Reliance Defence, Russia’s United Shipbuilding sign Rs 66,000 cr strategic pact

A delegation of 18 Indian industry captains is already in Russia to accompany PM Modi during his visit.

By: Express News Service | New Delhi | Published: December 24, 2015 2:40:58 am

Reliance Defence has entered into a strategic partnership agreement with Russia’s largest shipbuilder, United Shipbuilding Corporation (USC) and Rosoboronexport with an aim to get $10 billion worth of business in manufacturing, refitting and modernisation of surface vessels for the Indian Navy. According to sources, the agreement has a time horizon of 15 years and focuses on modernisation and refitment of all Russian origin surface warships of the Indian Navy at Reliance’s newly acquired facility in Pipavav. The proposal is one of the many points on agenda during Prime Minister Narendra Modi’s Moscow visit.

Meanwhile, Prime Minister Modi arrived in Moscow on Wednesday. During his visit both countries are set to seal a raft of deals in key sectors like defence, nuclear energy and hydrocarbons to boost their robust and close partnership. A delegation of 18 Indian industry captains is already in Russia to accompany PM Modi during his visit.

The two sides are also slated to discuss the S-400 missile air defence deal that was cleared by Defence Acquisition Council last week. The purchase of 200 Kamov 226T choppers is yet another agenda point which is crucial for replacement of vintage Chetak and Cheetah choppers of the Army.

The agreement was signed in Moscow between the top leadership of the two corporations on Wednesday and is likely to be announced after the meeting between Prime Minister Narendra Modi and Russian President Vladimir Putin. India is expected to sign a Rs 30,000 crore deal for four new improved Talwar class (Krivak-3 follow-on/Admiral Grigorovich class) frigates during the summit. Two of these frigates will be fully made in India at the Pipavav facility of Reliance Defence, while two will be built in collaboration with USC in Russia.

The second part of the deal includes the refit, maintenance and life-extension of 35 Russian and Soviet-origin surface vessels with the Indian Navy to generate business worth over Rs 35,000 crore in the next 15 years. This modernisation and refitting work will also be done at Pipavav Defence and Offshore Engineering Company Ltd (PDOC). The combined value of the two opportunities exceeds Rs 66,000 crore.

All the refitting and modernisation work of the vessels of Indian Navy has so far been done at public sector shipyards. But Navy chief Admiral Robin Dhowan and defence minister Manohar Parrikar have announced that the life-extension and refitting of ships will be done at a shipyard of the choice of the foreign OEM. With USC signing an exclusive strategic pact with Reliance, Pipavav is likely to emerge as the shipyard of choice for maintenance and refitting of the vessels.

Among the 35 Russian and Soviet origin ships is India’s biggest warship, the 45,000-tonne aircraft carrier INS Vikramaditya, which is scheduled to undergo its first refit next year after the International Fleet Review in February 2016. The other 35 Russian origin surface vessels with the Indian Navy include five Rajput class destroyers, six Talwar class frigates, one Jyoti fleet tanker, 12 Veer class missile corvettes, four Abhay ASW corvettes, and six Pondicherry class minesweepers.

Sources in the Navy said that it expects to spend $10 billion on new frigates and refit programmes over the next ten years.

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