India, Russia beef up ties with new defence deals

PUBLISHED : Monday, 24 December, 2012, 6:03pm
UPDATED : Monday, 24 December, 2012, 8:08pm


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Visiting Russian President Vladimir Putin signed deals to sell 71 military helicopters and kits to build 42 fighter jets to India on Monday as he sought to firm up ties with a traditional ally.

The contract for Mi-17 helicopters was first signed in 2010 and India has now increased the order from 59 to 71, the ministry of external affairs said in its list of deals agreed by Putin and Prime Minister Manmohan Singh.

India, which is one of the world’s largest arms importers as it works to upgrade its military, depends on Russian-made military equipment that accounts for 70 per cent of its arms supplies.

“Russia is a key partner in our efforts to modernise our armed forces and enhance our defence preparedness,” Singh said after holding talks with Putin and signing ten deals ranging from science and technology to education.

“A number of joint design, development and production projects are underway in high-technology areas. We expressed satisfaction that these projects are progressing well,” Singh said.

Also among the deals were the delivery of parts for 42 Su-30MKI fighter planes for assembly in India. The original agreement for the jets was signed last year.

The value of the two deals was not known but Russian news agencies said they were worth about US$2.9 billion.

Russia once had a virtual monopoly over India’s arms market, but New Delhi has been shopping around in recent years and Putin’s visit is seen in Moscow as a chance to regain lost ground.

Moscow has been worried recently by New Delhi’s increasing preference for Western suppliers, especially after Boeing was chosen last month over Russia’s Mil plant for a major helicopter contract.

India has been unhappy about delays to deliveries of some naval equipment, notably the aircraft carrier Admiral Gorshkov which is being refurbished for the Indian Navy in Russia.

Russia was originally to deliver the upgraded vessel in August 2008, but the date has now been pushed back to the end of next year while the price has more than doubled to US$2.3 billion.

After the meeting on Monday, Putin said the dialogue was “substantial and constructive”.

“We agreed to deepen ties in the areas of military and defence sectors,” he said.

The Russian Direct Investment Fund, a sovereign wealth fund, and the State Bank of India agreed to jointly invest up to US$2 billion to promote trade and economic cooperation projects.

The leaders also discussed the construction of India’s largest nuclear power plant, in the southern state of Tamil Nadu.

First conceived in 1988, the Russian-built Kudankulam plant was expected to start operations last year. But protesters surrounded the compound after an earthquake and tsunami hit Japan’s Fukushima Daiichi plant in March last year.

Singh said negotiations for the construction of Units 3 and 4 at Kudankulam had made good progress.

Bilateral trade has been growing steadily and is expected to reach around US$10 billion this year, up from 7.5 billion in 2009, according to official figures.

“Our trade turnover has overcome the consequences of global crisis, and this year we expect to reach record numbers, over US$10 billion. Our next goal is to reach US$20 billion already by 2015,” Putin had said before the one-day visit.

Agreements in the pharmaceutical, chemical and cultural sectors were also signed Monday.

The venue of the talks was switched to Singh’s official residence due to violent protests in central New Delhi following the gang-rape of a student that has caused widespread public outrage.