India, Russia settle aircraft carrier deal

MOSCOW, Dec. 8 (UPI) -- Ending a protracted logjam over the pricing of a naval aircraft carrier purchase, Russia and India have reached agreement on a key defense deal.

The issue came up in high-level talks between Russian President Dmitry Medvedev and visiting Indian Prime Minister Manmohan Singh earlier this week.

Details of the agreement were not made public but India's Foreign Secretary Nirupama Rao confirmed the breakthrough to reporters after the summit.

"Both the leaders discussed the issue and noted excellent progress on negotiations on price and technical issues which have been brought to a successful conclusion," she was quoted as saying to Indian and Russian media.

No details were given about the carrier Admiral Gorshkov's final price but reports said the final cost could be more than $2 billion.

The Admiral Gorshkov was gifted to India -- free of charge -- in 2004 in line with a contract signed the same year.

The 44,570-ton aircraft carrier, now rechristened to INS Vikramaditya, was set to be delivered in 2008, but the process has been delayed because of a renegotiation over the refitting prices.

The initial contract had earmarked $964 million for the vessel's refurbishment and $536 million for a complement 16 MiG29K fighter aircraft fitted on board.

Four years later, however, Russia claimed it underestimated the cost of the project, adding a surcharge of $1.2 billion and delaying delivery of the navy ship until 2012.

India rebuffed the price hike, calling it exorbitant. Yet it has since then agreed to pay $800 million for the refitting project, Indian media reported.

The squabble over the Soviet-made carrier had come to symbolize the strains in relations between the two Cold War allies.

The Admiral Gorshkov is to join the Indian navy and replace the INS Viraat, now 50 years old.

There was no public announcement as to the vessel's new delivery deadline.

The breakthrough came during a three-day trip Singh is currently undertaking in Moscow, during which both countries signed a raft of agreements, including one on cooperation in civilian atomic energy and another on arms trade.

Both Russia and India are members of the so-called BRIC club of emerging economic giants, and New Delhi has been keen to win Moscow's support in bolstering its civilian nuclear energy program.

Two agreements signed on arms focused on bilateral arms trade between 2011 and 2020, and on a deal to service Russian-made arms sold to India, according to an announcement issued from the Kremlin.

Details of the agreements were not disclosed.