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In one of the most substantial defence deals with Russia, India inked a deal worth $1.2 billion on December 5th for the procurement of 80 MI-17 V5 helicopters. The deal also includes spare parts and armaments besides the offset obligations to the tune of $400 million to be fulfilled by Russian firm Rosoboronexport who will manufacture and export the copters.
India is expected to receive these helicopters between 2010 and 2014. The MI-17 V5 will be weaponized for combat operations and will replace the older MI-8s which are in the Indian Air Force. They will also augment the existing fleet of MI-17.
Earlier, the MI-17 V5 helicopter had been criticized for having high life cycle costs and outdated technology. However, the officials confirmed that the helicopters will be able to land at a height of 18,000 feet with stronger engine, better avionics and night flying ability.
This helicopter deal comes at a time when the Indo-Russian relations are strained due to the inconsistencies in the Admiral Groshkov aircraft carrier deal. Russia had stunned India by demanding over a billion dollars more for the refitting of Admiral Gorshkov, over and above the original price of the $1.5 billion deal signed earlier.
There were other issues plaguing the Indo-Russian relations like India’s plan to lease the new Russian Akula-II class attack submarine ‘K-152 Nerpa’ for a decade beginning 2009. Besides, there were issues regarding cost escalation of SU-30 MKI fighters and the transfer of technology of T-90 tanks being manufactured in India.
However, the current visit by the Russian President Dmitry Medvedev to India is aimed at resolving the contentious issues. Officials revealed that most of these issues are being discussed and resolved. The two sides are moving on from a buyer-seller relationship to a joint production and development team. Both the countries share a forty year defence relationship with 70 per cent of the Indian inventory containing Russian and erstwhile Soviet Union equipment.
The $1.2 billion helicopter deal’s offset obligations includes equipping 3 Base Repair Depots (Chandigarh) for overhauling and reconditioning of the helicopters including engines and auxiliary power units. Offset also contains purchase of on-board equipment for SU-30 aircraft, establishing facilities for producing helicopter parts and a training centre for Pilots and ground personnel. The offsets will be to the tune of $405 million.
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