Russia and India are working out a rupee-rouble payments transfer for the $5-billion dollar S-400 Triumf air defence system deal as the US sanctions on Russia remain a major obstacle in the way.

Speaking to a select group of journalists at Aero India 2019 in Bengaluru, Anatoly G. Punchuk, deputy director of Russian Federal Service for Military-Technical Cooperation, said, “Dollar is no longer the universal currency for trade in defence.”

Punchuk said it was decided by both India and Russia to make the payments in local currency for the S-400 deal.

S-400 is known as Russia’s most advanced long-range surface-to-air missile defence system that can take out targets over 350km away.

However, sources remained tight-lipped about the modes of payment that are being pursued for the deal.

Both India and Russia have in the past said US sanctions won’t affect the delivery schedule of the game-changing air defence system — its first regiment is scheduled to be delivered in October 2020.

US sanctions prevent financial institutions from dealing with Russian military firms and this has been an issue for the government of both countries.

While both countries have decided to make payments in local currencies for the S-400 deal, it will not be the default option for future deals with Russia, said Punchuk, adding that both sides will discuss each deal and payment process separately.

“No, every deal is unique but this is a successful model and we have seen it in the past too,” said Punchuk.

“What is important is that the transaction system needs to be operationalised because transaction in national currency is a two-way street,” he said.

This will help Russia “fulfill its obligations”, added Punchuk.

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