NEW DELHI (Reuters) - India agreed a deal with Russia to buy S-400 surface to air missile systems on Friday, the Kremlin said, as New Delhi disregarded U.S. warnings that such a purchase could trigger sanctions under U.S. law.

Although there was no public signing, the deal was sealed during President Vladimir Putin’s ongoing visit to New Delhi for an annual summit.

“The deal was signed on the fringes of the summit,” Kremlin spokesman Dmitry Peskov told Reuters. The contract is estimated to be worth more than $5 billion and gives the Indian military the ability to shoot down aircraft and missiles at unprecedented ranges.

But the United States has said countries trading with Russia’s defense and intelligence sectors would face automatic sanctions under a sweeping legislation called Countering America’s Adversaries Through Sanctions Act (CAATSA).

A State Department spokesperson said this week that the implementation of the sanctions act would be focused at countries acquiring weapons such as the S-400 missile batteries.

Last month, the United States imposed sanctions on China’s military for its purchase of combat fighters as well as the S-400 missile system it bought from Russia this year.

India is hoping that President Donald Trump’s administration will give it a waiver on the weapons systems which New Delhi sees as a deterrent against China’s bigger and superior military.

After summit talks between Putin and Modi, the two countries signed eight agreements covering space, nuclear energy and railways at a televised news conference. </s> NEW DELHI, Oct 5 (Reuters) - India agreed a deal with Russia to buy S-400 surface to air missile systems on Friday, the Kremlin said, as New Delhi disregarded U.S. warnings that such a purchase could trigger sanctions under U.S. law.

Although there was no public signing, the deal was sealed during President Vladimir Putin's ongoing visit to New Delhi for an annual summit.

"The deal was signed on the fringes of the summit," Kremlin spokesman Dmitry Peskov told Reuters. The contract is estimated to be worth more than $5 billion and gives the Indian military the ability to shoot down aircraft and missiles at unprecedented ranges.

But the United States has said countries trading with Russia's defence and intelligence sectors would face automatic sanctions under a sweeping legislation called Countering America´s Adversaries Through Sanctions Act (CAATSA).

A State Department spokesperson said this week that the implementation of the sanctions act would be focused at countries acquiring weapons such as the S-400 missile batteries.

Last month, the United States imposed sanctions on China's military for its purchase of combat fighters as well as the S-400 missile system it bought from Russia this year.

India is hoping that President Donald Trump's administration will give it a waiver on the weapons systems which New Delhi sees as a deterrent against China's bigger and superior military.

After summit talks between Putin and Modi, the two countries signed eight agreements covering space, nuclear energy and railways at a televised news conference. </s> Washington: The US has urged its allies to forgo transactions with Russia, warning that the S-400 missile defence system that India intends to buy would be a "focus area" for it to implement punitive sanctions against a nation undertaking "significant" business deals with the Russians.

The US administration is required under a domestic law, Countering America's Adversaries through Sanctions Act or CAATSA to impose sanctions on any country that has ?significant transactions? with Iran, North Korea or Russia.

The Act primarily deals with sanctions on Russian interests such as its oil and gas industry, defence and security sector, and financial institutions, in the backdrop of its military intervention in Ukraine and its alleged meddling in the 2016 US Presidential elections.

"We urge all of our allies and partners to forgo transactions with Russia that would trigger sanctions under CAATSA," a State Department Spokesperson said on Wednesday when asked about India's plan to purchase multi-billion S-400 missile defense system from Russia.

"The Administration has indicated that a focus area for the implementation of CAATSA Section 231 is new or qualitative upgrades in capability - including the S-400 air and missile defense system," the spokesperson said.

According to a media report, India and Russia will sign a deal for the multi-billion-dollar S-400 surface-to-air missile system this week.

Moscow has been negotiating to sell the S-400 long-range surface-to-air missiles to India for months.

The signing of the deal for Moscow's most advanced air defence system will be overseen by Russian president Vladimir Putin, who is visiting New Delhi on October 4-5 for the annual India-Russia summit, the report said quoting a top Kremlin official said.

"The President is trying to develop a relationship and change that, but we've not been successful, at least to date," US Secretary of State Mike Pompeo told NBC news in an interview.

In September, a senior administration official told reporters that purchase of major military system like multi-billion S-400 missile defense system would be considered as a "significant transaction and thus has a potential" for CAATSA sanctions.

The official emphasized that the ultimate target of these sanctions was Russia.

The CAATSA sanctions in this context are not intended to undermine the defence capabilities of any particular country.

"They are instead aimed at imposing costs upon Russia in response to its malign activities," the official had said. </s> NEW DELHI (Reuters) - India agreed a deal with Russia to buy S-400 surface to air missile systems on Friday, the two sides said, as New Delhi disregarded U.S. warnings that such a purchase could trigger sanctions under U.S. law.

Although there was no public signing, the deal was sealed during President Vladimir Putin’s ongoing visit to New Delhi for an annual summit with Indian Prime Minister Narendra Modi.

“The deal was signed on the fringes of the summit,” Kremlin spokesman Dmitry Peskov told Reuters. The contract is estimated to be worth more than $5 billion and gives the Indian military the ability to shoot down aircraft and missiles at unprecedented ranges.

The United States has said countries trading with Russia’s defence and intelligence sectors would face automatic sanctions under a sweeping legislation called Countering America’s Adversaries Through Sanctions Act (CAATSA).

A State Department spokesperson said this week that the implementation of the sanctions act would be focused at countries acquiring weapons such as the S-400 missile batteries.

Last month, the United States imposed sanctions on China’s military for its purchase of combat fighters as well as the S-400 missile system it bought from Russia this year.

India is hoping that President Donald Trump’s administration will give it a waiver on the weapons systems which New Delhi sees as a deterrent against China’s bigger and superior military.

“The (two) sides welcomed the conclusion of the contract for the supply of S-400 long range surface to air missile system to India,” India and Russia said in a joint statement at the end of the talks.

The two countries also signed eight agreements covering space, nuclear energy and railways at a televised news conference. “We always arrive to India with great pleasure as we know that we are surrounded here in the environment of very frank friendship, business cooperation,” Putin said.

Russia will also help India in its plans to mount a manned space mission by 2022.

“India gives the highest priority to ties with Russia, in fact in a changing world, our ties have become more important,” Modi said.

For all the warm words, ties with Moscow are a lot less central to Delhi than they were during the Cold War years, as India has diversified arms purchases, closing $15 billion of deals with the United States over the last decade. </s> India has signed a deal with Russia to acquire the S-400 air defence missile system, despite the possibility such a move could trigger US sanctions.

Indian Prime Minister Narendra Modi and Russian President Vladimir Putin announced the $5bn (£3.8bn) deal in Delhi on Friday.

The S-400 is one of the most sophisticated surface-to-air defence systems in the world. It has a range of 400km (248 miles) and can shoot down up to 80 targets simultaneously, aiming two missiles at each one.

India's neighbour China also has the same system - the two countries fought a war in 1962 and routinely see skirmishes on their border. So for India it was imperative to boost its defence capabilities - especially in view of a possible two-front conflict, with Pakistan and China.

Rajiv Nayan, defence expert at the Institute for Defence Studies and Analyses think-tank, believes India had to take "a calculated risk".

"India needs to look after its strategic interests. An air defence missile defence system was the need of the hour. The US has said that going ahead with the deal would attract sanctions - but Delhi cannot be seen coming under pressure," he told the BBC.

Relations between the US and Russia have been strained since Moscow annexed Crimea from Ukraine in 2014. Russia's alleged meddling in the 2016 American presidential elections has further fuelled tensions.

Washington has put several Russian firms under sanctions. The Countering America's Adversaries Through Sanctions Act (Caatsa) was introduced in 2017 to target Russia, Iran and North Korea with economic and political sanctions.

It also prohibits any country from signing defence deals with these nations.

But US President Donald Trump has the power to provide waivers to some countries. India was hoping to secure one, but recent statements from some Trump administration officials have sent mixed signals.

"I can't sit here and tell you that they [India] would be exempt, that we would use that waiver - that will be the decision of the president if he is faced with a major new platform and capability that India has acquired from Russia," Randall Schriver, assistant secretary of defence for Asian and Pacific security affairs, recently said.

Defence Secretary Jim Mattis and Secretary of State Mike Pompeo also failed to mention the waiver during their visit to Delhi in September.
• US sanctions on China over Russia weapons

The S-400 is an important boost to India's defence because its air force is facing a shortage of squadrons. tIts squadron strength has depleted to 31 - largely owing to ageing Russian aircraft. It would need 42 squadrons in the event of war with both China and Pakistan.

The new surface-to-air defence system will enable the air force to detect and destroy missiles. Mr Nayan says India already operates defence systems "manufactured by Russia and it make sense to continue with the systems we are familiar with".

Delhi's decision to go ahead with the deal also signals an attempt to inject a greater degree of balance in its foreign policy, according to Pratyush Rao, associate director for India and South Asia at Control Risks consultancy.

"After investing significant political capital in strengthening US-India ties during Barack Obama's presidency, Mr Modi is now seeking to calibrate relations with the US under the Trump administration.

"Given the high degree of unpredictability associated with the Trump administration, Delhi needed to hedge its bets," he said.
• Long-range surveillance radar tracks objects and relays information to command vehicle, which assesses potential targets
• Launch data are sent to the best placed launch vehicle and it releases surface-to-air missiles

Mr Trump recently described India as "tariff king" and said it wanted to have a trade deal with the US to keep him happy. The statement hasn't gone down well in Delhi's diplomatic circles.

It's not surprising that India has been trying to improve ties with powers like Russia and China in the new world order under Mr Trump.

India - which makes very few of its own weapons - is the world's biggest defence buyer, and Russia supplies most of its military equipment and spare parts.

"India had to assure Russia that it still values Moscow as an important defence and strategic partner and signing this deal was a demonstration of that," Mr Rao said.

He added that this was a "Catch-22 situation for Delhi with it having to walk the diplomatic tightrope between a trusted but waning partner [Russia] and a growing yet temperamental partner [US]".

Indian officials now hope that Washington will grant a waiver for Delhi.

Mr Nayan believes that backroom negotiations with Washington may result in such a move. But it may not be easy because the US has its own Catch-22 situation to deal with.

The US has been clear about sanctioning countries that sign defence deals with Russia. It sanctioned China for buying S-400s in September.

Nato ally Turkey is also in the process of acquiring the same system, and many believe that's a red line the US doesn't want Turkey to cross.

If the US allows India a waiver, others countries will press for similar concessions.

Meanwhile, Washington cannot afford to ignore India's increasing defence equipment requirements. It has increased its own arms exports to India more than five times in the past five years, taking its share in Delhi's defence procurement to 15%.

"Having painstakingly built up the defence partnership, Washington would want to insulate it's burgeoning defence trade with India through some kind of a solution," Mr Rao says.

Mr Modi's administration is also likely to try to defuse tensions. He will seek re-election next year and will not want a new controversy that could affect his campaign.

"If the US imposes sanctions on India, it will give more ammunition to India's opposition parties ahead of the elections. It will open Mr Modi to further attacks over his management of foreign policy coming days after perceived flip-flops on holding talks with Pakistan," Mr Rao added

Mr Modi is already under fire from the opposition because of the controversial Rafale jet deal.

He signed a government-to-government deal with France in 2016 to buy 36 Rafale warplanes manufactured by Dassault Aviation. Rahul Gandhi, the leader of the main opposition Congress party, has alleged that Mr Modi "favoured" an Indian company that is part of the French deal.

Mr Modi's ministers have denied the allegation, but the issue continues to dominate headlines in India.

Both Mr Modi and Mr Trump have reasons to avoid falling out. The big question now is whether Mr Trump will see it Mr Modi's way. </s> The United States has warned India against its plan of purchasing S-400 air defence systems from Russia when President Vladimir Putin visits New Delhi for a bilateral summit on Thursday, reported Reuters. The commercial negotiations for the deal, estimated to be around Rs 37,000 crore, concluded in May.

Under new US laws, countries that sign deals with Russian defence or intelligence sectors can face secondary sanctions. President Donald Trump signed the Countering America’s Adversaries Through Sanctions Act into law in August 2017, and it came into effect in 2018. It aimed to punish Russia for its alleged interference in the 2016 US presidential elections and the 2014 annexation of Crimea from Ukraine, among other things.

“We urge all of our allies and partners to forgo transactions with Russia that would trigger sanctions under the CAATSA,” a US State Department official said. “The administration has indicated that a focus area for the implementation of CAATSA Section 231 is new or qualitative upgrades in capability – including the S-400 air and missile defence system.”

However, United States Secretary of State Mike Pompeo had earlier said that discussions were on whether to grant India waivers from US sanctions on Russia and Iran. He had said that Washington did not aim to “penalise great strategic partners like India”.

Last month, the US imposed sanctions on China after its military bought fighter jets and missile systems from Russia. Moscow said that these sanctions undermined global stability. “It would be good for them to remember there is such a concept as global stability which they are thoughtlessly undermining by whipping up tensions in Russian-American ties,” Deputy Foreign Minister Sergei Ryabkov had said. “Playing with fire is silly, it can become dangerous.” </s> The S-400 Triumph air defence system integrates a multifunction radar, autonomous detection and targeting systems, anti-aircraft missile systems, launchers, and command and control centre.

With the signing of this deal, India is now at risk of sanctions from the US under the contentious CAATSA act. The US has threatened countries with sanction s if they deal with with Russia in defence matters.

[S-400 missile deal: Will India be granted waiver from CAATSA?]

Modi and Putin earlier today met for the 19th India-Russia annual bilateral summit during which they deliberated on a host of bilateral, regional and global issues. The summit began at Hyderabad House here this morning.

"A relationship radiating warmth and affection! PM @narendramodi welcomed @KremlinRussia_E Vladimir Putin for the 19th India-Russia Annual Bilateral Summit continuing the series of fruitful engagements this year!" Ministry of External Affairs spokesperson Raveesh Kumar tweeted along with a picture of the two leaders at Hyderabad House.

Putin had a one-on-one meeting with the prime minister after his arrival here on Thursday evening. Modi had hosted a private dinner for the visiting dignitary. The Russian president, who leaves on Friday evening, is accompanied by a high-level delegation, including Deputy Prime Minister Yuri Borisov, Foreign Minister Sergey Lavrov and Trade and Industry Minister Denis Manturov. (Image courtesy - ANI/Twitter)

Russian President Vladimir Putin arrived in Delhi on Thursday on a two-day visit to hold the annual bilateral summit with Prime Minister Narendra Modi. The main focus of the visit is in fact the signing of the USD 5 billion worth deal to purchase S-400 Triumf air defence missile systems from Russia which will significantly bolster India's defence capabilities. (Image - ANI/Twitter) </s> India on Friday hammered out a Rs 39,000-crore deal for five S-400 Triumf air defence missile systems with Russia during the annual summit between the two countries led by Prime Minister Narendra Modi and visiting President Vlamidir Putin. The deal has been inked despite concerns flagged by the US, which has slapped sanctions on Russia, about the purchase of the missile systems capable of knocking down jets, missiles and unmanned aerial vehicles at a range of 400km. New Delhi is seeking a sanctions waiver, given that Russian-origin weaponry is in widespread use in the Indian armed forces.

The two sides “welcomed the conclusion of the contract for the supply of the S-400 long-range surface-to-air missile system to India,” said a detailed joint statement issued after the two leaders met for the 19th edition of the summit.

The US passed the Countering America’s Adversaries Through Sanctions Act earlier this year, and said countries trading with Russia’s defence and intelligence sectors would face automatic sanctions under the sweeping legislation.

State Department spokesperson said this week that the implementation of the sanctions act would be focused at countries acquiring weapons such as the S-400 missile batteries. Last month, the United States imposed sanctions on China’s military for its purchase of combat fighters as well as the S-400 missile system it bought from Russia this year.

After Friday’s landmark deal was signed, the US embassy said the sanctions were aimed at punishing Russia and not to damage the military capabilities of its allies, indicating that India would be spared from the sanctions.

The 68-point India-Russia statement covered cooperation and partnership in the military, energy, space, economy and science and technology spheres.

“India gives top priority to its relations with Russia. In this rapidly changing world our relations have become more relevant,” PM Modi said. The long-awaited S-400 deal further strengthens Russia’s position as the top exporter of weapons to India. Russia accounted for 62% of India’s arms imports during 2013–17. The S-400 deliveries are expected to begin in two years. Indian Air Force chief BS Dhanoa said on Wednesday that the S-400 systems would be a booster dose for the IAF that is grappling with shrinking combat capabilities.

“The sides reaffirmed their commitment to enhance military technical cooperation between India and Russia, which have a long history of mutual trust and mutual benefit. Both sides expressed satisfaction at the significant progress made on the ongoing projects of military technical cooperation and recognized the positive shift towards joint research and joint production of military technical equipment,” the statement said, noting that military and military-technical cooperation between the two countries was an important pillar of their strategic partnership.

The next meeting of the Indian-Russian Intergovernmental Commission on Military-Technical cooperation to bolster bilateral ties will be held in December.

The two sides signed eight agreements including an action plan for prioritisation and implementation of cooperation in the nuclear sector and a memorandum of understanding (MoU) between the Indian Space Research Organisation (ISRO) and the Federal Space Agency of Russia ROSCOSMOS for cooperation in the human spaceflight programme.

“The next goal in our space journey is to send an Indian astronaut in Gaganyaan. I am very happy that you have assured full cooperation of Russia in this mission,” Modi said. Gaganyaan is an orbital spacecraft that will form the basis of India’s human spaceflight initiative.

Pacts were also inked for cooperation between Indian and Russian railways and for collaboration in the micro, small and medium enterprises sectors.

Stepping up energy cooperation was discussed extensively, including possibilities of collaboration on hydel and renewable energy. “The sides noted the importance of further widening of energy cooperation between India and Russia taking into account the Indian side’s interest in Russian energy assets, including natural gas, as well as in implementation of prospective joint projects in the field of renewable energy sources,” the statement said. </s> NEW DELHI: As India and Russia prepare tosystem on Friday, New Delhi is playing the greatest balancing act of all — its defence needs and a strategic relationship with Russia with sanctions and a growing strategic relationship with US. It wasn't this bad even during the Cold War, when despite cries of non-alignment, India was squarely on the Russian side of the field.Vladimir Putin landed in Delhi on Thursday evening and drove straight to a dinner with Prime Minister Narendra Modi. The official programme begins Friday morning with a breakfast followed by delegation level talks. A large number of agreements are expected to be signed, which is normal for India-Russia summits.All eyes will be on the defence, frigates and assault rifles. The US only last week slapped sanctions on China for buying the same S-400s.Putin's visit comes almost exactly a month after the first 2+2 dialogue with the US, where James Mattis and Mike Pompeo discussed exactly this scenario with Nirmala Sitharaman and Sushma Swaraj. India made it clear it needed the S-400 and had a long legacy of sourcing defence equipment from Russia, which New Delhi was unwilling to compromise. The US side reassured New Delhi that the CAATSA law (Countering America's Adversaries through Sanctions Act) would not apply to legacy platforms or spares, but new buys could be impacted.What is less known is that Mattis and Pompeo spent over an hour with NSA Ajit Doval for a deeper conversation on two contentious issues — imports of Iranian oil post sanctions that will kick in from November 4, and the S-400 from Russia. Details of the meeting are not known, but sources said both sides emerged with a better understanding of each other.The Trump administration however, still has to certify to Congress that India is reducing its weapons buys from Russia. That is a condition for a waiver on CAATSA, a provision written into the otherwise inflexible law by sustained diplomacy by the Trump administration. The waiver provision will be available to India, Indonesia and Vietnam. But, as Randy Shriver, US undersecretary in the Pentagon said, India should not treat this as a blanket waiver.“We urge all of our allies and partners to forgo transactions with Russia that would trigger sanctions under CAATSA,” a State Department spokesperson said on Wednesday when asked about India's plan to purchase multi-billion S-400 missile defence system from Russia. “The Administration has indicated that a focus area for the implementation of CAATSA Section 231 is new or qualitative upgrades in capability - including the S-400 air and missile defence system,” the spokesperson said.India is in a slightly difficult place — the US relationship is vital for India to balance China and its aggressive growth. It's also the economic partner of choice for Indian industry. Russia however remains an old partner, with a huge piece of the Indian defence pie. But its closeness to China is a problem that India is very uncomfortable about.India has been reducing its weapons buys from Russia. But India does not want to ditch the deep partnership with Russia. In fact, India has increased its investments in Russia's energy sector, oil minister Dharmendra Pradhan officially asking Russia to partner in India's effort to gassify its economy.Russia is also opposed to India' Indo-Pacific policy, and has unequivocally opposed it, preferring to describe the region as Asia-Pacific, because of its's anti-China connotations.Russia enjoys support from across the political spectrum — for instance, Sonia Gandhi, head of the opposition UPA, who doesn't travel too much, went out of her way to travel to St Petersburg recently for a women's conference. If this was in the US or in the bigger European countries, it would have been politically controversial. </s> The United States said that the intent to slap sanctions on Russia was to impose costs for its 'malign behaviour'.

The US also made it clear that any waiver will be considered on a transaction-by-transaction basis, adding it cannot prejudge any sanctions decisions. (Photo: AP)

New Delhi: In a guarded reaction, the United States on Friday said its intent to slap sanctions against Russia was not aimed at imposing damage to the military capabilities of its "allies or partners," shortly after India concluded a deal for purchase of S-400 missile defence system from Russia.

Stating that the intent to slap sanctions on Russia was to impose costs for its "malign behaviour", the US also made it clear that any waiver will be considered on a transaction-by-transaction basis, adding it cannot prejudge any sanctions decisions.

Responding to a query on impact of anti-Russia sanctions on India after the conclusion of the S-400 contract, the US embassy spokesperson said, "Waivers of the Countering America's Adversaries Through Sanctions Act (CAATSA) section 231 will be considered on a transaction-by-transaction basis. We cannot prejudge any sanctions decisions."

"The intent of our implementation of CAATSA is to impose costs on Russia for its malign behavior, including by stopping the flow of money to Russia's defence sector. CAATSA is not intended to impose damage to the military capabilities of our allies or partners," the spokesperson added.

However, the spokesperson said, "the waiver authority is not for a blanket waiver. It is transaction-specific. There are strict criteria for considering a waiver."

The US reaction came after India and Russia concluded the USD 5 billion S-400 air defence system deal, notwithstanding the US warning that the deal would be a "focus area" for it to implement punitive sanctions against a nation undertaking "significant" business deals with the Russians.

Also Read: Deal done: India signs up for Russia S-400 missile system amid US threat

The deal was concluded during the visit of Russian President Vladimir Putin for the annual summit with Prime Minister Narendra Modi on Friday.
India buys the S-400 missile system, potentially facing CAATSA U.S. sanctions.