India, Russia seek to skirt US threat to arms deals

India and Russia have agreed on a new payment method through their national currencies for multi-billion-dollar defense deals, in a bid to avoid risks created by the US threat of sanctions and banking restrictions.

While the new mechanism potentially opens the way for releasing billions of dollars in contract payments to Russia, it may still be dependent on India winning agreement from US President Donald Trump not to impose sanctions in retaliation. An increasingly important US partner, India also has long-time strategic ties with Moscow dating back to the Soviet era in the Cold War. Despite the decline in sales, Russia accounted for 58% of the south Asian nation’s arms imports from 2014-18.