21:58 GMT +318 November 2019
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    India's Finance and Defence Minister Arun Jaitley arrives to attend a two-day meeting of the Goods and Services Tax (GST) Council, comprising federal and state finance ministers, in Srinagar May 18, 2017

    India Clears Law to Protect Indo-Russian Defense Projects From Western Sanctions

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    India has approved a special arrangement to protect Indo-Russian defense projects from western sanctions. It is the continuation of a statement made by Indian Defense Minister Arun Jaitley where he trashed reports that said the $10 billion defense deal with Russia would be hampered by US sanctions.

    New Delhi (Sputnik) — Under the arrangement, the Indian finance ministry has waived off banking guarantee clause which is mandatory for securing defense contracts in India. In place of the bank guarantee, the Indian government has accepted a sovereign guarantee from Russia.

    The first project taken under this arrangement will be the $800 million contract of refitting four Kilo class submarines. Refit work of Kilo class submarine Sindhuraj is expected to begin from August this year while another Kilo class INS Sindhukesari is undergoing a similar refit since last year.

    "Capital procurement of defense equipment is carried out as per provisions of the Defense Procurement Procedure (DPP). In accordance with the extant DPP, in cases involving expenditure above $3 million (Rs 20 crore), Indian and foreign vendors are required to sign a pre-contract integrity pact and have to furnish an integrity pact bank guarantee for a stipulated amount from an Indian public sector bank, along with the commercial bid. This requirement does not apply to certain categories of capital procurements, including those from certain Russian government agencies," said Jaitley in Parliament in March this year.

    In October 2015, India and Russia agreed on defense contracts worth more than $10 billion, including the purchase of S-400 Triumf air defense systems and four stealth frigates. On Friday, Russian Deputy Prime Minister Dmitry Rogozin said India is planning to buy several regiment sets of Russia's advanced S-400 air defense systems and both countries are in talks on the exact volume of supplies, and other details with regard to the delivery of S-400 systems to India.

     

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    anti-Russian sanctions, Arun Jaitley, Russia, India
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