At a time when the defence ministry is focussing on using modernisation funds efficiently, the Narendra Modi government has managed to save almost a billion dollars in the S-400 air defence missile system deal set to be finalised with Russia by the end of this year.

The S-400 air defence missile system can engage incoming enemy combat aircraft, surveillance platforms and even ballistic missiles at a distance of around 380 kilometres very effectively.

“The negotiations have been completed with the Russian side and we have been able to get a discount of around $960 million in the negotiations with the Russian side,” top government sources told My Nation on condition of anonymity.

The Acceptance of Necessity (AON) — the budget approved by the Defence Ministry for the deal — was around $6.2 billion but the negotiations committee managed to keep the deal at around $5.3 billion, the sources said.

Generally, the final price of weapon systems always exceeds the amount approved by the Defence Acquisition Council (DAC).

The main reason behind getting the discount, sources said, was the American sanction CAATSA (Countering America’s Adversaries Through Sanctions Act) through which the US wants to ban the procurement of the S-400 missiles by other countries.

Defence Minister Nirmala Sithraman has directed the acquisition wing of the Defence Ministry to go in for tough negotiations with vendors to get discounts on deals as every single rupee saved will help in further modernisation of forces.

Despite the American sanctions, India is moving ahead with the procurement of this missile system as China already has inducted it in its inventory and there is a possibility that Pakistan may also go in for them if India does not buy it.

However, Russians, fearing the Chinese reverse - engineering tactics to develop their own systems, have only supplied a truncated version of the S-400 to Beijing while India is getting the full version.

The Americans are likely to offer an alternative to the S-400 missiles to dissuade India against the S-400 deal, but the Russian system is seen as game changer by the Air Force. When deployed, missile system's five regiments would act as a shield against any missile or other aerial attack on the country.

Sources said, in order to get a discount on defence deals, the defence ministry has instructed the negotiation committees to go in for a tough bargain and get discounts like the ones they got in the Rafale aircraft deal and this missile deal.