Ukraine crisis: India examines exposure to Russian arms
The defence ministry is conducting an in-depth assessment of ongoing contracts of the Army, Air Force and Navy with Russian entities amid indications that payments and supplies may face delay in the short term due to the Ukrainian crisis.
Those aware of details told ET that the Department of Military Affairs (DMA) has collated information from all three services to understand the dependency on Russian suppliers and payments that are due to be made for both new weapon systems and spares. The immediate as well as six month impact of the crisis is being examined.
The move comes as Moscow is facing severe financial sanctions from the western world, making Indian banks jittery in processing even scheduled payments to Russian arms companies. Sources said that bulk of the information has already been collected and is being analysed at the highest level.
A meeting of top defence ministry officials took place this week on the matter as there are serious concerns on meeting payment schedules. Over the last week, some scheduled transactions to Russian defence entities were stalled after financial sanctions were announced.
Among the three forces, the Air Force has the highest dependency on Russian spares and supplies as the bulk of its fighter fleet consists of the Su 30MKI, MiG 29 and MiG 21 fighter jets. While the Su 30MKIs are assembled in India, they are still dependent on regular supply of spares from Russian companies.
War reserves and stocks are available for the short-term.
The Navy too had considerable exposure to Russian companies for maintaining its warship fleet while the mainstay of the Army’s armoured corps is of Russian origin. By one estimate, the annual outgo for spares and parts from Russia for the armed forces is in excess of $500 million. This does not include payments for other major purchases underway that include the S 400 anti air system, AK 203 assault rifles and advanced Krivak class frigates.
As reported by ET, Russia has assured India that defence supplies will not be hit by the western sanctions and that alternative mechanisms are in place to ensure continuity. Denis Alipov, the Russian ambassador-designate, had said that mechanisms exist for bilateral defence trade but much will depend on the readiness of Indian partners to continue doing business. “Much will depend on the readiness of Indian partners to continue business because some of them are overcautious as regards to their exposure to the US and European markets,” he said.
Among steps taken by the defence ministry in the wake of the Ukrainian crisis is the postponement of the flagship military industry show DefExpo 2022 in which Russia was to be a major participant.