Putin eyes multi-billion dollar deals with India
Posted: 11 March 2010 0213 hrs

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MOSCOW: Russian Prime Minister Vladimir Putin heads to India on Thursday to strengthen the close partnership Moscow and New Delhi have enjoyed since the Soviet era with an estimated 10 billion dollars of new deals.

The highlight of the visit is set to be the signing of deals to sell Russian military hardware, including an accord on a Soviet-era aircraft carrier whose troubled history had raised fears over the future strength of relations.

Other deals will include a contract to sell India 29 MiG fighter jets and an agreement to install additional nuclear power units in the southern Indian state of Tamil Nadu, Putin's foreign policy aide Yury Ushakov told reporters.

"A preliminary estimate shows that the volume of the business deals in monetary value will top 10 billion dollars," Ushakov said, estimating that at least 14 agreements would be signed. "We have an enormous interest in India."

The sale of the Admiral Gorshkov has been marred by a series of price disputes and delayed deliveries, compounding concerns in Moscow that India could be tempted to end its dependence on Russian military equipment.

An Indian government source told AFP Putin was keen to use the trip to sort out all remaining sticking points related to the vessel's sale. Ushakov pledged the new agreement would help the two countries put the dispute behind them.

"Judging by everything, we are approaching an agreement that will suit both sides," he said.

Russia supplies 70 percent of India's military hardware but New Delhi has in recent years also looked towards other military suppliers including Israel and the United States.

Russian business daily Vedomosti reported earlier this month that officials had hoped to sign three military agreements worth some four billion dollars.

These will be for the refurbishment of the Admiral Gorshkov, worth 2.35 billion dollars; a 1.2-billion-dollar contract to sell India 29 MiG-29 carrier-based fighters; and a deal to jointly develop a transport aircraft, said the report.

Ushakov declined to give a breakdown of the 10-billion-dollar package.

An official with state aircraft holding United Aircraft Corporation (UAC) confirmed to AFP that UAC and India's HAL planned to sign a deal to create a "new joint venture" to develop the transport aircraft.

Russia and India have already pledged to commit 300 million dollars each to the project.

The strong ties between Moscow and New Delhi date back to the 1950s after the death of Stalin. But India has in recent years also taken care to balance this friendship with close ties to the United States.

Together with Brazil and China, Russia and India are part of the so-called BRIC grouping of major developing economies seeking to promote a multipolar world economy not dominated by the United States.

At just over 7.5 billion dollars in 2009, trade turnover is minuscule and the two countries will aim to increase it to 20 billion dollars by 2015.

Russia is already building two nuclear power units in the southern Indian state of Tamil Nadu and agreed to install four more nuclear reactors there as part of an agreement signed during President Dmitry Medvedev's visit to India in 2008.

Putin, who last visited India as Russian president in 2007, is set to meet his counterpart Indian Prime Minister Manmohan Singh and Indian President Pratibha Patil. This will be Putin's first trip to India in his current capacity.

Ushakov said Russia hoped tighter ties with India would help Russia diversify its hydrocarbons-based economy.

"Relations with India are also important with an eye to conducting reforms in the Russian economy, with an eye to securing a quality technological breakthrough," he said. - AFP/de