The Hindu : Hard bargaining at Indo-Russian defence meet

Online edition of India's National Newspaper
Friday, Jan 17, 2003

International

International

Hard bargaining at Indo-Russian defence meet

By Vladimir Radyuhin

The Defence Minister, George Fernandes, with the Russian Foreign Minister, Igor Ivanov (left), in Moscow on Thursday. — Photo: Vladimir Radyuhin

MOSCOW JAN. 16. The Indo-Russian Inter-Government Commission on Military-Technical Cooperation has met in Moscow for an annual review of bilateral defence agenda, dominated by a multi-billion package deal involving the Gorshkov aircraft-carrier as well as nuclear-capable bombers and submarines.

The third session of the IRIGC meeting from January 15-17, co-chaired by the Defence Minister, George Fernandes, and the Russian Minister for Industry, Science and Technology, Ilya Klebanov, is being conducted in tight secrecy.

Russian sources attributed this to hard bargaining over the terms of the package deal. Taking advantage of India's keenness to get four Tu-22M3 backfire strategic bombers and two Akula-class nuclear submarines, Russia is trying to get India pay a higher price for the Gorshkov refit and add more items to the deal, the sources said.

While the two sides have agreed on the price of MiG-29K fighter planes and Ka-series helicopters to be based on Gorshkov, differences persist over the cost of the warship's refit, valued differently at between $400 to $800 million. Also, Moscow wants to link the supply of the bombers and nuclear submarines to the sale of MiG-AT trainers for the IAF.

Undaunted by India's declared preference for the British Hawk aircraft, the MiG aircraft corporation has not abandoned hopes of winning the contract for the supply of 66 trainers to the IAF and will display its MiG-AT at the Bangalore airshow next month.

Another possible reason for the secrecy is that Mr. Klebanov is under fire for his handling of defence cooperation with India. Experts say that Russia is ceding positions on the Indian weapons market to Western companies because it is neglecting such a mainstream tendency in defence cooperation as international production cooperation and mergers.

"With a rare exception, Russian companies have fallen behind West European and Israeli firms in setting up direct business links (with Indian defence factories),'' the Nezavisimaya Gazeta said today, adding that Russian arms manufacturers account for a mere 25 per cent share in India's $4-billion defence acquisitions budget.

Experts blame Mr. Klebanov for this situation. "As long as Klebanov is in charge of defence ties with India, there won't be any coherent government policy of promoting factory-to-factory production ties between the two countries,'' said Konstantin Makienko, deputy head of the Centre for Analysis of Strategies and Technologies.

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