile) system is very important. This is not available from any other source. It will be useful for us to have it.''

India and Russia were Cold War allies, with their relationship dating back to the 1950s. For years, India depended on Russia for its military supply. But its growing proximity to the US against the backdrop of China's growing assertiveness has impacted its ties with Russia, which in turn has developed links with Pakistan.

Yet, amid these changes, the defence relationship between India and Russia remains strong.

Though India is increasingly sourcing weapons from other countries such as the US and France, most of its military hardware is still of Russian origin and it is also dependent on Russia for spare parts.

During Mr Putin's two-day visit, the two sides also focused on boosting bilateral trade, setting a goal of US$30 billion by 2025.

"We discussed trade and investment cooperation and broadening this cooperation is of utmost importance," said Mr Putin.

Trade volume has lagged behind that of India and the US. Bilateral trade between India and Russia totalled US$10.68 billion last year, while India-US bilateral trade was US$126 billion.

India has started consultations on a free trade agreement with the Eurasian Economic Union, which consists of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.

The Indian Space Research Organisation and the Russian space agency Roscosmos also signed a memorandum of understanding on a human spaceflight programme.

India had announced in August that it would send three astronauts into space by 2022.

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