India and Russia agreed to strengthen defense cooperation as military supplies to the South Asian nation have stalled for want of a payment mechanism that doesn’t violate US sanctions.
(Bloomberg) — India and Russia agreed to strengthen defense cooperation as military supplies to the South Asian nation have stalled for want of a payment mechanism that doesn’t violate US sanctions.
The two countries discussed “wide-ranging bilateral defense cooperation, including military-to-military ties and partnerships,” according to a statement issued after India’s Defense Minister Rajnath Singh met his Russian counterpart Sergei K. Shoigu on the sidelines of a defense ministers meeting at the Shanghai Cooperation Organisation in New Delhi on Friday.
The two countries “reiterated their commitment” to strengthen their “partnership,” the statement said. Russian industry partnering with its Indian counterparts also figured in the discussion between the two defense ministers.
The meeting comes as Russia halted deliveries of military supplies to India because of the payment conundrum. Indian payments for weapons amounting to more than $2 billion have been stuck for about a year.
India is unable to settle the bill in US dollars due to concerns about secondary sanctions, while Russia remains unwilling to accept rupees due to exchange-rate volatility. New Delhi also doesn’t want to complete the deal in Russian rubles due to concerns about being able to purchase enough on the open market at a fair rate.
Russia remains India’s largest supplier of weapons and military hardware, though purchases have slowed by 19% in the last five years due to sanctions and increased competition from other countries.
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Addressing the SCO member states just before the bilateral meeting, Singh, who hosted the event, sought cooperation on countering terrorism and added the need for bolstering trust among members, according to another statement. New Delhi has repeatedly accused Islamabad of helping terror groups to carry out attacks in India and the region. Pakistan strenuously denies the allegations.
“If we want to make the SCO a stronger & more credible international organization, our top-most priority should be to effectively deal with terrorism,” Singh said in the statement. “If a nation shelters terrorists, it not only poses a threat to others, but for itself too.”
China-founded SCO to counter the US-led global system.
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