Russia Wants India to Dump Dollars and Use Euros for Future Arms Deals

This is significant. Russia considers the protection of its remaining defense infrastructure to be a crucial part of both its economy and its military capabilities. The fact that it is willing to risk alienating India over this in the midst of a huge competition to replace the IAF's MiG 21s, indicates that they have a very real concern about the dollar crashing.

A Euro Exchange for India's Russian Accounts (Subscription Required)
Aviation Week & Space Technology
07/23/2007, page 36

Neelam Mathews
New Delhi

India considers shift from the dollar for its Russian military contracts

Printed headline: A Euro Exchange

A fallen dollar has pushed India into a corner on its Russian military contracts.

A recent Russian insistence that India must pay more for defense equipment—how much is not known—to offset the effects of a weaker dollar has unnerved the Indian defense ministry, which already faces demands for an additional $10 billion in procurement.

India, which wants to keep its Russian military purchases on track, has begun studying Russia’s suggestion to convert purchases to the euro. But if it chooses to do so, the bill would be high: The exchange rate is currently nearly $1.38 to €1.

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Is this another nail in the dollar's coffin?