Russia seeking review of defence deals with India

Russia seeking review of defence deals with India

Moscow, May 21 (PTI): Russia has sought a review of defence contracts with India due to a continued drop in the value of the dollar and an unprecedented strong rouble, a move that could increase the price of big ticket deals for Su-30 jets and aircraft-carrier 'Gorshkov' by millions of dollars.
This tricky issue was discussed extensively by Defence Secretary, Shekhar Datt, during his three-day visit here earlier last week, diplomatic sources said.
Russia's State arms export monopoly 'Rosoboronexport' has proposed to review the prices of deals in various stages of implementation due to the depreciation in the value of the US dollar and a sharp appreciation of the rouble, sources said.
Moscow indicated it would foreclose the Su-30MKI deal after the delivery of the first 100 aircraft to Delhi due to cost escalation and the manufacturer's inability to deliver them at the current price.
Under the 8.5 billion-dollar Sukhoi deal, said to be the largest single contract involving deep transfer of technology, Russia's Irkutsk Corporation has supplied 60 Su-30MKI multi- role combat jets and is willing to deliver 40 more aircraft at the current cost escalation rate of 2.55 per cent per annum.
But Irkutsk wants to double the cost escalation rate to five per cent a year for supplying kits for another 138 Su-30s to be assembled by Hindustan Aeronautics Limited (HAL).
If India accepts the Russian demand, the cost of the Sukhoi deal will go up by half a billion dollars.