Since America considers India a major defence partner, the Narendra Modi government was hoping to receive an exemption from US sanctions over the acquisition of five S-400 units. India signed a $5.43 billion deal with Russia in 2018 in an attempt to secure its borders from enemies.

US law which gives the administration authority to slap strict sanctions on countries which have done deals with Russia about buying defence hardware was not formulated to punish friends and allies, but New Delhi must decide whether to extend its co-operation with Washington, US envoy to India Kenneth Juster said on Tuesday.

“Sanctions were never designed to harm friends and allies. India wants to keep its options open but ultimately choices need to be made,” Juster said on Tuesday evening in New Delhi.

The statement comes days after the US imposed sanctions against Turkey — a NATO member — over its decision to buy the the S-400 missile system from Russia for $2.5 billion.

Juster said that the defence relationship between the US and India comes down to the trade-offs that New Delhi must make in technology transfers with other nations in order to extend its co-operation with Washington.

“The US government and the defence industry have increased joint research, production, and defence sales with India, and made available some of the most sensitive US military equipment,” the ambassador emphasised.

Earlier on Monday, the Congressional Research Service (CRS) - an independent and bipartisan research wing of US Congress - warned in a report to Congress that "India's multi-billion-dollar deal to purchase the Russian-made S-400 air defence system may trigger US sanctions on India under the Countering America's Adversaries Through Sanctions Act (CAATSA)."

Despite making several attempts since 2018 for relief, the Trump administration has kept threatening India with sanctions under CAATSA and, instead, offered American missile defence systems to New Delhi. Nevertheless, the Narendra Modi government remain determined to move ahead with the $5.43 billion purchase which is said to be in the "national interest". In June 2019, Indian defence minister Rajnath Singh urged Moscow to explore the possibility of advancing the supply of the interceptor-based missile systems which can destroy incoming hostile aircraft, ballistic missiles and drones at a range of up to 400km.

India signed its order with Russia in October 2018 to buy five units of the S-400 air defence missile systems. In an attempt to avoid CAATSA, the two countries also formulated a payment mechanism and India made the first tranche of payment of around $800 million to Russia in 2019.