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Indo-Russian defence co-operation & procurements in pipeline

The Prime Minister Narendra Modi during his two days visit to Russia stressed on a slew of “Make in India” contracts to ensure with technology from Russia coupled with Indian low production cost to build weaponry and spare parts for Russian origin military equipment cost competitively in  partnership for own requirement and export.

Russia has been India’s biggest arms supplier from 2014-18, accounting for 58 percent of India’s defence imports. India has bought military hardware worth USD 14.5 Billion from Russia including 5 units of Air Defence System Igla-S worth about USD 5.43 Billion contract to be delivered by 2020 end. The overall on-going Indian procurements is estimated around USD 18-25 billion and the Russian interest in approximately  USD 12.25 billion worth of ‘Make in India’ production with 50 percent indigenous contents. The salient programmes are as under:

  • Igla-S - Russia’s Igla-S missile a “Very Short Range Air Defence System” (VSHORADS) for the army, navy and Indian Air Force (IAF) won the bid $1.5 billion for 5,175 Igla-S missiles and 800 launchers.
  • Helicopters - The $2 billion deal involves building 140 Kamov-226T in Hindustan Aeronautics Ltd (HAL), after its joint venture (JV) partner, Russian Helicopters, supplies the first 60, fully built and balance to be produced in India with the level of localization going up to 50-70%. Russian Helicopters is also fielding a “Navalized” Kamov-226T in the Indian Navy’s tender for 111 “naval utility helicopters”. With its production facilities amortised over the first 200 Kamovs, Russian Helicopters could offer the navy a compelling price of around $1 billion. Russia will start exporting Mi-171A2 helicopters to India under an existing contract.
  • Kalashnikov AK-203 - The agreement to build 750,000 Kalashnikov AK-203 assault rifles for the Indian army, likely to cost about USD 1 Billion. The Defence Ministry is processing a tender for the production of 6.71 lakh rifles at the facility and is keen that 100 per cent indigenization of the weapons is achieved as the JV will also focus on exports to friendly foreign nations
  • Krivak-III Frigates - India plan to purchase of four Russian Krivak-III class frigates. The first two frigates are lying partially built in Yantar Shipyard, Russia. India need to pay about USD 1.50 Billion to complete them, install Ukrainian Zorya gas turbine engines before dispatch. A contract is being negotiated to build the next two Krivaks in Goa Shipyard Ltd.
  • BrahMos Missiles - The BrahMos missile would arm the four new Krivak-III frigates. Each vessel’s BrahMos system, including the “vertical launch system” and missiles on board, will cost Rs 1250 Crores (USD 175 Million).BrahMos missiles are also on order for the Navy’s four Visakhapatnam-class destroyers and will equip the seven Project 17A frigates under production. The total cost amounts to about USD 2.6 Billion.
  • Sukhoi-30MKI - Negotiations are under way for extending the licence to build an additional 18 Sukhoi-30MKI aircraft price of about Rs 450 Crores (USD 65 Million) for each. IAF will pay about USD 1.15 Billion for 18 new fighters. Delivery of these could start next year and be completed by 2022, increasing the IAF’s Su-30MKI fleet size to 14 squadrons, or 290 fighters.
  • Project 75-I Submarines - Russia has offered under inter-governmental agreement the Amur-class submarines for Project 75-I worth about Rs 50000 Crores (USD 7 Billion) for six new submarines. Russia has proposed joint design, prototype construction with full intellectual property rights which will be shared equally. It has offered to jointly develop the Air-Independent Propulsion (AIP) for the submarine. The other contenders are Thyssenkrupp Marine Systems from Germany, Naval Group from France and Kockums from Sweden.
  • Medium Fighters - The IAF plan to acquire for 114 medium fighters and have issues a RFI for the same. Two Russian companies in fray are the MiG-35 and Sukhoi-35. Beside Russia with its MiG-35 is also competitor for procurement of 57 multi-role carrier borne fighters for its two indigenous aircraft carriers.

During the visit the leaders discussed ways to bolster cooperation in trade and investment, oil and gas, nuclear energy, defence, space and maritime connectivity and signed 15 agreements/MoUs including the one inter-governmental agreement to produce spare parts for Russian origin military equipment.

India announced an USD1 Billion line of credit for the development of Russia's Far East for the development of the resource-rich region. The provisions under Countering America’s Adversaries through Sanctions Act (CAATSA) sanctions against countries that engage in “significant transactions” with Russian could be an issue.

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