Russia and India are set to sign a deal worth more than US$5 billion on the delivery of Russian S-400 missile systems, major media outlets have reported.

Russian President Vladimir Putin, who flew into New Delhi on Thursday, will reportedly oversee the agreement during his visit to India.

The Wall Street Journal reported on Wednesday that the deal would involve a sanctions waiver from the United States as it would normally trigger action taken under Washington’s Countering America’s Adversaries Through Sanctions Act (CAATSA).

The US last month sanctioned China’s Equipment Development Department for its recent purchase of Sukhoi-25 jet fighters and S-400 missiles from Russia. The move was intended to send a message to other countries considering similar arms deals with Russia.

But the US considers India a strategic ally and therefore a waiver may be issued. The US wants to bring India, Japan and Australia together in response to China’s increasingly assertive stance in the Indo-Pacific region.

Over the past two years, India and the US have signed two defense pacts that allow the use of each other’s military bases for repairs and replenishment of supplies, and allow India to purchase advanced American military communications technology.

The S-400 surface-to-air missile system is capable of tracking and taking down aircraft hundreds of miles away, and India believes it needs it to defend the country against not only China but also Pakistan.

The Journal also reported that US Secretary of State Mike Pompeo has said that Washington doesn’t want to “penalize great strategic partners like India.”

But India is also known for its independent foreign policy and Russia remains its main arms supplier.

US Defense Secretary Jim Mattis has characterized the missile deal as “maybe the thorniest problem currently bedeviling US-India strategic partnership.”