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Russia pitches defence contracts worth $10 billion to India

ksenia kondratieva Moscow | Updated on August 25, 2018 Published on August 24, 2018

Crucial meet Some deals are expected to be signed during Vladimir Putin’s visit to India in October   -  GETTY IMAGES/ISTOCKPHOTO

Expresses concern over new contracts not being signed

Russian defence officials have expressed concern over not having new contracts with India, despite inter-governmental agreements for several large programmes signed years ago.

According to Alexander Mikheev, CEO of Rosoboronexport, Russia currently sits on $4-billion order book from India and it has pitched for programmes worth another $10 billion.

While Russia is well aware of certain challenges with post-sale service and maintenance of equipment which is often cited by Indian defence officials as disadvantage, it is much more concerned of not having new contracts with India, Dmitry Shugaev, Director of the Russian Federal Service for Military- Technical Cooperation (FSMTC), said addressing the media here.

“We keep surviving on the maintenance contracts,” he pointed out. The two governments have, over the past several years, signed several preliminary agreements, including those for five regiments of S-400 Triumph long-range anti-aircraft missile system, 48 Mi-17v5 helicopters, 200 Ka-226T helicopters, of which 140 would be made in India, and four Project 1135.6 frigates, two of which would also be manufactured locally.

The deals are expected to be signed during Vladimir Putin’s visit to India in October.

The largest contract for S-400 systems estimated at $5.5 billion is almost finalised, according to Shugaev. “We believe it’s quite logical to sign the contract during the upcoming summit,” he added.

“We are not pushing (the Indian side), but we’d like to sign the deal by end of year because this is to do with our industry’s production cycle,” Shugaev said adding that S-400 is a product in high demandand the Russian industry wants clarity on the Indian order so that it is able to deliver on time.

S-400 systems have already been ordered by China and Turkey, apart from Russia’s own Ministry of Defence.

5th Gen fighter saga

Shugaev formally confirmed India has temporarily withdrawn from the joint project for development of 5th generation fighter jet that both countries have been working on for the last decade. However, he said Russia is ready to re-open talks on the project.

“We didn’t shut any doors, we do understand this is a comprehensive issue for India, even from commercial perspective,” Shugaev said. “We are open to negotiations going forward, which could include co-joint development as well as technological cooperation or any other form of cooperation,” he added.

Shugaev said Russia, unlike any other country, was ready to share the technology for the project. “It could have been a joint project, not just a licensed production,” he said.

At the same time, Russia has made significant progress on its own fifth generation jet programme, Shugaev said. Its SU 57 fighter jet has passed the tests successfully and will be supplied to Russia’s Ministry of Defence.

When asked about continuing cooperation with India amidst US sanctions against Russia, defence officials said despite pressure building up, India didn’t “loose touch with reality” and the two countries are working on finding a solution.

Overcoming sanctions

“We can overcome these challenges. We are in talks with Indian partners to find ways to neutralise the sanctions, and the Indian government is showing sturdiness,” Shugaev said adding that Russia and India have a history of cooperation as well as new projects which makes it impossible to consider shutting down the cooperation in the wake of the US sanctions.

Acknowledging the difficulties in payments for defence contracts between India and Russia as Indian banks are reluctant to process payments to Russia citing the US sanctions, Shugaev said the countries are considering settlements in national currencies for some of the deals.

(The writer is in Moscow at the invitation of Russian Helicopters)

Published on August 24, 2018
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