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India and Russia have finally settled the final price for the aircraft carrier Gorshkov at $2.3 billion. Since both the countries have a significant history and a prospective future in terms of defence ties, the conclusion of this deal was crucial.
As for India, it suffered many setbacks in terms of negotiations in the process of finalizing the price of the aircraft carrier Gorshkov. As of now, the Indian side has asked for some additional onboard equipment at least as part of the increased price and the Russians have agreed to it.
The Gorshkov saga began in 2004 when the original agreement with the Russians was signed.The cost in 2004 was $974 million for the carrier’s refurbishment and upgrade and Gorshkov itself being offered free of cost. This included delivery of MiG-29K Fulcrum carrier-based fighters The delivery was then set for 2008.
In 2007, Rosoboronexport indicated a delay in the delivery of the carrier and an year later, it demanded an additional $1.2 billion. The reason quoted by the Russians was a miscalculation in the cost of refurbishment and rising oil prices. The cost now escalated to $2.9 billion. As for India, it agreed to consider the written request for additional $1.2 billion but declined to entertain anything above that. Later, the Russian government asked Rosoboronexport to come down to $2.4 billion.
Finally, India has agreed to pay a total of $2.3 billion but with a request for some additional equipment. India has also agreed for delivery of the carrier by 2012 without any penalty.
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