As the Ukraine war grinds on, Russia, India seek ways to keep defence trade afloat Premium

India’s total imports from Russia rose by five times from $8.5 billion in April 2022 to $41.6 billion in February 2023, driven mainly by oil supplies

A year after the Ukraine war began, there are growing speculations about the ability of Russia, hit by heavy western sanctions and faced with dwindling exports, to continue tosupply defence systems to India, one of its most important defence customers. Such concerns are largely rooted in payment problems that India and Russia are yet to resolve, according to sources in the Russian government, defence, and banking sectors. However, experts believe the setbacks that Russian defence exports face due to sanctions could be outweighed by advantages Moscow may have once the war is over. 

There were media reports last month that India may not get the delivery of the two remaining S-400 Triumf missile defence systems that it had ordered in 2018 for around $5.4 billion. The reports cited the 34th Report of the Standing Committee on Defence (2022-23), presented in the Lok Sabha on March 21, where a representative of the Air Force suggested that the sharp decline in the budget estimate for the fiscal year was related to “some of our deliveries not taking place”. 

Also read | Russian arms supplies to India worth $13 billion in past 5 year: Reports

Russian officials refuted the media reports. “Russian-Indian defence cooperation is developing steadily in accordance with previously reached agreements and signed documents,” said the Federal Service for Military-Technical Cooperation (FSVTS), which oversees military-technical cooperation with foreign countries.

When  The Hindu approached, the FSVTS, state-owned defence manufacturer Rostec, its agency for exports and imports of defence-related items Rosoboronexport and Concern VKO Almaz-Antey, the maker of S-400 systems, all refused to provide any additional comments and referred to the March statement. The Russian embassy in New Delhi, too, said there is nothing more to add at this point.

Off the record, however, officials admit payment remains an issue when it comes to trade with India.

Russia is currently fulfilling several major contracts previously signed with India, including, the S-400 systems and two Project 11356 frigates. There are more deals on the plate, including procurement of additional and modernisation of existing Sukhoi Su-30 MKI and upgrade of MIG-29s, where no final terms have been achieved. Several commenters suggested that such contracts will not be signed till the Ukraine conflict is over.