India, Russia ink $1.2B deal on jets

Jan. 19, 2010 at 1:00 PM
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NEW DELHI, Jan. 19 (UPI) -- India and Russia are poised to sign a $1.2 billion deal for 29 MiG-29 jet fighters for the Indian navy.

The so-called mega deal will reassert Russia's leading status in the Indian defense market, becoming New Delhi's principal arms supplier.

A Russian team of military officials is due to arrive in New Delhi this week to fine tune the MiGs contract following approval of the sale from the Cabinet Committee on Security, chaired by Indian Prime Minister Manmohan Singh.

"The deal will be finalized ... later this week," Sithanshu Kar, a Defense Ministry spokesman, was quoted as saying in a report by the Economic Times daily.

The lucrative deal follows an agreement the two countries signed in December, sealing a 10-year military pact that would cover weapons development, aircraft and maintenance contracts worth in excess of $5 billion.

The 29 MiG-29Ks would be purchased in addition to 16 similar aircraft purchases in January 2004. They will be deployed on an aircraft carrier, the Admiral Gorshkov, which it also hopes to take delivery of from Russia.

Russia supplies 70 percent of Indian's arms and weapons supplies.

Rechristened the INS Vikramaditya, the aircraft carrier was the source of friction for years between Moscow and New Delhi.

India bought the carrier for $900 million in 2004, promising Moscow that it would pay a Russian shipyard $974 million to revamp the vessel.

Wrangling however ensued over the cost of upgrading the 27-year-old ship as Russia demanded $2.9 billion for the refitting project, nearly three times the amount the government in New Delhi had agreed to.

The terms of the deal have since been renegotiated, with the refitting costs dipped to $2.3 billion. The deal still awaits approval from the CCS.

Either way, say experts in India, the two new contracts will further consolidate Russia's position as the largest defense supplier to the country, having clinched defense sales estimated at more than $35 billion since the 1960s.

According to the Times of India the MiG-29Ks will "operate from the 44,570 Gorshkov as well as the 40,000-ton indigenous aircraft carrier being built at Cochin Shipyard, which should roll out by 2014-2015."

The aircraft will be deployed with eight types of air-to-air missiles, including extended-range missiles.

"The will provide the navy a lethal punch at high seas," the Times of India reported.

India is in the process of revamping its defense hardware and equipment to keep abreast with military buildups in neighboring China and Pakistan.

The country's procurement budget is forecast to double to $30 billion by 2012.

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