/INDIA: Russian Weapon Sales To India Stall Amid Risk Of U.S. Sanctions-BBG

Bloomberg runs a source report noting that the deliveries of Russian military supplies to India have "ground to a halt" as the two sides are struggling to find a payment mechanism that would circumvent U.S. sanctions.

• The wire notes that Indian payments for around $2bn worth of weapons have been halted for about a year, while Russia has stopped supplying credit for about $10bn worth of spare parts and two yet undelivered S-400 missile-defence system batteries.
• "India is unable to settle the bill in U.S. dollars due to concerns about secondary sanctions, while Russia remains unwilling to accept rupees due to exchange-rate volatility (...) New Delhi also doesn't want to complete the deal in Russian roubles due to concerns about being able to purchase enough on the open market at a fair rate."
• Russia has been India's key security partner for decades and the largest provided of weapons to New Delhi needed to deter geopolitical threats from Pakistan and China. However, their relationship has come under severe pressure following Moscow's invasion of Ukraine.
• The Indian Air Force last month gave the first open indication that Russia is no longer a a reliable arms supplier, noting as much in a parliamentary testimony. In addition, Russia's position as India's top weapons supplied has already been eroding before the war, with the Stockholm International Peace Research Institute (SIPRI) noting that between 2017-2022 New Delhi reduced its purchases by 37% amid "strong competition from other supplier states" and "increased Indian arms production."