Defence deals: India, Russia to take fresh look

The Indian team may also attempt to make headway in the stalled talks with Russia to enter into a tripartite agreement with Israel to upgrade India’s Tu-142 maritime surveillance fleet with new avionics and maritime air defence systems. Russia delivered the fleet of Tu-142s to India in 1988. Sources said the deal ran into rough weather when Russia, which had quoted too high a price to upgrade the fleet in 2003, was indecisive about a tripartite upgradation understanding with Israel.

With MiG Corporation’s huge debt jeopardising its $700 million contract to supply 16 MiG-29K ship-borne fighters to the Indian Navy as part of the Admiral Gorshkov aircraft carrier acquisition, the company’s head was ousted a few days ago.

Under the Gorshkov deal closed in January 2003, MiG Corporation is to supply 16 MiG-29K multi-role aircraft to the Indian Navy — the Indian team will be reviewing the progress of this deal. MiG’s $300 million debt makes the supply contract with India virtually impossible to service, according to reports. It is also understood that the new MiG chief has close relations with Sergei Chemezov, the head of Rososboronexport, Russia’s major arms exporting organisation — and that Chemezov may agree to fund the MiG-India contract in exchange for marketing rights of all MiG aircraft.

After delivering a fleet of MiG-29s to Malaysia in 1995, MiG’s finances dipped sharply until its new chief Nikolai Nikitin brought it back from the brink by getting deals worth $1 billion signed in 2001. Nikitin was ousted in 2003 under a cloud of controversy and replaced by Toryanin, a former top manager at Sukhoi Corporation, until he was fired earlier this week to be replaced by Fyodorov.