TL;DR: running the newsWhen Russian President Vladimir Putin’s plane lands in Delhi on December 4, it will be his first visit to India since the war in Ukraine began in February 2020. The optics would be simple: two longtime partners joining hands again after a few years. The reason for those smiles is anything but simple.There are two big stakes on the table. One is hard power: India wants five more S-400 Triumf air defense squadrons, in addition to those it has already ordered from Russia and tested in Operation Vermillion this year. The second is financial plumbing: plans to link India’s RuPay and Russia’s Mir payments network and improve the rupee-ruble system so trade can continue even as Western sanctions tighten around Moscow.The combination of missiles and financial pipelines highlights the primary challenge facing India’s foreign policy in 2025: How to maintain close ties with Russia while avoiding a rift with the West?
Why is S-400 still important for Delhi?
India signed the original $5.5 billion S-400 deal in 2018, but it did so under great pressure from the US under CAATSA, the law that punishes large defense purchases from Russia. Finally, Washington made an exception for India in 2022, tacitly acknowledging that punishing Delhi would harm its own Indo-Pacific strategy.Things have changed on the ground since then, but not in the skies over India. China is still upgrading its air force and missile stockpile, while Pakistan is still an unpredictable secondary front. The S-400 is one of the few systems that can close Indian airspace in this manner. It has long range and layered radar. We all read how the S-400 had successfully shot down several Pakistani drones during Operation Sindoor on the western front earlier this year. This has only added to the platform’s “game-changer” reputation in Delhi.That’s why the Modi government still wants five more S-400 squadrons, a new missile order, and may also consider Moscow’s offer to co-produce the Su-57 stealth fighter, even though there has been much discussion about moving away from Russian equipment. For Indian planners, it is not about nostalgia; It’s about filling real gaps in their capabilities faster and, in many cases, cheaper than Western vendors.But for Washington and Brussels, another big S-400 deal could be a warning sign. Analysts have said adding to the original deal could reignite the CAATSA debate, just as the US Congress and European capitals are already troubled by India’s Russian oil purchases.Each additional S-400 battery purchased by India is more than just a missile system; This is a test of how far the West is willing to go to give Delhi “special honour”.
Russia’s stealth sweetener, Su-57, and India’s ‘strategic options’
There are bigger things in the air than missiles. With Putin’s arrival, Moscow is also showing the Su-57 stealth fighter aircraft, which is more futuristic.A recent article in the South China Morning Post states that Russian officials have said they are willing to give India unusually deep localization and technology transfer on the export version of the Su-57. He also hinted at the possibility of licensed production in India.
The message to the Kremlin is clear: Even if Western partners are hesitant to share cutting-edge fighter aircraft technology, Russia is still willing to open the black box. The potential Su-57 deal is another way for India to show that it has “strategic options”. It is not stuck in a camp, even though trade, tariffs and Ukraine issues sometimes strain relations with the US.There is still the question whether the Indian Air Force really wants that many Su-57s. The stealth-jet offer is a political subplot of the Modi-Putin summit. This shows how Moscow is trying to prevent India’s defense budget and attention from shifting towards American, European and Indian systems.
Rewiring the Money Pipe: Rupee, Mir and Rupay
Payments are the lifeline of India-Russia relations, while the S-400s are the backbone.Since the invasion of Ukraine, trade between the two countries has increased to nearly $70 billion in 2024–25, largely due to cheap Russian oil. But moving money from point A to point B is becoming harder as US and European sanctions hit Russian banks, oil companies and shipping.India and Russia have created a rupee-based settlement system using Special Rupee Vostro Accounts (SRVA) in Indian banks to facilitate trade. This is a modern version of the old rupee-ruble trade of the 1950s. In August, the Reserve Bank of India eased rules to allow Russian companies to invest their excess rupees in Indian government bonds, stocks and infrastructure. This way, the money is not just deposited in bank accounts.
Still the system is breaking down. Indian exporters have said they are facing more trouble making payments for goods shipped to Russia as banks are worried about secondary sanctions. Some trade groups have asked Delhi to clarify the rupee-ruble rate and guarantee framework to help people trust the system again.This is where the idea of Rupay-Mir comes from. At the summit, negotiators want to get at least a political green light and perhaps even a roadmap for both sides to agree on each other’s domestic card networks.In real life, this could mean that Indian tourists in Moscow can use RuPay cards without the need for a Visa or MasterCard.
- Mir payment from Russian tourists in Goa or Kerala.
- Over time, traders in both countries have begun to settle through local currency corridors instead of dollar-clearing centers.
It’s about something bigger: A world where only Western financial systems no longer work. This means survival for Russia, which is cut off from most of the Western banking system. For India, this is a strategic insurance policy that shows it can help build alternative circuits without officially joining any “anti-dollar” bloc.
New sanctions and low oil prices
The raw truth of oil behind the financial engineering.Before the war in Ukraine, Russia supplied almost no crude oil to India. By mid-2025, it was supplying about 35-40% of India’s crude oil, making it the country’s largest supplier and saving Delhi billions of dollars in import costs due to deep discounts.But that deal is now hitting a wall of tough sanctions. A new US-EU-UK package aimed at Russian companies like Rosneft and Lukoil is forcing Indian refiners to reconsider how much risk they are exposed to. Indian imports of Russian crude rose to about 1.85 million barrels per day in November, according to Reuters, amid a last-minute rush to stock up. However, these are expected to fall to around 600,000-650,000 bpd as restrictions take effect in December, the lowest level in three years.Reliance, India’s largest private refiner, has already stopped using Russian crude at its SEZ refinery, which is focused on exports. However, it is still processing some Russian oil for use in India.This is the second “rope” that Modi walks. Cheap Russian barrels helped keep India’s inflation under control and protected households from rising prices around the world. But those same flows have further angered the West, and now they have led to sanctions that make it harder to get money, send goods, and get insurance.Washington and Brussels will now view every move India takes to protect payments – such as RuPay-Mir, changes in the rupee-ruble exchange rate, and new investment options for Russian businesses – through the lens of these energy sanctions. Are they smart hedging, or are they a way for Moscow to get away with it?
Strategic independence or strategic isolation?
Delhi says that at least officially there has been no significant change. From 2022, External Affairs Minister S Jaishankar has said that India is against war, supports dialogue and diplomacy, and stands for the UN Charter and territorial integrity. However, India will not be told from whom it should buy oil or weapons.Indian strategists call this “multi-alignment” or “strategic autonomy”. That means working more with the US and its allies on technology and the Indo-Pacific while maintaining strong defense and energy ties with Russia and dealing with a tough relationship with China.But people in the capitals of the West are less patient than they were in the first few months of the war. A recent article in Foreign Policy said that at a time when Europe and the US see Ukraine as a fight for survival, India’s style of strategic independence is beginning to seem “alienated”, even opportunistic.This does not mean that any crisis is coming. India is still an important part of the US plan to control China in Asia. Washington has already shown that it is willing to endure some inconvenience to keep Delhi close, as seen by the 2022 CAATSA waiver and several defense technology projects.Still, every new action – more S-400s, deeper trade between the rupee and the ruble, and integration of the card system – adds weight to scales that are already very well balanced.
What will the summit actually mean?
Putin’s successful visit will likely be seen as proof that India cannot be pushed around. It buys the things it needs from whoever it wants and makes its own financial plans. The S-400 has a special meaning: it was a system that India bought despite public warnings from the US, and it seems to have worked well in the war.People in the house who don’t like this idea will have other problems. Are India’s long-term goals of diversification and indigenization slowed down when it renews its dependence on Russia for large defense items? Are Indian banks and exporters being asked to take too much risk as restrictions tighten? And what if a future US government decides that waivers and quiet agreements have gone too far?The Modi government seems to think that India’s economic strength and usefulness in world politics gives it some freedom of action for the time being. That fundamental stake will not change as a result of the 23rd annual summit. What this will do is raise the stakes even higher, with more hardware in the air and more pipelines in the financial system.When Modi and Putin meet in Delhi this week, the news will be about missiles and credit cards, fighter planes and oil flows. The real story is below: Can India partner with a sanctioned Russia without damaging its relations with the cautious West?(With the help of agencies)
