India, Russia Boost Defence Ties With Local Manufacturing

• Russia to jointly manufacture military hardware and spares in India, with co-development of advanced defence systems
• Strengthening bilateral trade using national currencies and exploring interoperable payment systems
• Ensuring long-term fertiliser supply and exploring joint ventures for mutual benefit

Following a summit, Russia has agreed to develop a programme to manufacture military equipment and spare parts in India. This will enable Russian weapons and defence systems to be maintained by Indian armed forces for Russian-made procurement. Strengthening all aspects of defence cooperation was an essential component of talks between Prime Minister Modi and President Putin.

Indian Armed Forces have raised numerous concerns about delays in receiving spare parts and critical equipment from Russia, which have created issues with maintaining the operational readiness of Russian-produced military systems acquired by India.

In addition to the establishment of defence partnerships, both nations also agreed to work together to create new ventures that will satisfy Indian armed forces' needs and position to make them available for sale to other friendly nations.

The joint statement from both countries indicates that the focus of the defence relationships between India and Russia will remain on the development and production of advanced defence technologies and systems through joint efforts.

“Both sides agreed to encourage joint manufacturing in India of spare parts, components, aggregates and other products for maintenance of Russian origin arms and defence equipment under Make-in-India programme through transfer of technology”, the statement read.

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In a second meeting, Defence Ministers Rajnath Singh (India) and Andrey Belousov (Russia) committed to building on their previously established mutual trust by expanding bilateral defence cooperation even further.

The Indian side indicated that it was interested in procuring additional batches of S-400 missile systems, as well as exploring the procurement of the more advanced S-500 systems, in order to improve its own combat capabilities.

Furthermore, the Ministers agreed to continue working toward establishing a bilateral trade settlement system based on national currencies and enhancing the ability of both countries to interact with one another in terms of payment and financial messaging systems. There was also an agreement to explore the possibility of creating a central bank digital currency platform(s).

The Ministers were pleased to report that significant progress has been made toward concluding a Free Trade Agreement between the Republic of India and the Eurasian Economic Union on goods, and they have agreed to make every effort to reach a mutually beneficial investment protection agreement.

Both countries also discussed how to create long-term supplies of fertilisers to the Republic of India, including through the creation of joint venture in this area.