Chinmaya IAS Academy – Current Affairs Chinmaya IAS Academy – Current Affairs
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Ahead of the bilateral summit between Prime Minister Narendra Modi and Russian President Vladimir Putin later this week, discussions are “still under way” between the two sides to conclude a final deal for 200 Kamov-226T utility helicopters. “Having also received feedback from the Ministry of Defence (MoD) of India, we responded to a Request For Proposal (RFP) sent by the MoD to the joint venture in August 2018. Negotiations are still under way,” Rosoboronexport said in an e-mail response to questions from The Hindu . Rosoboronexport said the timing of the signing of the contract depends on the “decisions and answers” of the Defence Ministry. A defence official said there were “still some procedures to be completed” before it can be signed. India and Russia have already concluded an Inter-Governmental Agreement (IGA) for 200 helicopters estimated to cost over $1 billion. Under the deal, 60 helicopters will be imported from Russia and at least another 140 will be built in India by Hindustan Aeronautics Limited (HAL) with technology transfer. As part of this, a joint venture was set up in India which will build the helicopters. S-400 systems However, the big focus during Mr. Putin’s visit on October 4-5 is the proposed Rs. 39,000-crore deal for five S-400 air defence systems as the prospect of U.S. sanctions looms large with U.S. officials warning against it. Officials said the process to conclude a deal is almost complete but remain tight-lipped if the deal would be signed during the summit. Several officials have stated on various occasions that India would go ahead with the deal and it was for the U.S. to find a way around the Countering America’s Adversaries Through Sanctions Act (CAATSA) to avoid sanctions. India has decided to drop the offset clause for the deal though it was Russia which did not want offsets initially. “They [Russia] agreed for offsets later, but we decided not to include them as it would drive up the cost and delay deliveries,” a defence official said. In October 2016, the two countries concluded IGA for five S-400 systems and four stealth frigates after which the negotiations began to conclude a commercial contract. Threat of sanctions With the friction in relations between the U.S. and Russia, the S-400 has become a major point of friction. Several countries, including some U.S. allies, have expressed interest or are acquiring the system and Washington has threatened them with sanctions. Early this month, the Trump administration imposed sanctions on some entities and individuals in China as it recently acquired Su-35 fighter jets and S-400 systems.
