On his visit to India, Vladimir Putin is to conclude three weapons contracts totaling $4 billion, including one that at last draws a line under the Admiral Gorshkov's final price.
According to an official from the Ministry of Defence and a source close to the top management of Rosoboronexport, three contracts on military-technical cooperation between Russia and India were prepared for signing during Vladimir Putin's visit to India on March 11–12. These include an additional $2.35 billion contract between Rosoboronexport and the Indian Ministry of Defence to complete construction on the Vikramaditya (formerly the Admiral Gorshkov), a $1.2 billion contract to supply 29 MiG-29K/KUB carrier-based fighters, including for this aircraft carrier, and a contract between the Russian United Aircraft Building Corporation and the HAL Indian corporation on joint development of the MTA (IL-214) military transport aircraft.
The largest of the contracts, concerning the Vikramaditya aircraft carrier, has a long history behind it. Currently being modernised at the Sevmash shipyard on the Northern Dvina River, the Admiral Gorshkov deal was originally assessed at $970 million in 2004. However, after Sevmash passed the $550 million mark in 2007, India stopped financing the project: it became clear that the money would not go far enough, and the two countries reopened negotiations on the price of the deal. Last year, Sevmash received $100 million in additional tranche from India and the year before it received 6 billion roubles in a loan from Vnesheconombank to keep the project afloat. Now, India will allocate an additional $1.5 billion where Russia had asked for $2 billion, an anonymous manager at Sevmash said.
The MTA project has been under discussion since the early 2000s. The countries discussed the financing scheme partly envisaging India's debt to Russia, but finally agreed to invest $300 million each in the plane's development, a source in the United Aircraft Building Corporation said, and the contract is ready to be signed. Though the financial problems were resolved, the project is hardly feasible since specialists to design the plane are no longer available, said a specialist at the Centre for Analysis of Strategies and Technologies, Konstantin Makiyenko.
Still, this series of contracts, especially the one resolving the fate of the Admiral Gorshkov, is a huge success that may be compared in size to the largest weapons contracts concluded with Vietnam in 2009–2010 (almost $5 billion) and Algeria in 2006 (over $7.5 billion), said Moscow Defence Brief's Editor-in-Chief, Mikhail Barabanov.
The two sides are also negotiating the conclusion of a contract to develop a new fighter on the basis of the Russian PAK FA fifth-generation aircraft, and the supply of 40 Su-30MKI fighters to India. Most likely, however, they will not be signed during Putin's current visit to Delhi, a source at Rosoboronexport said.
Alexei Nikolsky