Russian arms sales boom in face of prickly ties, possible sanctions

Russia was India's biggest supplier from 2014-18; deals worth $15 billion more in pipeline

Defence business between Russia and India is booming, with contracts worth over $15 billion in the pipeline. This is despite rising strategic friction between Moscow and New Delhi, and the threat of US sanctioning India for defence ties with Russia.

On Monday, the Stockholm International Peace Research Organisation reported that Russia was India’s biggest arms supplier from 2014-18, accounting for 58 per cent of all India’s defence exports. And this is set to continue.

On Friday, India signed an estimated $3 billion contract with Russia leasing a Russian nuclear attack submarine (SSN) for ten years, starting 2025. Five days earlier, Prime Minister Narendra Modi inaugurated a factory that will manufacture at least 750,000 AK-203 Kalashnikov rifles for the Indian Army, worth another billion dollars. In October, the ministry of defence (MoD) announced a contract to build two Krivak-III class frigates in Goa Shipyard. Two more Krivak-III frigates are coming fully built from Russia as part of the four-ship procurement, estimated to be worth $3 billion.

The Indian Air Force (IAF) is also buying Russian. In October, it inked a $5.43 billion contract for five S-400 Triumf air defence units. Last month, Business Standard reported the IAF’s interest in buying and upgrading 21 MiG-29 fighters lying unused in Russia for about a billion dollars. The IAF has also mooted a new contract to build 18 Sukhoi-30MKI fighters in Hindustan Aeronautics Ltd (HAL) for over $800 million. And HAL and Russian Helicopters have tied up to build 200 Kamov 226T light helicopters in India, worth about $2 billion.

These big-ticket contracts, worth over $15 billion exclude India’s large annual outgo on maintenance, spares, overhaul and upgrade of its existing Russian platforms. Nor do they include other procurements in the pipeline, such as the “very short range air defence system” (VSHORADS), where a Russian vendor has emerged the lowest bidders, but has not yet been awarded a contract. 

Despite this thriving defence trade, New Delhi and Moscow have an increasingly prickly relationship. Russia provided only qualified support after the IAF struck a Jaish-e-Mohammed camp in Balakot, Pakistan on February 26. Earlier, Russia had condemned the February 14 suicide bombing in Pulwama that killed 40 Indian security men, stating that “those who ordered it and carried it out” should be “duly punished”. Moscow also affirmed “unwavering support” for India’s “uncompromising fight against terrorism”, omitting, however, to mention Pakistan as the Jaish’s home.

Russia further nuanced its line after the Balakot strike, expressing “grave concern” over the “escalating situation” along the Line of Control (LoC) between India and Pakistan “which are Russia’s friends.” New Delhi has noted this unusual equivalence.

The day after Balakot, when Indian foreign minister Sushma Swaraj met her Russian counterpart, Sergey Lavrov, on the sidelines of a Russia-India-China (RIC) foreign ministers’ meeting, the Russian Ministry of Foreign Affairs (MFA) “expressed hope for a de-escalation” of the situation. On March 28, the MFA referred to “dangerous manoeuvres” along the LoC, urged restraint and offered counter-terrorism support to both countries. Here again, Moscow placed India and Pakistan on par.

Given New Delhi’s longstanding antipathy to international mediation on Kashmir, its feathers were most ruffled by Moscow’s offer to mediate in the crisis. On March 1, after a telephone call between Lavrov and Pakistani Foreign Minister Shah Mehmood Qureshi, Moscow expressed “readiness to promote the de-escalation of tensions”.

Indian foreign policy experts ascribe Russia’s new even-handedness, even deference to Islamabad, as stemming from Moscow’s wish to play a central role in an Afghan settlement with the Taliban.

Towards this, Russia’s defence ministry last month announced the supply of a “small” number of Mi-35 attack helicopters to Pakistan. This supplemented four Mi-35s supplied in 2016-17 – the first combat platforms Russia sold to Pakistan since the Treaty of Friendship and Cooperation with India in 1971.

Then, in Vietnam last month, Lavrov dismissed the Indo-Pacific concept as an American ruse “to get India involved” in balancing China. He indicated that this was an artificial construct to align India with Japan, “which has no love lost for India”.

Even so, Defence Minister Nirmala Sitharaman attended a Russian briefing on the new MiG-35 at the Aero India 2019 show in Bengaluru last month. Ministry insiders say there is little chance of the MiG-35 winning a tenderfor 114 medium fighters for the IAF, or the navy’s tender for 57 multi-role carrier borne fighters.

However, Russia remains a strong contender in the navy’s Project 75-I tender for six conventional submarines for an estimated $4-5 billion. 

Arms purchases from Russia render New Delhi vulnerable to sanctions under an American law passed in 2017 – called “Countering America’s Adver­saries Through Sanctions Act” (CAATSA). This mandates sanctions against countries that engage in “significant transactions” with Russian, Iranian and North Korean defence and intelligence entities. President Donald Trump is em­p­owered to waive these sanctions, but Washington sources say waivers would be given only in exceptional cases.