New Delhi, October14
Ahead of defence minister A.K. Antony’s visit to Moscow beginning Tuesday, India and Russia in a major breakthrough have ironed out differences over cost escalation of armament systems.
In a deal, New Delhi has now agreed to pay an annual cost escalation of five per cent as against 2.8 per cent originally worked out on all arms contracts worked out with Russia earlier.
The deal, according to top defence officials, has paved a way for resumption of supply of fighters, warships, tanks and helicopters, which had been held back.
The first major deal to be inked under the new cost escalation contract is for purchase of 40 new SU-30 MKI fighters. The new fighters would be supplied to India by 2010 and would bring the number of Sukoi in the Indian Air Force inventory to 230.
Under the new deal signed here on Friday by top officials of the Hindustan Aeronautics Ltd and Russia’s state owned arms agency Rosenbroexport, Russia has agreed to supply 40 Sukois in semi-knocked down kits at a cost of $1.6 billion.
By agreeing to new annual cost escalation of five per cent, India would now be paying whopping $5 billion for 230 Sukhois fighters, which currently are the main stay of the IAF.
India under a technology transfer agreement signed with Russia in 2000 is producing 150 Sukhoi fighters at Nasik HAL.
India has already floated its biggest ever defence tender for purchase of 126 multi-roll combat aircraft (MRCA) at a huge cost of $10 billion. The first of these new MRCAs are also likely to enter service by 2010-11.
— PTI
