India will pay Russia the equivalent of 5.2 billion dollars in Rubles as the price of S-400 missile defence systems, the contract for which was signed between the two countries earlier this month.
Russian Deputy Prime Minister Yuri Borisov was quoted as saying on Wednesday in Havana, Cuba, "the contract has been signed in Rubles," confirming earlier reports that Russia would switch to settlements in national currencies instead of the dollar with its partners in military and technical cooperation.
Minister Borisov is leading a Russian delegation to Cuba to negotiate defence and other deals between the two countries.
Under United States’ financial sanctions against Russian defence entities, no funds can be transferred to their accounts through the US banking system. Since the global currency movement happens through a US-controlled system known as SWIFT, almost all Russian defence industry and related firms have been shut out the dollar-denominated transfer system.
In addition to sanctions against Russia, the US also imposes secondary sanctions known as CAATSA (Countering American Adversaries Through Sanctions Act) against countries that buy Russian military equipment. While India has been left out of the secondary CAATSA sanctions, Washington most recently imposed sanctions against CAATSA against China for buying the S-400 system and Su-35 aircraft.
Under the contract New Delhi will get five regimental sets of S-400s for $5.2 billion. The first supplies will be carried out within two years.