The Telegraph
Wednesday , December 26 , 2012
Since 1st March, 1999
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Putin takes home $4 billion

- Contracts ensure Russia remains most important defence supplier

New Delhi, Dec. 25: Russian President Vladimir Putin’s visit on Monday, though muted by the protests in Delhi, still showed how important Moscow is to India.

India contracted military equipment totalling nearly $4 billion that will keep Russia as its most important defence supplier for a decade and more unless there is a rollback of foreign policy.

The contracts for the 42 additional Sukhoi 30MKi kits and for 71 Mil Mi-17 V5 helicopters were expected. Less expected was an agreement to set up a joint venture in India to manufacture helicopters made by Russian firms Kamov and Mil. The two firms are known mainly for their military platforms but also produce civilian variants.

Foreign ministry officials said the agreement to jointly make the aircraft in India was signed between Russia Helicopters and Elcom Systems Pvt Limited.

The contract for the 42 Sukhoi 30MKi fighter aircraft kits to be assembled by defence public sector company Hindustan Aeronautics was envisaged in February 2010. Since then the cost of the licence-production arrangement has escalated. Each aircraft may now cost close to Rs 400 crore and, according to a recent audit report, nearly 20 per cent more than the price tag attached to the planes if they were to be bought in “flyway condition”.

Sukhoi 30MKi are the most modern aircraft in the Indian Air Force’s combat fleet. They were first contracted by India in 1997. Subsequently, there were contracts in 2000 and 2007.

Hindustan Aeronautics signed the contract for the 42 Sukhoi 30MKi fighter aircraft kits with Rosoboronexport. The aircraft will be licence-produced. The IAF aims to have a total of 272 Sukhoi fighters. HAL claims it has delivered 119.

India also signed a contract for an additional 71 medium-lift Mi-17 V5 helicopters. The IAF had contracted for 80 of these helicopters earlier. Of the lot contracted yesterday, 59 will go to the IAF and 12 to central police forces. The value of the contract was not disclosed.

Defence ministry sources said there was also an agreement to sort out technical problems with the INS Chakra, the nuclear attack submarine leased by the Indian Navy from Russia for 10 years.

The Russian delegation was urged to stick to the timeline for the delivery of the aircraft carrier Admiral Gorshkov (rechristened INS Vikramaditya) that is now expected in the last quarter of 2013. India last year agreed to escalate the cost of the Gorshkov from $947 million, when it was contracted in 2008, to $2.3 billion.

Russian exports of military hardware to India totalled nearly $11 billion last year. Nearly 70 per cent of India’s military arsenal is of Russian or erstwhile Soviet origin.