India is likely to make its payments for Russian arms in euros to a Russia-nominated bank to bypass the threat of US sanctions for purchase of military hardware including the S-400 air defence missile system, people familiar with the details told ET. 

While certain payments for existing defence transactions have been processed through the rupee-rouble route, the people said that a solution was firmed up this month with Russia’s VTB Bank agreeing to receive money in euros. 

Over $4 billion worth of payments to Russia have bunched up for this financial year, with the biggest contract being the S-400 system, followed by the Chakra III submarine lease and the procurement of four frigates for the Indian Navy. 

Besides, two additional Russian contracts are expected this year for the supply of AK 203 rifles to the armed forces that will be manufactured in Amethi and the inking of an Army contract to procure Ka-226 helicopters that will be produced by a HAL-Russia .. 

Despite the repeated threat of US sanctions, India has made it clear that it will not back off from the S-400 deal with Russian manufacturer Almaz-Antey that has been in Washington crosshairs for long. At the same time, India negotiated several defence deals with the US, including the purchase of air defence missiles for the national capital, armed drones and naval aircraft. 

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