Ignoring the threat of economic sanctions from the US, India has formally contracted a multi-billion deal with Russia for sourcing S-400 long-range missile systems which prompted the US Embassy in India to warn that a blanket waiver against sanctions was ruled out.

“The sides welcomed the conclusion of the contract for the supply of the S-400 long range surface-to-air missile system to India,” according to a joint statement released following Prime Minister Narendra Modi's bilateral meeting with Russian President Vladimir Putin on Friday.

The two sides also signed eight pacts, including ones on nuclear energy, railways and cooperation on India’s ambitious human space mission project Gaganyaan.

Interestingly, neither Modi nor Putin mentioned the S-400 deal, estimated at over $5 billion, in their remarks to the media following their meeting.

The US, however, was quick to react to the deal making it clear that it could not guarantee a waiver to India from sanctions at this point of time. “The waiver authority is not for a blanket waiver….There are strict criteria for considering a waiver. Waivers of CAATSA section 231 will be considered on a transaction-by-transaction basis,” the spokesperson from the US Embassy said.

US officials had earlier warned that the government could impose sanctions under the Countering America's Adversaries through Sanctions Act or CAATSA legislation, which deals primarily with countries having “significant transactions” with Russia, North Korea or Iran, and there were speculations on whether India would actually go ahead with the S-400 deal.

S-400 is Russia’s most advanced long-range surface-to-air missile defence system and would help India tighten its air defence mechanism, particularly along the nearly 4,000-km-long China-India border.

“The US says that it decides on waivers on the basis of transactions. India has carried out a transaction with Russia. Now let them decide whether we should get a waiver,” a government official told BusinessLine .

Addressing business delegates from both countries, Putin said with a target of increasing trade to over $25 billion (from the current $10.5 billion) and investments to $30 billion by 2025, the governments had decided to work on easing customs and administrative rules that was hindering flow of goods and services.

The Russian President was upbeat on the cooperation between the two countries in the area of oil and energy, especially with Russian oil major Gazprom supplying natural gas to India. He said that there was a lot of scope for joint investments, especially in projects in the Arctic region.

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