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India rushes defence team to Moscow to break impasse
New Delhi, June 19: With differences over prices delaying the delivery of upgraded Sukhoi multi-role fighters and Gorshkov aircraft carrier, India today rushed a high-level defence team to Russia with fresh proposals to break the logjam.
For the second time in less than a month, Defence Secretary Shekhar Dutt and Secretary Defence Production KP Singh will hold parleys with top Russian officials to iron out the differences.
"The team has some concrete proposals to offer to break the logjam," top defence ministry sources told agencies as they expressed confidence that a "breakthrough could be achieved".
The visit of the team assumes significance with Defence Minister AK Antony admitting that New Delhi was facing "problems" in acquisition of the carrier Gorshkov as well as in negotiating a new deal to buy 40 more upgraded Sukhoi-30 fighters for the Indian Air Force.
Cabinet Committee on Security had recently cleared a proposal to buy these additional Sukhois as an interim measure to shore up the dwindling fighter strength of the IAF in the run-up to floating of international tenders for purchase of 126 Multi-role Combat aircraft.
"There are problems (with Gorshkov) we are trying to sort them out," the Minister had said in comments which came days after he had written a personal letter to Russian Defence Minister Anatoly Serdyukov seeking his intervention to ensure that the delivery of the 44,750 tonne carrier was not stretched beyond few months.
The carrier re-christened INS Vikramaditya was earlier scheduled to be inducted into the Indian Navy by August 2008, but Russia now claims that due to acute financial crises being faced by the shipyard where the warship is being refurbished, the delivery may be delayed as long as 2010.
It has also sought a review of other crucial defence contracts with India demanding millions of dollars more in sale of Sukhoi fighters claiming drop in the value of dollar.
Moscow had even reportedly threatened that it would foreclose the current SU-30MKI deal after the delivery of the first 100 fighters to New Delhi claiming cost escalation.
Under the USD 8.5 bn deal, said to be the single largest export contract for Russia`s Irkutsk corporation, the original makers of the Su-30 fighters, Moscow has so far supplied 60 fighters and said it was willing to supply 40 more at the current cost escalation of 2.5 per cent.
The deal also involves technology transfer.
Irkustk reportedly wants to double the cost of escalation rate to five per cent a year for supplying kits for another 138 SU-30MKI to be assembled by Hindustan Aeronautics limited.
And if India agrees to Russia`s demands, which leading defence experts have termed as "financial arm twisting", the cost of Sukhoi deal will go up by another half a billion dollars.
Leading defence experts point out that it was only the Indian order for first batch of Sukhoi-30s which had staved the financial crunch being faced by the Russian aviation major in 1998.
They also point out that New Delhi, in deference to the long-standing ties with Russia, had so far not invoked the offset clause in armament business with Russia.
In fact, while clearing the purchase of 40 fresh Sukhoi fighters two months back, the Cabinet Committee on Security did not not invoke the offset clause on the purchase terming the deal as a "repeat order".
Bureau Report
http://www.bharat-rakshak.com/NEWS/newsrf.php?newsid=8820
New Delhi, June 19: With differences over prices delaying the delivery of upgraded Sukhoi multi-role fighters and Gorshkov aircraft carrier, India today rushed a high-level defence team to Russia with fresh proposals to break the logjam.
For the second time in less than a month, Defence Secretary Shekhar Dutt and Secretary Defence Production KP Singh will hold parleys with top Russian officials to iron out the differences.
"The team has some concrete proposals to offer to break the logjam," top defence ministry sources told agencies as they expressed confidence that a "breakthrough could be achieved".
The visit of the team assumes significance with Defence Minister AK Antony admitting that New Delhi was facing "problems" in acquisition of the carrier Gorshkov as well as in negotiating a new deal to buy 40 more upgraded Sukhoi-30 fighters for the Indian Air Force.
Cabinet Committee on Security had recently cleared a proposal to buy these additional Sukhois as an interim measure to shore up the dwindling fighter strength of the IAF in the run-up to floating of international tenders for purchase of 126 Multi-role Combat aircraft.
"There are problems (with Gorshkov) we are trying to sort them out," the Minister had said in comments which came days after he had written a personal letter to Russian Defence Minister Anatoly Serdyukov seeking his intervention to ensure that the delivery of the 44,750 tonne carrier was not stretched beyond few months.
The carrier re-christened INS Vikramaditya was earlier scheduled to be inducted into the Indian Navy by August 2008, but Russia now claims that due to acute financial crises being faced by the shipyard where the warship is being refurbished, the delivery may be delayed as long as 2010.
It has also sought a review of other crucial defence contracts with India demanding millions of dollars more in sale of Sukhoi fighters claiming drop in the value of dollar.
Moscow had even reportedly threatened that it would foreclose the current SU-30MKI deal after the delivery of the first 100 fighters to New Delhi claiming cost escalation.
Under the USD 8.5 bn deal, said to be the single largest export contract for Russia`s Irkutsk corporation, the original makers of the Su-30 fighters, Moscow has so far supplied 60 fighters and said it was willing to supply 40 more at the current cost escalation of 2.5 per cent.
The deal also involves technology transfer.
Irkustk reportedly wants to double the cost of escalation rate to five per cent a year for supplying kits for another 138 SU-30MKI to be assembled by Hindustan Aeronautics limited.
And if India agrees to Russia`s demands, which leading defence experts have termed as "financial arm twisting", the cost of Sukhoi deal will go up by another half a billion dollars.
Leading defence experts point out that it was only the Indian order for first batch of Sukhoi-30s which had staved the financial crunch being faced by the Russian aviation major in 1998.
They also point out that New Delhi, in deference to the long-standing ties with Russia, had so far not invoked the offset clause in armament business with Russia.
In fact, while clearing the purchase of 40 fresh Sukhoi fighters two months back, the Cabinet Committee on Security did not not invoke the offset clause on the purchase terming the deal as a "repeat order".
Bureau Report
http://www.bharat-rakshak.com/NEWS/newsrf.php?newsid=8820
