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India gives in to Russian demand on Gorshkov deal

India gives in to Russian demand on Gorshkov deal

India will now pay an additional $1 billion for the renovation of the aircraft carrier

New Delhi: India has given in to Russia's demand for a staggering price hike for the aircraft carrier Admiral Gorshkov.

India will now pay almost an additional $1 billion over the agreed price of $1.5 billion. In yet another blow, Russia has also told India that the aircraft carrier will not be delivered before 2012, that's four years behind the schedule as laid out in the contract.

The 45,000-tonne displacement carrier was to be delivered to India by August this year as per a $1.5 billion contract signed in 2004, but Russia stunned India in November last by demanding $1.2 billion more for refitting and other works.

India capitulated to Russia's terms during Defence Secretary Vijay Singh's recent visit to Moscow. Singh denied reports that Russia wanted to cancel the contract, but admitted that Moscow demanded a 'reaffirmation' from New Delhi on this deal.

The Gorshkov was phased out of the Russian Navy over 15 years back. Under the initial deal, the hull of the Soviet-built aircraft carrier Baku, re-christened 'Admiral of the Fleet Gorshkov' after the Soviet collapse, was transferred to the Indian Navy free of cost with a condition that it will be modernised at Russian shipyard and equipped with MiG-29K fighters.

During his recent visit to India last week, Russian Prime Minister Viktor A Zubkov is understood to have discussed the issue with Prime Minister Manmohan Singh amid reports that New Delhi is willing to cough up up to $600 million extra.

Moscow has last week threatened to walk out of the deal over the ongoing price dispute. Delhi had termed it as a blackmailing tactic by Moscow.

first published:February 27, 2008, 23:09 IST