India and China plan to hold their first joint military exercise in December with army troops from both countries participating in counter-terrorism training in China.

The Times of India reported this week that the exercise will involve some 100 soldiers, but will go a long way toward improving relations between the world's No. 1 and No. 3 armed forces. China and India fought a brief but bitter border war in 1962, which was won by China. Mutual suspicion and border disputes linger.

The decision to hold the exercise was finalized recently at the inaugural Annual Defense Dialogue between the two countries.

"The two armed forces are upgrading military-to-military cooperation in a graduated manner, which began from setting up of the 'peace and tranquility' mechanism along the LAC," an unnamed Indian officer told the newspaper.

LAC refers to the Line of Actual Control, the de facto border between the two countries.

"This has graduated to holding of cultural and sports events between the forces deployed in border areas, allowing each other's military observers to military exercises and exchange of officers to military-training institutes," the officer said.

Admiral Gorshov delivery to be delayed

India acknowledged this week the delivery schedule for the Russian aircraft carrier Admiral Gorshov is running slow and set up a panel to monitor work on the ship.

"The Russian side has submitted a revised master schedule indicating a delay in the project," defense Minister A.K. Antony told Parliament in a written reply to a question.

The aircraft carrier was due to be handed over to India's navy next year; there is no current time line for delivery.

Indian news reports say Russia wants more money to retrofit the carrier, saying costs had exceeded their initial projections.

The modified Live class aircraft carrier was sold to India in 2004; it is to be renamed INS Vikramaditya.

Raytheon, Indian defense firms sign MoUs

Waltham, Mass.-based Raytheon Co. signed memorandums of understanding with five Indian companies to develop defense technology for the Indian military.

The Indian firms are Wipro Ltd. (NYSE:WIT), Bharat Electronics Ltd., Larsen & Toubro Ltd. (OTCBB:LTOUF), Godrej & Boyce Manufacturing Co. Ltd. and Data Patterns (India) Pvt. Ltd.

"These strategic alignments make good business sense for Raytheon and for India," Wes Motooka, vice president for international strategy and business development at Raytheon Space and Airborne Systems, said in a statement. "Our Indian associates are highly respected, proven technology suppliers, and our complementary capabilities will bring great value to India's military forces."

Raytheon is already working with the Strategic Electronics Division of the Tata Power Co., which also makes technology and defense equipment for India's military forces.

The move marks another step in the warming defense relations between the two countries. Russia is India's No. 1 defense supplier, but Israel and the United States have made recent gains.