In order to bypass the threat of US sanctions for purchase of military hardware, the Indian government is likely to make its payments for Russian arms in euros to a Russia-nominated bank, The Economic Times reported, citing sources.
Earlier, India used the rupee-rouble route to carry out the existing defence transactions, said the report, adding that Russia’s VTB bank has agreed for the said euro transactions, that would dodge the sanctions for the military hardware purchases, which include S-400 air defence missile system.
According to the report, India has to pay over $4 billion to Russia this year, with the biggest contract being that of the S-400 system, followed by the Chakra III submarine lease and procurement of four frigates for the Indian Navy.
Russia-based VTB Bank is open to opening a European account. The Indian bank selected for the transaction of payment will have the least exposure to the US dollar, the report added.
Earlier, VTB Bank had processed over $12 billion investment into the Essar Group, saving it from bankruptcy.
Source: CNBC
Image Courtesy: Hans India
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