India has stopped paying Rosoboronexport since April

India can not pay for Russian weapons in US dollars because of sanctions. Officials are working out options for clearing payments in rupees.
Payments from India on the majority of arms contracts with Russia have not been received since April 2018, the manager of the defense industry enterprise and a man close to Rosoboronexport told Vedomosti. This is due to sanctions imposed in accordance with the American CAATSA law against Rosoboronexport, which threaten the so-called secondary sanctions to its counterparts, the source close to Rosoboronexport explains. The fact that India's payments for military supplies from Russia stopped in April, the Indian newspaper The Economic Times reported in June.

The presence of sanctions caused by sanctions with payments for arms contracts was recognized by Russian officials as early as 2014, when the West introduced the first anti-Russian sanctions. Last Tuesday, the general director of Rosoboronexport Alexander Mikheev said at the forum "Army" in the Moscow region of Kubinka that due to US sanctions the state intermediary began using alternative currencies in settlements with his clients. "We are considering the possibility of settlements in national currencies - Indian rupees, Chinese yuan, dirhams (currency in a number of Arab countries, including the UAE - Vedomosti), as well as rubles," Mikheyev said (quoted by Interfax). "Our partners are sympathetic to this situation, since the sanctions are directed not only against Russian organizations, including Rosoboronexport, but also against our partners," he added.

According to a person close to the Russian government, in April delays actually began to be paid by Indian counterparts against Russian companies that were under sanctions. This was due to the fact that Indian banks were afraid to please under the secondary sanctions of the United States. But now, according to the Indian press, new options are being developed - clearing settlements and payments through the currencies of other countries - that formally withdraw Indian banks from under attack. True, these schemes may not be needed, since the recently approved law on the US military budget for 2019 contains a provision that allows the president to temporarily withdraw India from the CAATSA law. Most likely, this issue will be discussed at the meeting of the ministers of defense and foreign affairs of the United States and India, scheduled for September.

According to the expert of the Center for Analysis of Strategies and Technologies Konstantin Makienko, since 2012 there have been no major contracts with India, and in January 2017 representatives of Rosoboronexport said that the current portfolio of contracts with Delhi is about $ 4 billion, less than 10% of the total order portfolio. Since that moment there have not been any major contracts, so now this amount is probably much lower. At the same time, it can not be ruled out that by the end of the year - perhaps during the expected visit of Vladimir Putin to India (the fact that he was trained in July by presidential aide Yuri Ushakov confirmed to journalists) - major contracts for S-400 surface-to-air missile systems, frigates of the project 11356 and helicopters Mi-17. In the 2000s. India was one of the largest, and in 2007-2015. - the largest importer of Russian weapons, says Makienko.

The problem of Russian-Indian payments in the sphere of military-technical cooperation is actively discussed at different levels and should be resolved for Putin's visit, without it signing new contracts does not make sense, says the manager of the defense industry enterprise. According to him, there are similar problems with a number of other countries, but, for example, China is not among them.